Second Session, 41st Parliament

(2017) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, October 26, 2017

Afternoon Sitting

Issue No. 45

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Introduction and First Reading of Bills

Bill 16 — Tenancy Statutes Amendment Act, 2017

Hon. S. Robinson

Orders of the Day

Committee of the Whole House

Bill 2 — Budget Measures Implementation Act, 2017

(continued)

S. Bond

Hon. C. James

T. Redies

A. Weaver

T. Wat

Report and Third Reading of Bills

Bill 2 — Budget Measures Implementation Act, 2017

Second Reading of Bills

Bill 11 — Provincial Court Amendment Act, 2017

Hon. D. Eby

J. Sturdy

S. Furstenau

Bill 6 — Electoral Reform Referendum 2018 Act (continued)

A. Weaver

M. Hunt

J. Thornthwaite

R. Kahlon

D. Barnett

I. Paton

M. Polak

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Jobs, Trade and Technology

(continued)

J. Thornthwaite

Hon. B. Ralston

R. Sultan

G. Kyllo

J. Johal

S. Bond

T. Wat

S. Thomson

THURSDAY, OCTOBER 26, 2017

The House met at 1:32 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introduction and

First Reading of Bills

BILL 16 — TENANCY STATUTES

AMENDMENT ACT,

Hon. S. Robinson presented a message from Her Honour the

Lieutenant-Governor: a bill intituled Tenancy Statutes Amendment Act,

Hon. S. Robinson: I move that the bill be introduced and read a first time

now.

I’m pleased to introduce Bill 16, which proposes amendments to the

Manufactured Home Park Tenancy Act and the Residential Tenancy

Act.

Our government made a commitment to tighten the rules that protect

good landlords and good tenants. These amendments provide greater

protections for tenants by closing a fixed-term-tenancy loophole that

has contributed to significant rent increases and housing instability.

Both landlords and tenants will benefit from amendments that improve the

ability of the residential tenancy branch to take stronger action to

enforce tenancy laws with repeat violators. Streamlining the dispute

resolution process for the return of security and pet deposits will mean

that tenants won’t have to wait months to get their deposits

back.

The amendments in this bill also fix minor issues of language and

interruption related to sublets, service of documents, notice of

proceedings and float home jurisdiction.

Mr. Speaker: The question is first reading of the bill.

Motion approved.

Hon. S. Robinson: I move that the bill be placed on the orders of the day for second

reading at the next sitting of the House after today.

Bill 16, Tenancy Statutes Amendment Act, 2017, introduced, read a

first time and ordered to be placed on orders of the day for second reading

at the next sitting of the House after today.

Orders of the Day

Hon. M. Farnworth: In this chamber, I call continued committee stage on Bill 2, Budget

Measures Implementation Act. In Committee A, I call continued estimates of the

Jobs, Trade and Technology Ministry. When they are finished, we will be calling

the Indigenous Relations and Reconciliation Ministry.

[1:35 p.m.]

Committee of the Whole House

BILL 2 — BUDGET MEASURES

IMPLEMENTATION ACT, 2017

(continued)

The House in Committee of the Whole (Section

B) on Bill 2; R. Chouhan

in the chair.

The committee met at 1:36 p.m.

section 12 (continued) .

S. Bond: We have a number of questions, obviously. As I mentioned earlier

in our discussion, this is the heart of the discussion around the carbon

tax increases. As I said to the minister before lunch, we’re not arguing

about the existence or perhaps even the necessity of a carbon tax. In

fact, we introduced it. We’re talking about the pace, the magnitude of

the increase and the reporting requirements, which we had a discussion

about.

Just before the break, the minister talked about the definition of

who would receive the Low Income Climate Action Tax Credit. I think the

answer was a family earning less than $50,000 — so $50,000 or less. Can

the minister confirm that that’s what I heard?

Hon. C. James: I want to make two distinctions. One is that everybody gets an

increase, because the carbon tax credit goes up based on the carbon tax.

So everybody will get that 17 percent increase. Remember we talked

yesterday about the credit going up to match the increase in the carbon

tax? Everyone will get the increased amount. It will go up. Then again,

like other programs that are income-tested, it will be phased

in.

I can make sure we get the chart for the member as well. It varies

depending on whether you’re single, whether you’re a couple, whether you

have two kids, whether you have three kids. At roughly $38,880, you get

the full amount, and then it starts to taper down. But that, as I said,

will vary depending on the mix of the family and the composition of the

family.

S. Bond: That is, then, a clarification. The issue is the definition of

low-income earners who would receive the additional Low Income Climate

Action Tax Credit. I think the minister has now said that it’s $39,000.

Could she confirm that?

[1:40 p.m.]

Hon. C. James: It’s $38,880. The member is quite right. It’s close to $39,000.

Then it tapers. So people will still receive the credit. They won’t get

the full credit.

S. Bond: Has the ministry done modelling on the impact, for example, on

middle-class British Columbians? Let’s take an example. A middle-class

family lives in a northern community, and I certainly understand that

there are going to be investments in green technology and a variety of

other things, including probably transit, etc.

Has modelling been done to look at what the impact would be on a

middle-income-earning family? We’ve now determined that low-income

earners, $38,000 plus, will receive some additional benefit. So what are

the changes, and what is the impact on a middle-class family, say,

living in a region that has heating costs, geography where you can’t hop

on a transit bus and you have to use a vehicle to drive to get back and

forth, cold weather, those kinds of things?

Has modelling been done to look at the issue? It’s particularly

important, I think, from the perspective of…. This is a government that

ran on an agenda of affordability. So I’d be interested in knowing what

kind of modelling has been done to demonstrate that there’s a

recognition that for some families there is going to be a significant

impact, depending upon their income bracket.

Hon. C. James: Just for the member, page 67 in the budget goes through some of

the examples. Again, you certainly can’t look at every family, because

it depends on the composition. It depends on the individual. But just to

give you a rough idea of some of the work that was done…. Raising the

carbon tax by $5 a tonne will increase the carbon tax paid by British

Columbians. If you take a look at a family of four, for example, making

$50,000, as their annual income, a $5 increase could result in an

additional $50 in carbon taxes.

S. Bond: Does that $50 contemplate regions of the province? I can’t imagine

that if you live in northern British Columbia…. The weather is much

colder than it is in urban B.C., and in fact, driving distances are

significant. How has regionality been considered in the

modelling?

Hon. C. James: I’ll just come back again, as we had the discussion earlier with

the member, to the fact that there are puts and takes when it comes to

the north and to urban areas. For example, as I mentioned earlier, there

is actually a higher use of fuel and a higher cost for fuel in the Lower

Mainland, because of idling, because of traffic, than there is in the

north.

When you look at heating costs, again, there have been comparisons

around insulation in houses in the north. That doesn’t take away from

the challenges of not having enough transit or not having the options,

but this is a provincial average based on family composition and based

on household use of taxing fuels for heating, for cooking and for

transportation.

S. Bond: Is vehicle usage calculated by a single vehicle assigned to a

home? Or is it based on how many vehicles are in a household?

Hon. C. James: Part of coming up with the average is that we look at all kinds of

families. We look at the number of people in the family. We look at the

number of vehicles they have. So we do calculations based on one

vehicle; based on two vehicles; based on more kilometres travelled;

based, again, on regional comparisons. Then we come up with this

average.

S. Bond: My colleague is going to ask some questions on the impacts on

industry.

[1:45 p.m.]

I just have one other question. It was posed recently by the Lower

Mainland Mayors Council that perhaps the transportation plan that they

have, which is aggressive and expensive, be funded out of carbon tax

revenue. Is that being contemplated by the minister?

Hon. C. James: We’re, of course, in the planning processes for the budget. That

question might have to go to the Minister of Transportation, but I know

the mayors are coming up with a plan later in the spring. So we haven’t

seen any ideas come forward yet.

T. Redies: The 66 percent increase in carbon taxes over the next few years is

going to have a significant impact on a number of industries. B.C.

Ferries, for example — the math is that it’s going to cost an extra

$10,000 a day for the larger ferries in 2018, and it will rise to as

high as $15,000 extra in carbon tax fuel by 2021, based on the numbers

that the government has provided us. That’s — just to do the math —

again, an extra $5.5 million, and $60 million extra a year for one

ferry.

The government campaigned on an election promise that it was going

it make the cost of using B.C. Ferries more affordable, cheaper. Can the

minister outline what analysis was done or perhaps a rationale behind

this increase in carbon tax? Does it not conflict with one of the

election promises of the government?

Hon. C. James: Again, we had some of this conversation in estimates, but I’m

happy to go back again to the response that I gave yesterday. The

purpose of the carbon tax is to provide opportunities for, yes, climate

action, but also a change in behaviour — a change in behaviour by

individuals, a change in supports by industries.

As we talked about yesterday, there will be support for industries

that are energy-intensive, trade-exposed to help them transition and to

support them in transition, just as there was for the cement industry

and for the greenhouse industry. Both of those industries, in the

previous government, were given support to be able to look at their

transitions, to change their behaviour. That expectation will

continue.

T. Redies: Does that mean, then, that B.C. Ferries will be one of those

industries that the government will work out a plan with? Because how

can B.C. Ferries continue to operate with more than $60 million extra a

year in costs without passing that on to their customers?

Hon. C. James: I think the question is specific to B.C. Ferries, but it applies,

in fact, to other industries. There will be ministries that may have

Crown corporations or other industries where they will want to have

those discussions, with the Minister of Environment and with cabinet.

Those discussions will come forward. I certainly know that with B.C.

Ferries there have been discussions around natural gas as an option to

be able to look at some of their savings. I expect those discussions

will continue with industry.

I think part of the reason that we’re looking at supporting the

pan-Canadian agreement — this is an agreement that all of the provinces

across this country will be reaching — is it gives that ability for

businesses to plan. There is certainty around the increases as they come

forward each year. That has been laid out in a plan and gives the

opportunity for those kinds of transitions to occur.

T. Redies: Well, that’s an interesting response. There’s certainty,

certainly, around the costs that are going to be attributed to business,

but there’s not, I guess, a lot of certainty in terms of how this is

going to impact their business operations and, if they pass on the costs

of their goods, the increased costs of goods to their

customers.

[1:50 p.m.]

Again, I ask the minister. When you’re looking at a broad carbon

tax across, whether it’s transportation…. We talked about the ferries

and the airline industry. We talked about the cruise ships. How can she

talk about her government making life more affordable when all these

industries are going to have to pass on the impact of this carbon tax to

their customers?

Hon. C. James: I think the member has made it clear how she feels about the

increase in the carbon tax. That’s very clear.

I think it’s important for us, as a province, to be a leader and

to continue to show that we are doing our part around climate action. I

think the public expects that of us all in this Legislature. Certainly,

in any discussions that I have, that is an expectation. I think there

are opportunities for not only businesses but individuals and industries

to look at how they can be leaders, which, in fact, could create growth

in our economy. We could, in British Columbia, be a leader when it comes

to industry, when it comes to mitigation, when it comes to support for

transition.

There are all kinds of opportunities in British Columbia to be

that leader. We’re ideally positioned. We’re ideally positioned in our

location and in our connection to our neighbours down south who are also

looking — California, Oregon, Washington — at other climate initiatives.

I think there are opportunities to not only show that we are a leader

but to also see growth in our economy as well.

T. Redies: I want to clarify to the minister. There was an implication that

I’m, perhaps, not supportive of the carbon tax. I actually am. However,

I’m supportive of the revenue neutrality as well. I know a 66 percent

increase on a tax to businesses is going to be very, very consequential.

I don’t think, when British Columbians were voting this year, they knew

that the government was planning to introduce a 66 percent increase in

carbon taxes without revenue neutrality.

Again, I’m really curious about the analysis that was done on this

in terms of the ongoing impact to businesses, to industries and to our

economy. We’re not really getting a lot of specific responses. So maybe

I’ll try another one. How about the agricultural industry? What analysis

was done in terms of how the carbon tax increases were going to impact

that industry?

Hon. C. James: Just a reminder that revenue neutrality was revenue neutrality to

government, not to taxpayers. I think that’s important to note. Carbon

tax revenue neutrality, from the previous government, did not mean

revenue neutrality to taxpayers at all. It meant revenue neutrality to

government.

We, in fact, had many, many conversations around climate action

and many, many conversations about getting rid of revenue neutrality.

That has been our position and was our position during the election

campaign and was embraced by British Columbians, who actually say that

if they’re going to pay the carbon tax, they want it used for green

initiatives.

They actually want their money to go towards climate action. They

want to see change occur in communities. They want to know that the

resources that they are contributing to are making a difference for this

generation and future generations. That’s exactly what British

Columbians are looking for — opportunities to be able to

contribute.

Getting rid of revenue neutrality and moving to providing support

to low-income taxpayers so that they aren’t impacted — and we address

the inequality issue that can occur with increases in the carbon tax —

and using the resources to be able to provide for green initiatives is

exactly the kind of approach that will move us ahead in climate

action.

T. Redies: Does the minister’s response mean there was no analysis done on

the impact to the agricultural industry?

Hon. C. James: On individual ministries, those ministries will take a look and

have discussions with industry — as they did when we talked about the

cement industry, as they did with the greenhouse industry — to look at

changes that need to occur.

[1:55 p.m.]

A member raised the issue earlier of the cruise ship industry and

some challenges there. Those are issues that come forward to the

individual ministries that have those programs and will bring them

forward during the budget process.

T. Redies: I think what you’re saying — and I’ve heard this from the minister

— is that they are going to be in consultation with industry after the

fact. Are you saying that there was absolutely no analysis done prior to

the decision to raise the carbon tax by 66 percent from now until

2020?

Hon. C. James: If we take a look at the pan-Canadian agreement, which was signed

on to by the previous government and supported by this side of the

Legislature before we became government, I think it is no surprise to

anyone that you were going to see an increase in the carbon tax. I think

that was expected and, in fact, signed on to by the former Premier, on

that side of the Legislature — to increase the carbon tax. I don’t think

it was any surprise to anyone.

Analysis always goes on and will continue to go on. We will work

with industries, as I said earlier, to look at supports that industries

need to get through any of the challenges that they face and help them,

through mitigation, to make the kind of changes that they need to make.

As I said earlier, I believe this will not only be doing the right thing

for climate action in our province; it will also actually spur on new

industry in British Columbia.

T. Redies: I think the difference between this government and the previous

government is that the previous government was actually going to take

some time to look at the increase to see how it was going to impact

business and industries going forward before they

implemented.

A. Weaver: The remarkable irony that is happening here in this House is truly

something to believe. It truly is something to believe, where I’m

standing here, listening to the B.C. Liberals stand up, the B.C.

Liberals arguing against the carbon price increase, when they were

so….

Interjections.

The Chair: Members. Members. The member for Oak Bay–Gordon Head has the

floor, please.

A. Weaver: Thank you, hon. Chair. I listened and held my tongue. I didn’t

heckle as the members opposite asked questions showing, in my view,

hypocrisy.

When they brought in their carbon pricing and they increased it at

$5 a tonne to $30, they argued that it was going to lead to an

incentivization of clean energy, clean industries — and it did. Our

economy outperformed the rest of Canada at exactly the time we

introduced the carbon price. Why it outperformed…. It was before the

reckless real estate speculation that was going on. It outperformed

because of expansion of innovation.

Now, I commend this government for bringing this carbon pricing

forward, in a manner that gives British Columbians certainty and gives

industry certainty. I will ask a question in just a second, but it’s

important, hon. Chair, that we stop this fearmongering.

The B.C. Liberals have no solution. The industry in British

Columbia has had uncertainty for years, since they stopped the increase

in the carbon price. B.C. industry was ready and waiting and willing to

adapt to the introduction of a cap-and-trade scheme for the heavy

industries. This government gave them uncertainty for many, many years

as nothing actually happened — the previous government.

My question to the Minister of Finance is this. How does the

$5-per-year increase compare with what is going to happen anyway

federally, and to what extent are we coming ahead or after what’s going

to happen anyway?

I will finally conclude by saying that to suggest that there was

no CGE modelling on the issues is, again, revisionist history. The

climate leadership team, which had access to economic models, suggested

a $10-a-tonne increase. This doesn’t even meet what they suggested

through their economic analyses.

Over to the minister.

[2:00 p.m.]

Hon. C. James: Thank you to the member for the question. In fact, this will put

British Columbia one year ahead of the pan-Canadian agreement. We

believe, again, that it provides an opportunity for B.C. to be a leader

and, just as the member has talked about, provide the opportunity to

spur on the industry.

I think we have a number of initiatives — in fact, some of them

are built into this budget, whether it’s the innovation commissioner,

whether it’s the new economy task force — to actually look at

opportunities for B.C. to be a leader when it comes to transition, to be

a leader when it comes to mitigation for industries, to in fact spur on

new industry in British Columbia.

We will, in fact, be one year ahead. Everyone else will catch up

in the following year. That is an agreement signed on to by, I believe,

all but one province across this country. I expect that will address

some of the concerns that have been raised about competitiveness when it

comes to province to province. There are still issues, obviously, with

our neighbours south of the border, but this will certainly address the

issue across Canada when it comes to competitiveness and ensure that our

industries are on a level footing.

S. Bond: While I appreciate the passion of the member for Oak Bay–Gordon

Head, let’s take a little look, a walk back down memory lane

here.

The interesting thing is…. When we have a conversation about being

leaders on the carbon tax, I would remind the members opposite that it

was this government that was the first jurisdiction to actually create a

carbon tax, and boy, that was not an easy thing to do.

The other thing to the member for Oak Bay–Gordon Head and the

minister — our job here is to ask questions on behalf of all British

Columbians. There is not unanimity, as the minister would have

suggested, about people wanting to see their carbon tax go to green

initiatives. There is significant concern in parts of this province,

where people have temperature issues, geography — all of those things.

We’re not arguing against the carbon tax. We are talking about a

reasonable implementation schedule.

It was this government who said to the federal government: “You

bet we’ll increase the carbon tax — when the rest of the country catches

up.” So to suggest, as the member for Oak Bay–Gordon Head did, that

there’s some hypocrisy, I would suggest we take a look at the record

here.

The irony of the comments today is the member knows full well what

she said when she was running as the leader of the B.C. NDP. She led the

axe-the-tax movement related to the carbon tax in British

Columbia.

The member for Oak Bay–Gordon Head might want to look a little

more generously around this chamber, because the person who led the

axe-the-tax movement is actually the Minister of Finance. In fact, at

that time, she said: “I understand the carbon tax is a symbol.” Well,

this government, the previous government, realized it was much more than

that.

As we move through these changes, what we’re trying to establish

here today is not about backing up the carbon tax. It’s about real

impacts.

We’ve talked about cruise ships. Why don’t we talk about airlines?

There is the ability to impact the consumer in British Columbia because

this list includes aviation fuel, gasoline, heavy fuel oil, jet fuel,

kerosene, light fuel oil — the list goes on. All we’re asking is a

reasonable question. What analysis has been done, based on the chart

that’s provided, with industry to ask what the impacts to consumers will

be?

Hon. C. James: Just a couple of comments. I think the member across has pointed

out exactly the reason that we are eliminating revenue neutrality to

government. We’re going to use the carbon tax revenue to provide those

alternatives for communities that will be impacted.

That’s exactly the rationale around making sure that you utilize

the resources: to provide support to those communities who will receive

greater impact with the carbon tax, in addition to providing low-income

families with a credit so that they will in fact see that they will not

be worse off with the carbon tax, and it addresses the issue of

inequality. I think the member has presented exactly the rationale

around getting rid of carbon neutrality and how important that

is.

The member mentioned flights. The member mentioned airlines. I’ll

just give a couple of pieces of analysis around the airlines. A flight

from Victoria to Vancouver, with a $5-a-tonne increase, would be an

additional seven cents for each passenger. Vancouver to Prince George

would be an additional 23 cents, and Vancouver to Fort Nelson would be

an additional 48 cents. So that’s just an example of the impact when it

comes to flights.

Sections 12 and 13 approved.

section 14.

[2:05 p.m.]

S. Bond: This

section sets out the tax rates for combustibles. Can the

minister walk through the impacts that the changes will have?

Hon. C. James: I’ll just give three examples in the table on combustibles. These

aren’t fuels, but these are combustibles.

Peat, for example. The rate of tax starting on April 1, 2018, is

$35.77 per tonne. The increase for April 1, 2019, will be $40.88 a tonne

and, in 2020, would be $45.99.

Tires. I’ll give you the example of tires. There are two

categories for tires, shredded and whole. Tires, on April 1, 2018, is

$83.69 per tonne. The rate of tax on April 1, 2019, will be $95.64 per

tonne, and the rate of tax in 2020 would be $107.60. Then tires whole,

just to give another example to the member, $72.80 on April 1, 2018,

$83.20 on April 1, 2019, and $93.60 in

Section 14 approved.

section 15.

S. Bond: I believe that

section 15 is likely identical to what our

government introduced in the February budget. Can the minister indicate

whether there have been any changes and also what the benefits of the

information-sharing agreement will provide?

Hon. C. James: The member is correct. This is just continuing on. There have been

no changes.

Again, if we look at the unaffordability in real estate and the

challenges in the real estate area in British Columbia, this is going to

improve the administration and the enforcement of the Income Tax Act.

It’ll help identify individuals who have not filed tax returns, despite

a requirement to do so. It will ensure that capital gains from property

transfers, for example, are accurately reported.

It’s really to look at making sure we can share information with

the federal government, which will ensure that people are paying the

taxes that they are due to pay.

S. Bond: With freedom of information comes the requirement to protect

privacy. Can the minister assure British Columbians that their

information will be protected, as per the act?

Hon. C. James: Yes.

T. Redies: The new tax bracket that is being introduced for individuals

earning above $150,000….

The Chair: Member, are you on

section 15 or 16?

T. Redies: Sorry. My bad.

Section 15 approved.

section 16.

T. Redies: With this particular section, I’d like to ask the minister if they

have done any analysis in terms of how this increase will affect B.C.,

relative to nearby provinces and other jurisdictions like Oregon and

Washington.

[2:10 p.m.]

Hon. C. James: Thanks to the member for the question. I’ll give a couple of

examples of analysis. Certainly with analysis related to other

provinces, that’s one of the first things, obviously, that’s looked at.

With this increase, we will have the third-lowest top rate for taxes, so

we continue to remain competitive. Saskatchewan is at 47.5, Alberta is

at 48, and B.C. is at 49.8 — so again, continuing to remain

competitive.

We have the recent experience with this tax bracket from the

previous government in ’14 and ’15. This tax bracket was in place for

two years. Again, we didn’t see a huge change in behaviour, a huge

change in revenue. Again, that’s taken into account when we take a look

at this tax bracket.

Comparing other jurisdictions, particularly international

jurisdictions or south of the border, is tough to do because of the

differences in taxes. For example, some of the states have very, very

high property taxes compared to British Columbia, so it’s very tough to

take a look and do a comparison that would be useful when it comes to

the other states. But certainly we’ve done the analysis around the

experience that B.C. had in ’14 and ’15, in those two years when in fact

this exact tax bracket was in place from the previous

government.

T. Redies: Did that analysis also take into consideration the impact on

high-technology jobs and financial services, which all tend to pay

relatively higher scales of pay? And did that analysis show any

impact?

Hon. C. James: I just want to emphasize a couple of pieces. I know we went

through this yesterday as well, but I think it’s important for those

couple of people who may be watching or listening. We are talking about

an increase in the amount of tax over $150,000 — not up to $150,000,

over $150,000. It’s that amount that gets taxed. This is individual tax,

not family tax. I think that’s important.

We’re talking about 2 to 3 percent of taxpayers in British

Columbia that are impacted — about 85,000 taxpayers. Compared to the

majority of taxpayers in British Columbia, we believe this is certainly

something that is manageable and provides support for programs and

services that everyone benefits from, including people who make over

$150,000.

T. Redies: Yes, we’re well aware on this side that it’s the amount over

$150,000 where the tax increase is happening.

I guess what I’m trying to understand is: did the ministry do any

analysis in terms of our ability to attract people from outside the

province, from the United States, with respect to the tech sector or

financial services sector? Again, oftentimes it’s very difficult to

recruit these people, particularly to Vancouver, where the cost of

housing, as we all know, is very high. So I’m just wondering if the

ministry did any analysis as to whether or not this might impact the

ability of financial services firms or high-tech firms to attract

workers.

[2:15 p.m.]

Hon. C. James: I’m sure the member has had the same kinds of conversations that

I’ve had and that I know other MLAs have had, across the province, where

we talk to investors, particularly in the area of tech or, as the member

mentioned, the financial area.

Certainly, in the discussion that I have, yes, taxes are one

consideration, along with a number of other considerations. B.C. has the

advantage because of our location, because of our proximity to not only,

as I mentioned earlier, the coast but down south we have the access to

quality talent, to education, to health care. Those are areas that are

also looked at. When business takes a look at investing in British

Columbia — and you can certainly see a number of studies that have come

out, pointing out what business looks at — taxes are one factor that is

taken into account, not the only factor.

T. Redies: Again, I appreciate that. The challenge is that we are facing lots

of uncertainty, headwinds and additional costs to individuals that might

detract them from coming to the province. It’s not probably what we

believe is the step in the right direction, but I’ll end my questions on

this

section now.

Section 16 approved.

section 17.

S. Bond: Can the minister tell us how many families benefited from the

child fitness credit, which is being repealed, other than…? Of course,

this

section allows a claim in the 2017 taxation year. How many families

benefited from this tax credit?

Hon. C. James: I think you’ll see this in the next few sections. We’ll just make

some kinds of general comments around the direction on these tax

credits, whether we’re talking about the children’s fitness credit, the

education credit or the fitness equipment credit.

A number of these were credits that were put in place by the

former Conservative government, the former Harper government, at the

federal level and matched at the provincial level. The new federal

government, the Trudeau Liberal federal government, is actually

repealing, and has repealed, most of these credits, recognizing that the

amount that was received by the credit is small. But more importantly,

these were credits that benefited those who were higher income than

lower income.

In most programs and services, particularly with something like a

children’s fitness support, you want to provide support to families who

may not be able to participate, who may not be able to afford it. If we

take a look at these tax credits, they’re all non-refundable, which

means if you didn’t make enough money to be taxed, you weren’t getting a

credit. You weren’t receiving the credit. It disproportionately impacted

higher-income families than lower-income families when it came to

getting the credit.

The member asked how many people had claimed this credit. So

218,730 claims came in, in 2015. That credit is worth $12.65. So when it

comes to credits, from our perspective, you are much better off

providing support for children’s sports groups, for education, so that

children can participate, than providing a credit worth

$12.65.

S. Bond: I appreciate the minister laying out clearly that this tax benefit

basically benefited middle-class families. The choice is to eliminate

that possibility and redirect tax credits. No one can argue with the

minister’s laying out of that program, but I think there also needs to

be a wide range of incentives. When we talk about the issue of

affordability — the very mandate that the minister and her government

ran on — affordability impacts middle-class families as well.

[2:20 p.m.]

In light of the fact that this is being cancelled — I think I

heard 218,000 applications — what is the government planning to do,

then? Are they looking at some other form of benefit, not just for

low-income British Columbians — obviously important — but looking at the

issue of child health and fitness, and looking at expanding that benefit

to include middle-class families?

Hon. C. James: In fact, the largest benefit to families in the budget is a 50

percent cut in the MSP premiums. To give a comparison for the member, if

a family claimed the back-to-school tax credit, the children’s fitness

tax credit and the fitness equipment and arts credit for one child, they

would receive $75.90 as a tax benefit. Families with children, in the 50

percent reduction in MSP premiums, will save up to $900.

When you take a look at the comparison and take a look at where

the resources are focused, we are focused on ensuring that families

receive the best and strongest benefit that they can. The MSP changes

will impact 400,000 families with children, and 900,000 families all

together.

S. Bond: I am aware of the MSP reductions because, in fact, it was our

government who announced we were going to do that. We didn’t announce we

were going to take out the child tax credits on top of that.

I think what’s important…. I think the question to the minister

is…. Obviously, we’re looking at reductions in other tax programs to

help fund the MSP reductions, and those are choices the government will

make. The question I asked was: is the government considering any other

type of incentives related to children’s health, wellness and

activity?

Hon. C. James: Well, I would, again, point the member back to the budget. I would

point back to the budget in a number of areas where there have been

changes that will positively impact families. I think that families will

utilize those resources, but MSP is certainly one example.

Income assistance, support for people with disabilities, increases

in those amounts — again, those are not always just individuals. Those

are individuals and families who are receiving the additional benefits,

so those are just two examples where there has been a focus.

I could talk about the tolls on the bridges and the difference

that that makes for families and the amount of money that those families

are saving when it comes to their budgets. I think there are a number of

initiatives that I’m very proud of that are in this budget that will

provide families with the support.

When we take a look at these fitness credits, and when we take a

look at other provinces…. Let’s remember that when it comes to repealing

these credits that were put in place by the Harper Conservatives, you

have seen Ontario, Saskatchewan and Nova Scotia all repeal these

credits. You have seen Alberta, New Brunswick, P.E.I. and Newfoundland

with no credits.

I think there are governments across this country — the majority

of governments across the country — that have recognized that the

support to be put in place for families is important and have looked at

ways to maximize that, which is what we’ve done in this budget as

well.

A. Weaver: I had a question with respect to budgeting using this tax credit.

This will also apply to the other tax credit systems. My question first

is: does government need to budget, in the actual fiscal budget, as if

every eligible child in this province will claim that tax benefit, or

not?

Hon. C. James: Good question, Member. The total amount of those who would be

eligible is not built into the budget. We do it based on past experience

of tax credits and families and how many people would utilize

it.

A. Weaver: What I was getting at, in terms of a question, is that in the

budgeting process, when a child fitness credit is there, one has to

assume a certain amount of people will claim it.

[2:25 p.m.]

Through undersubscription of this tax credit — because, honestly,

a lot of people don’t know it exists — does the budget end up with

surplus after surplus, year after year, with respect to the

implementation of these tax credits, which then leads to artificial

surpluses at the end of the year?

Hon. C. James: No, it doesn’t end up with a surplus, because we take into account

underutilization. That’s the practice for most of the tax credits. They

are underutilized, as I mentioned earlier, particularly for low-income

families, who either don’t get the information or don’t have an income

so therefore aren’t able to utilize these tax credits.

Sections 17 to 19 inclusive approved.

section 20.

T. Redies: I appreciate the insight with respect to the mechanics on the

reduction of these various credits.

My learned colleague from Oak Bay–Gordon Head and I have, with

other members of the Finance Committee, travelled around the province.

Actually, a common theme that has come up is about the importance of

arts in communities. With this particular credit now going out the door,

does the government have any other plans to encourage arts, and a love

of arts by children, in their plans coming forward?

Hon. C. James: Thank you very much to the member for the question. I certainly

agree around the importance of arts in our communities and for our

economy. It’s not simply a good thing to do and a wonderful thing for

everyone in communities but, in fact, a smart economic investment as

well.

The Minister of Tourism, Arts and Culture certainly has support

for arts in her mandate. I expect you’ll see, as we go through the

budget process, that some of those requests will come

forward.

Section 20 approved.

section 21.

S. Bond: The B.C. back-to-school tax credit was a non-refundable tax credit

of $250 per child. Can the minister explain the rationale for the steps

that she’s taken in

section 21?

Hon. C. James: Again, similar rationales, as I mentioned, on all these tax

credits. This was worth $12.65 per child. It was non-refundable, so

again, low-income families did not benefit from this tax credit, because

you have to have an income to be able to pay, to be able to get a

non-refundable tax credit. From our perspective, providing more money

for a public education system, investing in education, is an investment

that will support families and will support children. We believe that’s

a smart investment to make.

Sections 21 and 22 approved.

section 23.

S. Bond: Can the minister confirm that this is the exact same tax credit

that was announced by our government in February?

Hon. C. James: Yes, I can confirm that. In fact, on budget day, I recognized the

previous government for bringing this forward — this being one of those

rare times that there was wide support across the Legislature,

regardless of politics, to support this credit.

S. Bond: I know that when this was announced, there were some questions

about eligibility. In fact, I had one in my own community. It involved

search and rescue versus…. We should mention the name of the tax credit,

because it is important, and our government thought it was. I’m relieved

that the minister has chosen to keep this.

It is the volunteer firefighters or search and rescue volunteers

tax credit. We’re very grateful for those people. Many of us live in

communities where volunteer fire departments are the only hope that our

communities have during difficult circumstances, and of course, search

and rescue — unbelievable organizations right across the

province.

Can the minister assure me that the criteria, the issues around

eligibility, have been sorted out and that there is a broad-based

program? Has this information been communicated to those firefighters

and search and rescue volunteers?

[2:30 p.m.]

Hon. C. James: I think the member probably knows this if she’s had an individual

or individuals come forward. The taxpayer has to be eligible for the

federal volunteer firefighter tax credit or search and rescue volunteer

tax credit. That’s where there have been some gaps. We need to designate

the group to be able to be recognized as a designated search and rescue

or a designated volunteer firefighter to be able to be eligible. We’ve

had a group come forward. We’ll continue to look at that, if there are

gaps. We’re happy to do that.

Then just one clarification. One change that has been addressed in

this credit compared to February is that the person must be a resident

of British Columbia. That wasn’t clarified, so we ensured it’s clarified

in this bill.

Sections 23 to 34 inclusive approved.

section 35.

T. Redies: Can the minister explain why the decrease to 15 percent was chosen

and perhaps give us some insight as to whether or not this relates to

the reduction of the small business corporate income tax rate in any

way?

[L. Reid in the chair.]

Hon. C. James: The member is correct. When there’s a change in the corporate tax

rate, we always make a change, an adjustment, to the calculation of the

dividend tax credit as well.

Section 35 approved.

section 36.

T. Redies: A similar question. Can the minister explain why the increase

specifically to 43-11/19 percent was chosen and give some insight as to

how this relates to the increase in the general corporate income

tax?

Hon. C. James: As the member knows…. Correct, similar to the previous one, this

is related to the increase in the corporate tax rate. We make the

changes in the dividend tax credit to reflect that as well.

Sections 36 to 47 inclusive approved.

section 48.

T. Redies: This

section deals with the corporate income tax increase from 11

to 12 percent. I’d like to hear from the minister what analysis was done

to determine the impact of this tax increase in terms of B.C.’s

competitiveness relative to other provinces and nearby U.S.

jurisdictions.

[2:35 p.m.]

Hon. C. James: As we did with others, as we looked at any of the changes in the

budget, we looked at, as I mentioned before, maintaining our

competitiveness, ensuring that was there. We felt the 1 percent increase

— which continues to keep us in line with Alberta, Saskatchewan,

Manitoba, with the western provinces — continues to keep us competitive

in that regard.

We’re much lower than the U.S., when it comes to corporate tax

rates, and much lower than international rates as well. From our

perspective, a 1 percent increase to provide for programs and services

which, in fact, benefit corporations….

The investors that I talk to in British Columbia certainly talk

about how important it is to invest in housing, for example, or how

important it is to invest in education. So the rule of people

contributing to programs and services that everyone benefits from…. We

felt a 1 percent increase was keeping us within our competitive range,

ensuring that this is a province that people still want to invest in,

while investing in supports and services that make a difference for

people in British Columbia, including corporations.

T. Redies: You mentioned the United States. I’m sure you know that the

current administration is looking at some very significant tax cuts. My

question: is the minister not at all concerned about the potential

reduction in the competitiveness of B.C. if these tax changes go

through?

Hon. C. James: I think, certainly, people that I talk to, businesses that I talk

to, talk about stability being critical when they look for places to

invest. There are very few people right now who would look down south of

the border and call anything stable. There’s a great deal of concern

around the political environment, around the changes around NAFTA and

softwood, etc. When you look at stability and look at predictability and

look at a government that continues to look at competitiveness and look

at the advantages in British Columbia, I am confident that businesses

will continue to look favourably on British Columbia.

T. Redies: That’s good to know. I would say…. The minister referenced NAFTA

and softwood lumber. Those are creating great degrees of uncertainty

here, as is the cancellation of infrastructure projects or projects that

are currently at risk, based on what this government is doing. I think

there is a tremendous amount of uncertainty here, as well.

I think we obviously need to keep an eye on what is happening in

other jurisdictions to ensure that B.C. does remain competitive. I’m not

sure if the minister is aware that the Premier of Saskatchewan recently

announced that they won’t be reducing their corporate tax rate because

they don’t need to now because B.C. has raised theirs.

Sections 48 and 49 approved.

section 50.

T. Redies: This particular

section is near and dear to my heart, based on my

previous life. But I would also like to hear from the minister as to

what the minister believes will be the expected benefit or outcome of

this change.

Hon. C. James: I was really pleased to be able to include this in the budget. I

think credit unions have done an extraordinary job in British Columbia,

but they’ve also done an extraordinary job in talking about what a

positive impact a change in this way could have for communities in

British Columbia, particularly rural communities.

It’s important to note that in rural communities, small

communities, often the credit union is the only financial institution in

those communities, and in other communities, often the credit unions are

the only ones which will take a look at small businesses.

[2:40 p.m.]

Because of, again, economy of scale, many of the big banks want

big customers. For small businesses, the ability to be able to go to a

credit union, to be able to receive the loan that they need, to be able

to perhaps expand a business, open a business…. Often the credit unions

are the ones who are there for them.

I think the other important point to note is that increasing

lending in communities by credit unions increases economic activity in

communities. Those dollars are not taken overseas. Those dollars are

spent in local communities and local investments. This is a smart

decision for communities. It’s a smart decision for credit unions. It’s

a smart decision for the economy, particularly for small

communities.

Section 50 approved.

section 51.

S. Bond: We have here a consequential to the amendment made in the bill. It

strikes out “before 2017” and substitutes “before 2018.” It also talks

about the definition of an “excluded expense.” Can the minister just

walk through what the changes mean for the B.C. flow-through mining

tax?

Hon. C. James: This, basically, prevents double-dipping when it comes to the tax.

We have a provision that states that the mining flow-through tax

credit…. You want to prevent taxpayers from claiming a mining

exploration tax credit in respect to expenses that they are eligible for

in the mining flow-through share tax credit. So it’s to prevent people

from being able to claim both, basically.

Section 51 approved.

section 52.

S. Bond: Can the minister just provide a brief explanation about the

benefit to the mining industry? This is related to exploration. Could

the minister just explain the benefits as a result of this

amendment?

Hon. C. James: This amendment will parallel the federal government changes that

now provide for environmental consultation. It will allow those expenses

incurred for environmental studies and for community consultations

undertaken. When companies are looking at a licence or a privilege

during the exploration stage, this will ensure that those expenses are

not excluded. They will in fact be included, as the federal government

does, through this amendment.

S. Bond: Perhaps just a comment from the minister on the retroactive nature

of the amendment.

Hon. C. James: Good question. It goes back to the federal changes, so this will

go back to March 1, 2015.

Sections 52 and 53 approved.

section 54.

T. Redies: Could the minister explain the change that is occurring here, with

respect to what information is actually going to be provided to the

Commissioner of Income Tax?

[2:45 p.m.]

Hon. C. James: This again, as we talked about earlier, relates to

information-sharing, particularly in the area of housing and real

estate. That’s really where the big concerns are being raised, so this

will facilitate information with Revenue federally. B.C. Assessment

data, for example, will be information that is shared — property values.

Information that is gathered now will now be shared with the federal

government so they can look at how they identify individuals who haven’t

filed a tax return despite their requirements. So closing those

loopholes and assuring that people pay the tax that they

should.

Sections 54 and 55 approved.

section 56.

S. Bond: I want to just ask the minister to perhaps explain. Earlier in the

discussion, the minister talked about having certainty as an important

thing. In March, the previous government actually announced and extended

this program for two years. I’m wondering why only a single-year

extension has been included in this update.

Hon. C. James: The one-year extension was given so that we could sit down and

review the tax credit, work with book publishers and make sure that the

credit they were receiving was helping them and encouraging publishing

and booksellers in British Columbia. So it’s to give time for the new

government to be able do that consultation.

Section 56 approved.

section 57.

T. Redies: Can the minister provide information as to how many individuals

and, specifically, apprentices benefit from this credit?

Hon. C. James: Approximately — this is for the 2016 tax year — 4,210 apprentices,

individuals, put in claims, and approximately 1,020

employers.

T. Redies: Can the minister also explain why this credit was only extended

for one year as well, not through to 2020?

Hon. C. James: One of the priorities we have is to look at opportunities to

expand trades and apprenticeships. We’ve extended for one year so that

can be part of that full review and to make sure it was a comprehensive

conversation.

Sections 57 and 58 approved.

section 59.

T. Redies: Can the minister provide any examples as to what corporations the

expanded eligibility will apply to with this new section?

[2:50 p.m.]

Hon. C. James: Both of these are relieving measures or enabling measures. You may

have a company that may have more than one line of business, for

example. It may have interactive digital media as one part of their

business and another part of the business not related. Previously, they

had to have, basically, 100 percent of their business to be able to

access this credit. This will provide an opportunity for them to be able

to access the credit for the portion of their business that they’re

taking a look at.

Also, the second part of this

section amends the bill to remove

the restriction that prevented corporations that were registered under

the Small Business Venture Capital Act from claiming the credit.

Basically, both of these are enabling provisions to allow businesses to

be able to access the credit they previously couldn’t.

T. Redies: Just a follow-up question. What is the anticipated economic

benefit of this expanded eligibility?

Hon. C. James: It’s important to note that when the change comes in, I think

we’ll be able to track the change and the impact. I think the reason

we’re making the change is because there were concerns that had been

brought forward about companies that were looking at expanding in parts

of their business or looking at expanding in the digital media area.

This is a business, as I’m sure the member knows, that changes very

quickly. We’ve got to make sure that the tax changes keep up with the

changes in the industry. This, hopefully, will provide opportunities for

expansion.

Section 59 approved.

section 60.

S. Bond: I know the minister is not going to be surprised that I’m going to

take a few minutes to talk about this. I think that, certainly, the

minister has likely, as has the leader of the Green Party, received a

significant amount of correspondence about this decision.

Just so that we’re all on the same page,

section 60 begins a

number of sections that talk about discontinuing the international

business activity program. Maybe just a quick reminder here that the

program was established by the province in the late 1980s to encourage

the growth of the international financial sector through the provision

of rebates of provincial corporate income taxes for eligible

international financial activities.

As we look at the program over the years, we certainly have seen….

While there may be a debate today about whether or not it’s had an

impact, certainly there is a view, and a strongly held one, that there

has been a significant positive impact as a result of this program. I

think the thing that I find most interesting about this decision is the

fact that, in essence, when you look at the fiscal implications for the

province, the net revenue implications for the province of continuing

with the program are basically assessed as likely to be positive. In

other words, even at the low end of the incrementality range, the

province collects more money in taxes than it issues in tax

rebates.

We’re getting rid of a program that actually has the potential to

continue to attract international investors and companies. We’re getting

rid of it, despite the fact that there are very likely and highly

unlikely revenue implications for the province. Can the minister explain

the rationale for the cancellation of the international business

activity program?

Hon. C. James: Yes, we did have a good conversation, and yes, I expected this

issue certainly would arise. I think I’ll just run through a few pieces

that the member mentioned and a few pieces to again talk about why this

program is being proposed to be eliminated in this bill.

I think it’s important to note that the program has been analyzed.

It was thoroughly analyzed in 2010, in a report that was done and

provided to the previous government. That report was based on actual

taxpayer data. I think it’s important to note that the Advantage B.C.

report that came out is based on interviews with the individuals who

were receiving the tax credit. That’s very different than a report that

is based on actual taxpayer data.

[2:55 p.m.]

What that report in 2010 clearly showed is that the subsidy wasn’t

delivering the promised jobs or the economic activity. In fact, a large

portion of the businesses were already in British Columbia, already

doing business in British Columbia, and benefited.

I do think it’s interesting that that report that the member had

access to, that the other side had access to in 2010 — that we received

as well — clearly pointed out that there was not a link. Yet the

government continued to move ahead with the program and, in fact,

expanded the program without the facts to show that there was a link

between the work that was being done.

I think it’s important to always take a look at programs and

services across government, to take a look at taxpayer supports to

businesses. We want to encourage investment in British Columbia. That’s

an important piece of our budget. That’s why we’re doing things like

lowering the small business tax rate. That’s why we’re getting rid of

PST on electricity and continue to look at how we encourage investment

in British Columbia.

I do believe that if a tax measure is being used, we need to be

able to do the due diligence and the rigour that a tax measure deserves.

It certainly seems clear from the report, which the member would have

seen or other members would have seen in 2010, that there was not a

clear link between the work that was being done, the tax break that was

being given and jobs being created. As I said, most of those jobs and

existing activities were already being done in British Columbia, so from

our perspective, this was not a good use of dollars. That’s why we

proposed that the program be eliminated.

S. Bond: I think the debate here today is less about the merits of the

program, because we really can’t have an informed debate about that. The

last time…. The minister is completely within her scope to correct me if

there has been a thorough analysis. Yesterday in estimates, the minister

talked about: “Well, it’s reviewed annually.”

Yet today we talk about…. The most recent thorough analysis of

this program was in 2010. Did the minister ask for a thorough analysis

to be done before deciding to axe the program?

Hon. C. James: I’ll reiterate. As I said yesterday, the 2010 report was a

thorough report that developed a model, an economic model that was then

used each year to take a look at the program and to take a look at the

impact of the program. Was that information that I considered when I

made the decision and our cabinet made the decision around the program?

Yes, it was.

I think the other important factor to take a look at is that when

the program started — and the member mentioned when the program began —

the corporate tax rate at that point was 51.37 percent. We are now

looking at a combined federal-provincial tax rate as of January 1 of 27

percent. So you are looking at a very different environment than when

the program first began.

As I said to the member yesterday, who came in to express worries

about the loss of the program and the impact that that would have on

existing businesses, we are always — and I, personally, am always — open

to ideas and approaches to increase activity in British Columbia, to

increase investment in British Columbia. Whether it’s in the financial

sector or in other sectors, I am more than happy to receive any ideas

and approaches that the members feel would be successful.

I think that’s part of what we should be doing in this Legislature

— having those discussions. It’s part of why I believe so strongly,

having sat as a member in opposition on the Finance and Government

Services Select Standing Committee, because I think getting good ideas

from all kinds of places is what we should be doing in democracy. Good

ideas are not limited to one side or another or to one political party

or another. Good ideas come from everywhere.

I would certainly encourage the members. If the member, as she

says, really wants to look at strengths that might have been there, or

strengths to look at, I’m more than happy to take a look at those

programs and services that the member feels may be worth taking a look

at.

S. Bond: I appreciate the fact the minister has just noted that it’s always

important to look at programs. I think this is one of the programs that

the minister decided to axe pretty quickly. Virtually every other

program, every other initiative, every other promise this government has

made is going to some long consultation process. Yet for this one, it

was decided: “Let’s just get rid of it.”

[3:00 p.m.]

Now, granted a model was created in 2010, but certainly, from the

information that we have and the briefings that we had, the last

thorough analysis, complete thorough analysis, of this program was in

2010 — yet let’s get rid of it.

Let’s talk a little bit about what kind of gains this program has

delivered. It actually grew B.C.’s international financial and business

sectors. It helped diversify the economy of British Columbia, and, in

fact, it built B.C.’s reputation for international business. So to

suggest that there hasn’t been impact would simply be

inaccurate.

The minister said she’s open to ideas, and I’m really glad to hear

that, because I’m going to present her with one momentarily here. But

before I do that, I want to just ask the member about the process that

was used to determine that this program should disappear.

I find it ironic that on October 4, 2017, the New Democrat caucus

issued a press release about this program. They didn’t talk about the

merits of a policy-based decision. Let’s look at what it said:

“…undeterred by the lack of evidence and is working hard to save the

B.C. Liberal giveaway scheme.”

Minister, let’s take a look at the real rationale here. That press

release was sent out. There are a number of quotes in it. It says that:

“Following advice from ministry experts that the program doesn’t do what

it intended, the current Finance Minister has proposed ending the failed

scheme.” So Minister, is this a decision based on policy or

politics?

With that in mind, I would like to propose an amendment to

section

SECTION 60, By deleting the text shown as

struck out and adding the underlined text as shown:

Section 8 of the International Business Activity Act, S.B.C.

2004, c. 49, is amended by adding the following

subsection s :

(3) Subject to subsection (8), this Act does not apply to a

corporation or an individual for taxation years beginning after

September 11, 2017

September 17, 2018.

(4) In this

section the

“Emerging Economy Task Force” means a task

force to be appointed by government that is to include but is not

limited to business and industry representatives.

(5) The Emerging Economy Task Force must conduct a review to

determine if the International Business Activity Program provided

for in this Act should be modified, retained or eliminated for

taxation years beginning after September 17, 2018.

(6) Within 6 months of being appointed, the Emerging Economy Task

Force must submit a report to the Minister of Finance respecting the

results of the review under subsection (5).

(7) The report under subsection (6) must be made public by September

10, 2018.

(8) Subsection (3) does not come into force unless the Emerging

Economy Task Force has recommended in its report to the Minister of

Finance under subsection (6) that the International Business

Activity Program should be eliminated for taxation years beginning

after September 17, 2018.]

I have copies of it that I’d be happy to provide to the Clerk,

obviously, and I have copies — I’m sure — for the leader of the Green

Party and the minister.

On the amendment.

S. Bond: I just want to speak to the amendment while the minister takes a

couple of minutes to read it. It’s really not a complicated amendment.

It has a number of sections to it, but in a nutshell, here’s what it

says: that the date for the end of the program, if there is going to be

one, be extended a year.

The whole point of making amendments is…. They’re called

reasonable amendments. I think that, considering the history of this

program, which has gone through successive governments, this is not a

“B.C. Liberal giveaway scheme.” This is a program started in the 1980s,

followed by successive governments.

The recommendation in the amendment is to simply ask…. The

government intends to create an emerging economy task force. I think

that it’s completely responsible and reasonable to ask that the emerging

economy task force take a look at this program and make a recommendation

to the minister. Her very own task force can make that recommendation

after having a really good look at this in the context of emerging

economies.

One of the benefits of this program has been to do with clean

energy, green technology — all of those kinds of things. So all this

asks is that we’d like the emerging economy task force to take a look at

this, to bring a recommendation back to the minister, and to present

that in public so that, in fact, there can be a really transparent look

at whether or not this program should remain in existence — rather than

simply making it one of the first difficult decisions that has been

made, to axe the program without a thorough and thoughtful

review.

Those are my comments to the amendment, and I know that several of

my colleagues want to speak to it as well.

T. Wat: I rise in support of the reasonable amendment proposed by the

member for Prince George–Valemount to Bill 2, to postpone the decision

to eliminate the IBA program until the emerging economy task force can

take a very detailed look at this program.

First of all, I’d like to say thank you to the Minister of Finance

for saying that you’re open to ideas, that if members from the

opposition or any members from this Legislature have any ideas of how to

grow the economy, you are more than willing to look at our ideas. And

here it is. We have excellent ideas coming from my colleague, the member

for Prince George–Valemount.

[3:05 p.m.]

We are not going to disagree with the Minister of Finance to

eliminate a program immediately. But having said that, I still cannot

understand, as my colleague already mentioned, that since the NDP

government was in power, on every single policy initiative, the

government will go through review after review or one public

consultation after one public consultation. This particular one, the

international business activity program, is a ratified

decision.

As the minister said, the last thorough review was done in 2010.

It was seven years ago. Even though the Minister of Finance every year

does a review, as part of the budget review, that’s not a thorough

review. Whatever information you got seven years ago I don’t think is

applicable today.

I want to iterate once again that this program is designed to

attract — and, in some cases, to retain — international business

activity that would have otherwise not been located in British Columbia.

We, as a province, benefit from international commerce, and we cannot

attract international companies if they don’t have ready access to

international financial services.

Financial services have really become a very important job

generator in B.C., and international commerce is a huge part of the

economy. I’d just like to remind the minister of the original intent of

this program, as the then Finance Minister, Mel Couvelier, said in 1987:

“It’s to develop an international financial centre in Vancouver.” He

said: “We can be Canada’s and North America’s financial gateway in the

Pacific Rim….”

It is worth noting that in the late ’80s, Vancouver did not rank

anywhere as an international financial centre. But in 2008, an

organization in the U.K. started a ranking of global financial centres,

and by then, Vancouver was ranked No. 33 — from not even appearing on

the list to ranked 33 — and today we have climbed to 17. From a lot of

the business community and a lot of financial experts, they all come to

the conclusion that this is largely a result of our IBA

program.

I know that the minister has pointed out another report, prepared

by MMK Consulting in July. You think that because they interviewed all

of the participants of this program, that’s why you don’t think it’s

independent. I beg to disagree, because it’s exactly those participating

companies involved in the program that will know what kinds of benefits

the program brings to them. Without the program, we understand that many

of them will be relocated to other places. They won’t stay in British

Columbia.

I would also like to once again put on record that IBA-eligible

activities are estimated as representing close to $2 billion in direct

economic output in B.C. in 2015 and direct employment of 7,800. It

certainly does not make sense to eliminate this program without a

comprehensive and thorough review, given such a significant economic

benefit.

The minister yesterday said that when the program was started, the

corporate tax rate was much higher in British Columbia. Then we have

seen a drop in the corporate tax rate, which the minister said certainly

assists corporations when they are taking a look at investing in B.C.

This is certainly true, Minister, but this is only true before this NDP

government amended the Income Tax Act to increase the general

corporation income tax rate from 11 percent to 12 percent in your 2017

budget update. B.C. is going from having the lowest corporate income tax

rate across the provinces to being tied with Alberta, Saskatchewan and

Manitoba for the fourth-highest corporate income tax rate.

So here we are. This NDP government is sending a chilling message

to investors that it’s going to be more expensive to do business in

British Columbia. If the minister is going ahead with the elimination of

this program, without a thorough and comprehensive review of the value

of the program, this is yet another troubling message to investors that

B.C. does not welcome investment.

I was going to comment on the minister’s remark yesterday that the

top-five biggest recipients of the IBA program were actually already

located in British Columbia prior to the program expanding and receiving

those additional breaks in 2005.

[3:10 p.m.]

It is worth noting that the world is now a global village.

Business people can easily move their business from one place to another

if they have found that a government does not provide a favourable

business environment. It is exactly because of B.C.’s lowest corporation

tax in Canada and the attractiveness of the IBA program that many

businesses have decided to stay behind. Once these are gone, these

businesses, even though they may have been around in B.C. for a number

of years, I’m afraid, can easily move out of province.

Having said all that, I’m still encouraged to hear the minister’s

comments, both yesterday and today, that the minister is willing to look

at all kinds of suggestions. I am speaking in support of the amendment

and urge the minister to do so in order to ensure that B.C. will

continue to be an attractive place for investment and

business.

T. Redies: I’m also pleased to rise to support this amendment to Bill 2, as

put forward by my colleague the member for Prince George–Valemount. My

colleague from Richmond North Centre very eloquently explained that this

program actually has contributed a significant amount to B.C.’s economy:

over $1 billion in direct GDP growth and $1 billion in direct employment

with 7,800 jobs. That’s not inconsequential.

We’re troubled that — based on an outdated review done in 2010,

seven years ago — the minister would consider axing this program, a

decision that…. Frankly, we’ve had many businesses contact us, very

concerned about it. These include technology companies and financial

services companies, but it also includes firms from the

Interior.

I mentioned that I had been going around the province with the

Finance Committee. We had the pleasure of having Tolko present to us in

Williams Lake. I’m sure the minister is aware that Tolko is a major

producer in the forestry industry. They asked us to reconsider the

decision to eliminate the international business activity program. I’d

like to quote from their submission.

“Tolko supports the international business activity program as it

offers businesses some risk management when exporting B.C. products. The

forest industry survived a severe and prolonged economic downturn due to

the U.S. housing crisis. The industry responded by adapting to change

and increasing our exposure to new markets in Asia and abroad.

“In the absence of this response, the international business

activity program, B.C. sawmills would have closed. Cancellation of this

program will mean a less favourable business climate for international

activities, resulting in the export of fewer B.C. products.”

This is the forestry industry, which is already under a

lot of duress and experiencing a lot of uncertainty. They have asked us,

numerous companies have asked, to ask the government to reconsider this

decision.

As I said, we’ve received many letters from businesses, and in the

absence of any real, thorough review, especially for a government that

does tend to send everything else out for review, we are asking you to

reconsider this decision and support the amendment.

A. Weaver: I thank the member for Prince George–Valemount for putting forward

the amendment. I also wish to thank her sincerely for providing me with

information, including a copy of the MMK Consulting report Building

B.C.’s Brand

and Assessment of the International Business Activity

Program .

I have sought two briefings on this particular

section of the bill

out of concern, as expressed by the member for Prince George–Valemount

and others on the opposition side, with respect to: what are the

unforeseen or unintended consequences of perhaps cutting this

program?

I will say also that I do commend the present CEO of the program,

who has clearly taken steps since a previous review to get it on its

right track. But if we come, in speaking to the amendment, back to the

history of this program, the international business activity program was

actually brought forth in 1988 at a time when the corporate tax rate —

combined province and federally here in British Columbia — was over 50

percent.

[3:15 p.m.]

At the time, the rationale for bringing it in was that in British

Columbia we were not competitive with other jurisdictions in terms of

the corporate tax rate. Now, as of January 2018, the corporate

Canada-plus-B.C. tax rate will be 23 percent. The corporate tax rate has

come down 23 percent since the introduction of this program.

If we look, very recently, in terms of what this program is being

used at, I have, in the briefings that I’ve sought to get to the full

details here…. I understand that, in terms of what’s using it, factoring

contributes about 29 percent; dealing in securities, about 28 percent;

foreign exchange, about 33 percent; and other issues, such as with the

film industry, etc., 10 percent of the usage.

Now, the issue of factoring is an interesting one. What it allows

to occur, for example, is British Columbia…. It’s done in a

non-arm’s-length fashion. You can set up, in a non-arm’s-length fashion,

businesses in other jurisdictions. For example, if I’m a business, I can

trade amongst myself by setting up a corporation in America, say, and

have a company in Canada. I can go back and forth between myself and

take advantage of the tax credits in this program, when really all I’m

doing is taking advantage of something that is finding a means and ways

of taking advantage of a specific tax break.

Where it gets particularly egregious…. This is a 33 percent that

comes in with foreign exchange. I’d like to give a specific example.

Let’s suppose that I would like to loan you $100 million U.S., and in

order of doing that, I’m going to not loan you but find you $100 million

U.S. as capital, so you’re going to get access to it. There may be, say,

a 5 percent or a 3 percent commission attached with that. Well, now, if

I’m registered in this, I can go and get the B.C. taxpayer to give me a

12 percent tax credit on that 3 percent commission.

The problem here is that that’s just not right. Why should the

B.C. taxpayer…? This is 33 percent of the business model within this

international business activity program. One-third of all the activity

involves foreign exchange. Any service fee associated with getting money

from somewhere…. And it just has to be the money. It doesn’t have to

come from another jurisdiction. If it’s another foreign currency, it’s

eligible for the money. One-third of the business model, and you get a

12 percent tax credit. The B.C. taxpayer is subsidizing those who don’t

need a subsidy just for the commission. It’s just wrong. I can’t see any

justification for that.

I’ve looked at this in detail. I understand that this report is a

thoughtful report by MMK Consulting. Unfortunately, it only relied upon

interviews, and pre-audited fees were looked at. That is the information

that was used. That’s my understanding. The claim of 7,800 jobs that was

embedded in this report is actually based on a large number of

assumptions that I think could be challenged by the civil service and

government if the actual income tax reporting data were

available.

I’m not saying that this isn’t a thorough report, but I’m saying

the analysis in this report did not have the actual data, the income tax

data, that would allow it to make exact or precise assessments of jobs

and income.

I took this very seriously. I took the suggestion of the member

for Prince George–Valemount very, very seriously. It was not until the

second extensive briefing from the civil service…. I’m very grateful to

the minister and the staff of the civil service who have provided me

with this briefing. It is only after extensive briefing that I must say

now that I support the rationale here in recognition of the good work

done by the present CEO, and I cannot support this amendment.

Hon. C. James: Thank you to the members who have made the comments, and thank you

to the member for bringing forward an amendment. I think it’s exactly,

as the previous member said, the kind of process that we want to

encourage — an opportunity to have a thorough discussion on this issue

and on other issues that come forward in the Legislature.

But I want to start again with the foundation of this tax credit

and the basis of the tax credit at a very different time in British

Columbia, a very different time when it comes to tax rates.

[3:20 p.m.]

As has been mentioned, over 51 percent tax rate on corporations.

We’re at a very different place now, at 27 percent. That’s with the 1

percent increase that will occur on January 1. We’re in a very different

situation. And while I appreciate the member’s comments around the

report from Advantage B.C., I think it is very important to take a look

at the rigour that was done. The report that came forward in 2010, that

was given to government, pointed out very clearly that there was not a

link, a correlation, between the jobs being created and the tax credit

that was being provided.

In fact, just the opposite, as one of the members mentioned. There

were a number of businesses — five of the largest recipients under the

program — already located in British Columbia before the program even

expanded in 2004.

The member mentioned the issue of green energy. That was never

expanded to the program. It was talked about by the previous government,

but it never happened. In fact, 90 percent of the refunds — and the

member mentioned this as well — subsidized three kinds of activities:

foreign exchange, securities trading and factoring. I think the member

identified the issue of factoring.

I think it’s also important to look at technology and the changes

that have occurred in the world since this program and tax break were

put in place. Foreign exchange traders — that trading has become more

and more automated, requiring fewer people. There aren’t the same kinds

of jobs as there were 20 years ago when this program was put in place.

You don’t see the same kinds of opportunities for jobs. So that’s not

there.

While I appreciate the member’s interests in referring this issue

to the emerging economy task force, from my perspective the opportunity

for the emerging economy task force is to take a look at the kinds of

issues and priorities that they believe are important to be looked at —

not for us to refer an issue to them and say that this is something we

want to continue on, but in fact to take a look at

opportunities.

There may be some ideas and approaches that come forward that

would provide support, but I think it’s important to acknowledge that

when you’re looking at foreign exchange, security trading and factoring

as the majority — 90 percent of all the refunds and the majority of

businesses already based in B.C. — it does not seem to me that the

rigour is there for this program to continue.

I want to emphasize again that the model that was developed in

2010, with the thorough report, was the model that was used each year to

examine this program, to take a look at the information that came

forward, to take a look at the opportunity to compare jobs with the

credit that was going out.

I think the previous member mentioned it as well. The Advantage

B.C…. While I appreciate the work that the CEO has done and I appreciate

the report that came forward, the report itself said that there were

limitations to what they were able to provide, because they do not have

access to actual taxpayer data. That’s not something that they had

access to. Therefore, they were not able to verify the information that

was being provided by the recipients who received the program. I think

that’s not the kind of rigour that the public expects when it comes to

this kind of program.

While I appreciate the members raising the issue and I appreciate

the attempt to look at an opportunity to be able to address this issue,

I think that there is no reason why…. Ideas around investments in

British Columbia continue to come forward. There are opportunities to be

able to include that information in the budget preparation as we move to

February. And I will be speaking against this amendment.

S. Bond: I appreciate the comments that have been made. I go back to the

fact that the quote that I….

You know, this is a reasoned amendment. It’s not saying that

eventually this program needs to be tweaked, modified, changed. But the

minister has moved on this issue more quickly than anything else that

she’s undertaken. I go back to the words in the NDP government caucus

release that “there is a lack of evidence and this is a B.C. Liberal

giveaway scheme.”

The request is a simple one: take a look, extend the time frame.

The program has shown benefit. I think our job in this House is actually

to ask those questions. While there may be some amusement about that on

the other side, the fact of the matter is that this has made a

difference in British Columbia.

[3:25 p.m.]

The question is simply: why so quickly? Why not give it the

opportunity…? To the minister’s “while I’m not interested in referring

it to the task force,” that’s exactly what a task force is created for.

It’s simply the opportunity to take a look at a program that’s existed,

look at its merits and its weaknesses, and take the opportunity to take

some due process here.

In fact, in our view — and that’s why the amendment has been

tabled — there was a significant lack of due process, quick action.

We’re simply asking for reconsideration and allowing there to be some

time before the decision moves forward.

A. Weaver: I wanted to stand and support the member for Prince

George–Valemount’s comments, with respect to this being a Liberal

giveaway.

Clearly, this is not a B.C. Liberal giveaway. It’s a program that

was established under the Social Credit government in 1988. It was

developed and continued through the NDP governments of the 1990s and

continued through the 2000s under a B.C. Liberal government.

I think it’s very unfortunate wording that it’s been phrased that

way, but it doesn’t change my views with respect to the actual amendment

itself. I do respect the fact that it was brought forward. I think it’s

a very reasoned amendment. But in light of the briefings that I’ve had

with Finance staff, I remain still committed in opposition to this

amendment.

[3:30 p.m.]

[R. Chouhan in the chair.]

Amendment negatived on the following division.

YEAS — 38

Cadieux

Rustad

Bond

de Jong

Coleman

Kyllo

Stone

Bernier

Wat

Johal

Lee

Hunt

Barnett

Tegart

Martin

Throness

Davies

Polak

Morris

Stilwell

Ashton

Oakes

Thomson

Sturdy

Ross

Isaacs

Milobar

Thornthwaite

Yap

Redies

Paton

Gibson

Sultan

Shypitka

Reid

Letnick

Larson

Foster

NAYS — 43

Kahlon

Begg

Brar

Heyman

Donaldson

Mungall

Bains

Beare

Chen

Popham

Trevena

Sims

Chow

Kang

Simons

D’Eith

Routley

Elmore

Dean

Routledge

Singh

Leonard

Darcy

Simpson

Robinson

Farnworth

Horgan

James

Eby

Dix

Ralston

Mark

Fleming

Conroy

Fraser

Chandra Herbert

Rice

Krog

Furstenau

Weaver

Olsen

Glumac

[3:35 p.m.]

Section 60 approved.

section 61.

S. Bond: I appreciate that, and I do appreciate the decision and the

conversation. Certainly, we’ll be monitoring the impacts. We are

concerned about a couple of potential investments, for sure. But I do

appreciate the minister’s willingness to receive ideas and input about

other possibilities related to the important work that does need to be

done when it comes to the attraction of international

investment.

With the indulgence of the Chair, as we move through these

sections related to

section 60, I’m simply going to ask the minister for

a

summary-type of comment on what now happens with people who are

currently registered and with registration. I think, in terms of being

efficient, just a

summary of what the next steps might be. What happens

to those who have registered? Is registration stopped at this point?

That will move us, I think, through to

section 66.

[3:40 p.m.]

Hon. C. James: Thanks to the member for the comments. I think this is exactly the

kind of process that people expect us to go through, which is a good,

healthy debate on issues and looking for an opportunity to find

solutions.

I am serious when I mentioned to the member and to other members,

if there are opportunities and specifics that they feel…. The member

mentioned a couple of businesses that they’re concerned about. If there

are issues where you believe an outreach needs to occur, then I’m more

than happy to take those names and more than happy to assist in that

outreach as well.

For the individuals who are currently in the program and

registered for the taxation year, that continues. No activity as of

September 11, 2017, will be counted, but they continue to be registered

for that taxation year. They have 18 months to file, so there’s a time

period for everybody to be able to file as the program winds

down.

Sections 61 to 76 inclusive approved.

section 77.

T. Redies: We’re getting to the end of this process.

Previously, in February, the government had committed to a

specific effective date of October 5 for the reduction of PST on

electricity to 3½ percent, with the aim to fully exempt electricity from

PST, effective April 1, 2019. Can the minister explain why no specific

timeline is provided for in this legislation for the

reduction?

Hon. C. James: To clarify, I think the member is speaking to

section

T. Redies:

Section 77.

Hon. C. James: This is, again, another one of those transition issues. Where a

new budget was brought in, the measure had to be brought forward. We

will have to wait and see when this budget is passed. Then we will look

at the regulation to set a date. We’ll look at that as quickly as we

can, but we have to wait. We couldn’t prejudge when this budget may or

may not pass in the Legislature before the regulation could be

written.

T. Redies: Thank you for that. Just to clarify, if it passes, will there be

any delay, or will it pass immediately after royal assent? Or will it be

put into place? How long will it take to get it effected?

Hon. C. James: The previous bill suggested 30 days after a budget was passed. We

tend to make changes on the first of the month. It’s just easier for

accounting purposes, so that’s what we’ll aim for. To be as quick as

possible, we’ll look at those 30 days, and we’ll look at the first of

the month to make it easier for businesses.

Sections 77 to 79 inclusive approved.

Title approved.

Hon. C. James: I move that the committee rise and report the bill complete

without amendment.

Motion approved.

The committee rose at 3:45 p.m.

The House resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

BILL 2 — BUDGET MEASURES

IMPLEMENTATION ACT,

Bill 2, Budget Measures Implementation Act, 2017, reported complete

without amendment, read a third time and passed.

Hon. D. Eby: I call Bill 11, the Provincial Court Amendment Act, 2017, second

reading.

Second Reading of Bills

BILL 11 — PROVINCIAL COURT

AMENDMENT ACT,

Hon. D. Eby: This bill will amend

section 30.2 of the Provincial Court Act to

extend the term of appointment for judicial justices of the Provincial

Court. Currently judicial justices are appointed for a single ten-year

term. The bill would change the term to 12 years. It would apply to all

future appointments as well as to past appointments made since this form

of appointment for judicial justices was created in the act in

The 2008 amendments were made to accommodate changes to the

judicial justices’ role, initiated by the office of the chief judge. Up

to that point, all judicial justices were appointed full-time and to age

70. The ten-year appointment provision allows for both full-time and

part-time judicial justices, with the latter being guaranteed a certain

number of working days per year.

[3:50 p.m.]

Another change was to require all prospective judicial justices to

be lawyers in good standing in the province. This arrangement has proved

successful. Now with a number of the initial appointments set to expire

next year, the chief judge has requested an extension to permit the

court to retain these experienced members of the bench for an additional

two years.

I think it is a worthwhile change that will assist the court and

help to ensure the smooth functioning of those areas of adjudication

undertaken by judicial justices — namely, hearing provincial offence

matters, local government bylaw matters and small claims payments, as

well as conducting bail hearing applications and issuing search

warrants. These are important facets of the justice system in British

Columbia, and I hope that all members of the House will support the

amendments proposed in this bill.

J. Sturdy: I rise today to notify the chamber that we will be supporting this

amendment, Bill 11, which really is a very simple piece of

legislation.

It is essentially striking out “10 years”, substituting “12 years”

and then putting in place a transition period and some

definitions of a

transition provision. It is, as the Attorney General said, a very

straightforward and logical piece of legislation. It extends the term of

the judicial appointments from ten years to 12 years. The 12-year term

applies to all future judicial appointments, as well as any made after

April 1, 2008. These amendments respond to a request by the Chief Judge

of the Provincial Court and will help the court retain experienced

judicial justices for a longer period of time. I think we all understand

the value of experience.

The head of the Provincial Court is the chief judge, who is the

official spokesman, and the chief judge has the power and duty to

supervise judicial officers. The court’s daily work of deciding matters

in a full and fair manner is carried out by its judicial officers, which

include judges, who make decisions in all areas in which the court has

jurisdiction; judicial justices, who preside over a limited range of

matters in court and also perform duties in a justice centre; judicial

case managers handle trial scheduling and initial court appearances; and

justices of the peace work in court registries as court services

justices of the peace.

This amendment in Bill 11 applies to all judicial justices and to

the British Columbia judicial justices or judicial officers who exercise

authority under various provincial and federal laws, as well as duties

assigned by the chief judge, which may include, as the Attorney said,

presiding over court to hear traffic and other ticketable offences, some

municipal bylaw matters, some payment hearings in small claims, and

applications for bail and search warrants at a justice centre. They

also, at times, conduct criminal arraignment hearings and deal with

applications under the Criminal Code at the Victoria Integrated

Court.

Judicial justices do not deal with applications under the Canadian

Charter of Rights and Freedoms or with offences that may result in

imprisonment. As a result, when a Charter issue is raised in traffic

court — or another matter that’s normally heard by a judicial justice —

the matter is referred to a judge. The point here is the value of

experience. The difficulties in replacing members that have left the

service is always an ongoing challenge. The longer-term tenure for these

positions is of value to the province of British Columbia. We will be

supporting this bill.

S. Furstenau: I rise to echo the comments of the Attorney General and the member

for West Vancouver–Sea to Sky in my support for this bill. There’s a

shortage of judges in our system and other challenges facing our court

system, which are slowing down cases and leading to inefficiencies and

breakdowns.

[3:55 p.m.]

This bill will extend the term of appointments for judicial

justices in the Provincial Court from ten to 12 years and include the

transitional provision to all justices appointed after April 1, 2008. I

understand that this bill has been introduced in response to the

recommendation of the Chief Judge of the Provincial Court and will

enable experienced judicial justices to continue to serve longer than

they are currently allowed.

There are lengthy delays throughout all levels of our court

system, and this is hampering the ability of British Columbians to have

timely and fair access to justice. Through extending the term of

judicial justices, I hope this bill will go partway to addressing delays

in these court hearings. But the problem is, as I’m sure the Attorney

General knows, much more widespread, affecting the B.C. Supreme Court

with the lack of judges appointed by the federal government to the B.C.

Supreme Court bench and the lack of judges and other issues resulting in

delays for our trials at the Provincial Court overseen by judges and

justices of the peace.

One significant problem that we are experiencing in our justice

system is a shortage of sheriffs across B.C., which is resulting in

delays in courtrooms and courtrooms being closed, sometimes for days on

end. It’s also resulted in judges having to toss out cases. I know that

the Attorney General has said he is working on this issue. I look

forward to seeing what progress the government is able to make to ensure

that we are attracting and retaining enough sheriffs to make our

courtrooms run in a timely manner.

This bill focuses on one aspect of our judicial system, extending

the term of judicial justices, and may provide some relief for British

Columbians in court over violation tickets, local government bylaws and

small claims. I am happy to support this bill. I look forward to seeing

more measures from government to address the challenges we see in our

court system.

Mr. Speaker: The question is second reading of the bill.

Motion approved.

Hon. D. Eby: I move that the bill be referred to a Committee of the Whole House

to be considered at the next sitting of the House after

today.

Bill 11, Provincial Court Amendment Act, 2017, read a second time and

referred to a Committee of the Whole House for consideration at the next

sitting of the House after today.

Hon. D. Eby: I call second reading of Bill 6, Electoral Reform Referendum 2018

Act.

BILL 6 — ELECTORAL REFORM

REFERENDUM

2018 ACT

(continued)

A. Weaver: I rise to continue my place in this debate on Bill 6, the

Electoral Reform Referendum 2018 Act. As I was speaking yesterday

evening, I am delighted to stand in support of this bill.

[R. Chouhan in the chair.]

One of the things I would like to address now — I didn’t have a

chance to complete it yesterday — is some of the various types of

proportional representation that will be explored in this extensive

consultation period that we’re beginning to embark on under the

direction of the Attorney General’s office.

If we go to the Angus Reid Institute, they did public interest

research, which they released a couple of years back. I forget the exact

date, but it was a very thorough analysis. They looked at a number of

voting systems, and they talked about a number of ballots to get a sense

of what people felt. They talked about the first-past-the-post system as

one example. They explained, in a very straightforward manner, how it

would be used and how it could be voted. They talked about a double

system, whereby you could vote for a candidate and a party in a two-type

system. They talked about the single transferable vote as one possible

approach, an approach that has twice been used here in British Columbia,

and they talked about numerous others.

I do recognize that I have not got much time left here, although I

do so wish that we had royal assent of the bill, granting the B.C. Green

Party party status, because I have at least another hour and a half that

I could talk on this very important…. I know members opposite would be

delighted. I will say, though, that it is inappropriate for members

opposite to continue to spread information that is not correct with

respect to the process being followed.

It is not correct that regional parts of British Columbia are at a

disadvantage. As I pointed out yesterday, proportional representation

would give them an advantage over what the status quo is. It would allow

members in the Okanagan to be serving in government. It would allow

members of the opposition to be serving on southern Vancouver Island if

a form of proportional representation were in place.

[4:00 p.m.]

To suggest somehow that the allowance of other parties to be in

this Legislature is giving rise to a national socialist party or some

other party is rather absurd. The parties reflect the will of the

people. Societal changes occur on short and long terms, and we are here

to represent society. We’re not here to suppress other

parties.

To suggest that we don’t want other parties because it’s bad for

democracy is actually an affront to democracy. I would hope that as time

goes forward, the members opposite realize that this is not the approach

we want in British Columbia. We want to recognize society as a whole,

and this approach to having a referendum does just that. I’ll end

there.

M. Hunt: It’s my absolute delight to rise and speak to Bill 6, the

Electoral Reform Referendum 2018 Act. In my opinion, this bill proposes

to change the fabric of our democracy, which is built on the British

parliamentary system of representative government. It will affect

British Columbians across the province, regardless of who they vote

for.

It is in fact my pleasure to follow the leader of the Green Party,

who I think should actually spend more time reading Bill 6 than he did

in reading old Hansard s. I have serious concerns about how the

question is to be determined. Ultimately, the bill ensures that the

question will be decided by the NDP cabinet behind closed doors after, I

assume, consultation with the coalition secretariat. Now, that’s code

for meaning the Green Party will decide.

Ultimately, what form of proportional representation is not in

Bill 6? So what form are we actually going to end up with? What form is

actually going to be put to the vote? We don’t know. Bill 6 doesn’t say.

There are dozens of forms of proportional representation, and there are

new ones being proposed all the time. The leader of the Green Party

spoke of many wonderful benefits of this new proportional representation

system, but that isn’t what is in Bill 6. I submit that it’s in his

imagination, and that’s wonderful.

This is the third time there has been a referendum, as British

Columbians voted on this in 2005 and then again in 2009. They’ve said

twice now that they do not want proportional representation. I have

further concerns with the nature of the public engagement process that

is to be determined. For the 2005 and the 2009 referenda, the

independent, non-partisan Citizens’ Assembly on Electoral Reform defined

the process and the question. Each time, the assembly ensured that

British Columbians from every corner of this province were

consulted.

In this bill, there is absolutely no duty to consult. As a matter

of fact, the words “consult” or “consultation” aren’t even to be found

in this bill. Yet the leader of the Green Party would like to tell us

that it’s there, and he’s going to be a part of it. Well, I’m sorry.

It’s simply not in the bill. It simply says a bare majority of 50

percent plus one is the bar, and that bar is being lowered as low as it

can possibly go.

It ignores the need for regional support. We heard just recently

from the leader of the Green Party. He says that regional concerns are

going to be addressed. My question is: where? It’s not in this bill.

There’s a lack of respect for the public, as far as I’m concerned, and

it’s a desperate opportunity that is being taken here to try to secure

the shaky political alliance that we have in this House today. In fact,

I believe that this bill will guarantee that the Greens or another small

party will perpetually hold the balance of power here in this

province.

It shouldn’t be this easy to change what is fundamentally

important to our democratic system. Strata councils, for example, need

75 percent for a special resolution. Not-for-profits and charities also

require 75 percent for special resolutions. Canada’s constitution

requires both the House and the Senate to agree, and two-thirds of the

provincial legislatures must approve it, as well as 50 percent plus one.

That is, it needs both regional and popular support.

[4:05 p.m.]

Now, if we look at the NDP’s campaign platform dealing with the

referendum, it says: “We’ll ensure B.C.’s regions are all represented

fairly.” Well, that simply isn’t the case in Bill 6. There is no

mechanism for a regional voice in this bill. Metro Vancouver will decide

the issue, and the rest of the province will be ignored.

That’s right. I’m sorry. The leader of the Green Party confirmed

that the NDP’s campaign platform no longer has any meaning, because the

NDP-Greens have their backroom deal that matters now until the next

election. So this is a simple example of the power of minority parties

in a coalition minority government.

Prince Edward Island recently had a referendum, with 52 percent of

voters in favour, but only 36 percent of the voters showed up to vote.

The government rejected the referendum because the turnout was not

enough. That’s Prince Edward Island. Remember, we can fit it into

Surrey, and much less population. But they said that wasn’t good enough.

Well, the NDP coalition thinks that 50 percent plus one is just fine, no

matter how many show up, and even if only Metro Vancouver makes the

ultimate decision.

I come from local government. In local government, we have a thing

called R and D. It’s research and duplicate. We look for best practices.

We look all over the world to try to find the best practices and try to

see how we can modify those and make those work at home. Just like a

farmer. A farmer will pick the best variety of whatever it is he wants

to grow, looking for the attributes that he is wanting in that

particular crop. So what have the NDP-Greens found in proportional

representation that they want to emulate here in British

Columbia?

There are 86 countries who use some form of proportional

representation. Now, who are we trying to emulate? Well, let me read

them. Let me read them to you: Albania; Algeria; Angola; Argentina;

Armenia; Aruba; Australia.

Interjection.

M. Hunt: I’m doing it in alphabetical order, please. I’m keeping the order,

okay?

Austria; Belgium; Benin; Bolivia; Bosnia-Herzegovina — that’s a

great one; Brazil; Bulgaria; Burkina Faso; Burundi; Cambodia; Cape

Verde; Chile; Colombia; Costa Rica; Croatia; Cyprus; Czech Republic;

Denmark; Dominican Republic; East Timor; El Salvador; Equatorial Guinea;

Estonia. All countries we’re trying to emulate here. Of course, there’s

the European Union. We’re at “e” right now. Each member state gets to

choose its own PR system going into this. There’s Faroe Islands, Fiji,

Finland, Germany. We’ll talk more about that in a minute.

Then there’s Greece. Greece is a very interesting one. In Greece,

not only do they have their party lists, but in fact, whoever gets

majority gets an extra 50 seats out of their 300-seat House, which means

that whoever the majority is and whoever the government is has at least

40 percent of the government seats coming from party lists, not from the

choice of the electorate.

No. 37 is Greenland, then Guatemala, Guinea, Guyana, Honduras,

Iceland.

Interjections.

M. Hunt: I’ll get to Germany. Just hang on. I’ll get back to

that.

Indonesia; Iraq — now there’s a place we want to emulate; Ireland;

Israel; Italy. Oh, also in Italy, they do as well have a bonus that goes

on. For those who get the majority, they get a bonus. Even more of the

party lists are added in.

Kazakhstan, Kosovo, Kurdistan, Latvia, Lesotho, Liechtenstein,

Luxembourg, Macedonia, Malta, Moldova, Montenegro, Mozambique, Namibia.

I’m at 60, so we’ve still got a few more to go. No. 61 is the

Netherlands.

Interjections.

M. Hunt: Yes, yes, alphabetical order. Very good.

New Zealand, Nicaragua, Northern Ireland, Norway, Paraguay, Peru,

Poland, Portugal, Romania. Here’s another great one — Rwanda.

[4:10 p.m.]

San Marino; Sao Tome and Principe; Serbia; St. Maarten; Slovakia;

Slovenia; South Africa; Spain; Sri Lanka; Suriname; Sweden; Switzerland

— I’m at the “s”; Tonga; Tunisia; Turkey; and Uruguay. Like I said, 87

of them.

Interjections.

Deputy Speaker: Members.

M. Hunt: What is the most common thread in the 87 countries?

Interjection.

M. Hunt: No, Scotland isn’t on the list.

The most common feature we find is, of course, party lists and

instability, minority coalition governments producing instability for

both the voters and for investors.

Now, let’s take a look. I had Belgium in there.

Interjection.

M. Hunt: Well, hold it a second. Australia, you have to remember…. It isn’t

the House of Commons that is by proportional representation; it’s the

Senate. Now, at least they get to vote for their Senate. We give them

that benefit over Canada, but by the same token, it actually is only the

Senate. The House is not elected that way.

In Belgium, in 2010-11, it took 589 days for the parties to get

together to try and come up with a coalition to govern. Meanwhile, the

government operations continued. The bureaucracy worked just fine, but

major decisions, like the migration legislation, the eurozone crisis,

were all delayed for over a year. Their six-party coalition is what

actually makes up the government — there are 11 parties that are in

parliament — and that government lasted two years.

In the Netherlands…. My friend raised the issue of The

Netherlands. In 2017, it took 208 days before the government was formed.

The government consists of four coalition parties, and there are 13

parties in the parliament, including, I would add, a coalition that is

an anti-LGBTQ party. In Spain, in 2015, it took 314 days for them to

form a coalition. In fact, no coalition was formed in Spain after 314

days, so they had to have an election six months later. Spain has 12

parties in their parliament.

Italy. Now, Italy is a very interesting one. Italy has, in fact,

tried twice — two different PR systems since 1993 — but in the 70 years

between 1946 and 2016, they have had 65 different governments in 70

years. Now, that’s real stability, isn’t it? Currently there are 28

parties in six separate alliances, and the average length of their

government is 21 months.

Yes, you wanted me to talk about Germany, so let’s talk about

Germany. Well, in fact, in Germany, they just had an election in

September. Well, we won’t know who the next government is until sometime

in 2018 while they’re trying to work it all out. And by the way, the

far-right party, the Alternative for Germany, will, in fact, have 94

seats in their parliament, and that same party advocates for the return

of Nazism. Some very well-founded thing by my friends

across….

All of this is in the context — at least, these ones here that I

referred to specifically in Europe — of the European Union, which is a

government that is elected by PR, but it simply has the ability to

overrule the national governments of the union. So they really don’t

care. By the way, no, I didn’t talk about Greece, because we all admit

that one is a disaster all by itself.

Now, the leader of the Green Party brought up Northern Ireland and

New Zealand as two countries that have the British parliamentary system

that use proportional representation. Well, let’s take a look at these

two.

Northern Ireland. Well, they re-established parliament in 1998,

which means they’re just under 20 years. Their term is five-year fixed

term elections. Since the re-establishment of parliament in 1998, they

have had six elections. That means there’s an average of three years

that the governments have lasted where in fact they were given a

five-year term. The last parliament — well, I’m sorry. It only lasted

for one year. There are eight parties in that parliament. Their election

was on March 2 of this year, and a coalition still hasn’t been

established in Northern Ireland. They’re still working on trying to

figure out who is going to govern them after an election back in

March.

[4:15 p.m.]

New Zealand. Yes, New Zealand has a form of proportional

representation that is a multiple-member parliament. That was, first of

all, introduced in 1996, so again, just around 20 years ago. There are

120 members in the House, and 71 of them are elected in the

first-past-the-post. So they still have first-past-the-post within New

Zealand, even though some members don’t want to admit it. The other 49

come from party lists. That means there are over 40 percent who are

appointed by political parties, and only 60 percent are actually

accountable to their electorate.

You see, under this system, in the 21 years they’ve had it,

they’ve never had a majority government. Currently there are five

parties in the parliament, and that actually is the lowest number they

have had since they introduced multi-member parliament. And you know,

they recognize its instability. Their term of office is only for three

years, because they know it isn’t going to last that long

anyhow.

When we look at proportional representation across the globe, we

recognize it’s a global disaster. Now we have a lobby group that is

pro-proportional representation that has created their own system.

They’re calling it local PR, which they hope the cabinet will adopt.

Well, wish them luck.

What about accountability? The proportional representation systems

make it difficult for voters to hold their governments or even their

local representatives to account. Of course, the Green Party has already

demonstrated that in the alliance they have made with the NDP. Some

parties are ever-present in governing coalitions under the PR system,

despite their weak electoral performances. Now, maybe this is the

attribute that the Green Party is looking for.

In Germany, the Free Democratic Party has held the balance of

power for 45 out of 64 years between 1949 and 2013. During that time,

their average vote was only 7 percent of the vote, and it never eclipsed

12.5 percent of the vote. Yet they held the balance of the

power.

We see that countries that use proportional representation use

party lists. That’s where the party decides who sits in the House, not

the voters. Even if some members are elected by the voters, the

difference between the seats won and the percentage of the seats in the

House is made up from party lists. That means that those members are

only accountable to the party who appointed them, not to the citizens of

their country.

If people think parties are bad today where we have party

discipline, where the Premier or the Prime Minister chooses cabinet

posts and members of that party are obliged to do his or her bidding in

order to be considered for cabinet, what will it be like when the party

is deciding who actually sits in the Legislature? The loyalty will not

be to the citizens; it will be to the party.

Now, what about the extremes, the far-left and the far-right

parties? Well, the PR system legitimizes those extreme or fringe parties

from the far right or far left with their political ideology. Usually,

they don’t get directly elected, but they can get a seat by their

percentage of votes. Far-right leaders and political parties are in fact

rising in popularity around the world.

We saw the far-right party — Oh, I’m sorry; that’s Germany again,

isn’t it? — the AfDreceive 13 percent in Germany’s 2017 general

election, which was up from the 4.6 percent that they had four years

ago. We have Marine Le Pen, the French far-right leader, who won a seat

in the parliament in France’s 2017 general election.

What about broken promises? We’ve heard a lot about that since the

election. We find that the Premier of the province said, back in May,

before the election: “We’re going to have 50 percent say yes or no.” The

question was asked of him: “So you’re going to give them one system to

vote on?” The Premier said: “Yeah, exactly.” Well, now with Bill 6,

instead of a simple yes-no ballot for proportional representation, the

voters could have multiple choice, because in Bill 3 there is the option

to have more than two choices on the ballot.

[4:20 p.m.]

That means voters who want first-past-the-post…. Well, if they

have more than one. They are then feeling obligated that they have to do

a multiple choice. They have to put a second priority or a third choice.

That ultimately forces them to vote for proportional representation as a

second and/or third choice, which they really don’t want. So in fact,

first-past-the-post — if it doesn’t win on the first ballot, not much

hope.

It’s simple to see an example of this. I love this example,

because this is one of those wonderful pieces of trivia. It’s that when

you have more than two choices on a ballot how the question becomes so

critically important. I give you the choices that happened with the

amalgamation of Fort William and Port Arthur in 1970.

For those who are geographically challenged, that’s at the end of

the Great Lakes. That was a great port where the grain from the western

provinces all went up through the St. Lawrence Seaway and the rest of

it. In 1970, the two cities came together, as well as the counties

around them, and they had a vote on the new name for the amalgamated

city.

Now, rumour has it that those who were deciding the ballot

question wanted the name “Thunder Bay.” But alas, they knew that the

name “Lakehead” was more popular with the electorate. So they had a

problem. How were they going to make this work? Well, they also

discovered that there were some people that not only wanted to call it

“Lakehead,” but they wanted it as “the Lakehead.”

Guess what was on the ballot. The ballot had three choices. The

final count: “Lakehead” got 15,302; “the Lakehead” got 8,377 votes; and

the winner, “Thunder Bay,” snuck through with 15,870 votes. Split the

vote, come up the middle, and they ended up with what they wanted — the

name “Thunder Bay.”

When you have more than one choice, more than one possibility on

the ballot, you now start to have….

Interjection.

M. Hunt: Well, this is a referendum. This isn’t an election, okay? So the

actual question is very, very important. But that will be decided,

again, in Bill 6. That will be decided by the cabinet after they consult

the coalition secretariat behind closed doors. I’m sorry. I just don’t

think that’s good enough.

But what are the strengths about first-past-the-post? Well, the

reality is that there are clear choices between political parties. All

you have to do is look at the three major parties that we’ve had and the

different members of them. We can all see that there are different

options. On our side of the House, we have the free enterprise coalition

— those who are Conservative, those who are Liberal, each working

together and coming up with a platform that works together. We find the

same thing with our friends on the other side of the House. But there

are clear choices within the main political parties.

We also see that there’s stability, because usually, very often,

there is stability because majority governments are produced. Strong

oppositions are produced to perform the role of keeping the government

in check. It tends to exclude extremist or fringe parties simply because

we have to work together in the Legislature and within our parties

themselves.

It promotes strong links with our constituents because our

constituents know who they elected, they know who won, they know how to

get a hold of them, and they know they are there as their

representatives. This also moderates the opinions, because I know I have

to work with all of my voters, not just my political party. The emphasis

is on strong individual candidates rather than on those who are just

saluting the party flag. Popular independent candidates can, in fact,

get elected without a political party, and it’s simple to use and

understand.

Whereas when we look at proportional representation, you go

through that