2011 Legislative Session: Fourth Session, 39th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Wednesday, May 16, 2012

Afternoon Sitting

Volume 38, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Routine Business

Introductions by Members

Statements

Bike to Work Week in Nanaimo

D. Routley

Introductions by Members

Statements

(Standing Order 25B)

B.C. Beef Day

D. Barnett

Child and Youth in Care Week

C. Trevena

Diabetes

R. Hawes

Cycling4Diversity multiculturalism initiative

D. Routley

Provincial parks

J. Thornthwaite

Mining development process in Cariboo area

B. Simpson

Oral Questions

Costs to B.C. of federal anti-crime legislation

A. Dix

Hon. S. Bond

K. Corrigan

Privatization of liquor distribution

S. Simpson

Hon. R. Coleman

Community living services and client interaction with criminal justice system

N. Simons

Hon. S. Cadieux

Access to washrooms in income assistance offices

M. Sather

Hon. S. Cadieux

Coastal response plan for Japanese tsunami debris

G. Coons

Hon. T. Lake

Government response to changes to federal legislation on fish habitat protection

R. Fleming

Hon. T. Lake

Tabling Documents

Report on multiculturalism, 2010-2011

Motions Without Notice

Appointment of Special Committee on Timber Supply

Appointment of Special Committee to Appoint a Conflict of Interest Commissioner and Merit Commissioner

Hon. R. Coleman

Orders of the Day

Second Reading of Bills

Bill 54 — Provincial Sales Tax Act

Hon. K. Falcon

B. Ralston

N. Macdonald

C. Trevena

D. Donaldson

M. Sather

H. Bains

C. James

M. Mungall

M. Karagianis

B. Routley

Report and

Third Reading of Bills

Bill 36 — School Amendment Act, 2012

Committee of the Whole House

Bill 41 — Miscellaneous Statutes Amendment Act (N o . 2), 2012 (continued)

Hon. S. Bond

Report and

Third Reading of Bills

Bill 41 — Miscellaneous Statutes Amendment Act (N o . 2), 2012

Proceedings in the Douglas Fir Room

Committee of the Whole House

Bill 41 — Miscellaneous Statutes Amendment Act (N o . 2), 2012 (continued)

L. Krog

Hon. S. Thomson

B. Routley

Hon. S. Bond

K. Corrigan

J. Brar

Bill 36 — School Amendment Act, 2012

R. Austin

Hon. G. Abbott

Bill 37 — Animal Health Act

Hon. D. McRae

L. Popham

M. Sather

Proceedings in the Birch Room

Committee of Supply

Estimates: Ministry of Health (continued)

M. Farnworth

Hon. M. de Jong

G. Gentner

H. Lali

L. Popham

J. Kwan

B. Ralston

Estimates: Ministry of Justice

Hon. S. Bond

L. Krog

K. Corrigan

[ Page 12021 ]

WEDNESDAY, MAY 16, 2012

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

E. Foster: It gives me great pleasure today to introduce two guests that are visiting from the Okanagan. I was about to say they were both constituents of mine, but it just occurred to me that my guests, a mother and her daughter…. Kat Bruce is a constituent of mine, a resident of Lumby and a longtime friend, and her daughter, Kendra Rich, I believe is a constituent of the Minister of Forests, Lands and Natural Resource Operations.

They are here to have a look at how things work in the Legislature and visit Victoria. I ask the House to make them very welcome.

Hon. D. McRae: As many of you know, today is 2012 B.C. Beef Day. It was a great celebration back behind the Legislature.

In the gallery today we have a group of representatives, though, from the B.C. Cattlemen's Association. I would like to take this time to introduce them. They represent a huge number of individuals across this province who do great work.

[1335]

Today we have Judy Guichon, David Haywood-Farmer, Bonnie Haywood-Farmer, Kevin Boon, Mike McConnell, Rick Mumford, Larry Garrett, Martin Rossmann, Kirsten Halstead, Craig Park, Brooke Madley, Joe Gardiner, Samantha Gardiner and Fred Cave. Would the House please make them welcome.

J. van Dongen: I'm very pleased to introduce to the House today my cousin, a retired teacher, Dr. Adriana Zylmans from Richmond. Visiting with her is her cousin from Holland, Anya Zijlmans — the very young-at-heart Anya Zijlmans. With them, as well, are Joan and Rick Withers. Joan is a retired teacher, and Rick is retired from the Ministry of Education. I'd ask the House to please make them all very welcome. Joan and Rick are from Victoria.

R. Hawes: This is going to be a fairly long list. Today we had the Canadian Diabetes Association visit us in the Legislature. Today is diabetes day in the Legislature. Today in the gallery are a number of members of the staff of the Canadian Diabetes Association, and those who have diabetes and their parents.

We have Chuck Pusateri; Connie Abram; Donna Van Walleghem; Glenn Doucet; Heather Vandergeist; Janet Noden; Jenny Schmidt; Jessica Schmidt, one of the cutest little girls you'd ever want to see; Joshua Gates; Julia Holder; Laura Brandes; Leslie Lopez; Meg Stevens; Mike Cloutier; Patty Gates; Pilar Iglesias; Randi Garcha; Riki Lewald; Steven Lang; Tanyss Christie; and William Van Den Broeck, a young man who I am absolutely convinced will one day be sitting here in this Legislature. Could the House please make all of them welcome.

B. Simpson: I, too, had the opportunity to go outside and enjoy the beef as we celebrated Beef Day. I have to say that the Speaker looked very good in that black cowboy hat. It matched your outfit quite well.

In the gallery today, I think, is a constituent of mine that's down here with the B.C. Cattlemen's Association, Martin Rossmann. Martin is the president of the Quesnel Cattlemen's Association and has done a very good job of keeping my office informed about cattlemen's issues in our region. Welcome to Martin, and I ask the House to make him feel welcome.

R. Howard: I have two guests to introduce today. With us are George and Becky Chan of Victoria. George and Becky are the brand-new owners of Jonathan's Restaurant in Victoria, one of Victoria's best-kept secrets nestled in amongst the landscape there in the Royal Scott inn. Would the House please make them welcome.

Statements

BIKE TO WORK WEEK IN NANAIMO

D. Routley: Yesterday the Whip on this side of the House gave me the privilege of being able to drive to Nanaimo and back, which was a bit of a contradiction because it was for Bike to Work Week. I participated in a commuter challenge and won against the cars that I was competing against. It helped that one of those cars was stopped for speeding. I won't say who was driving it — Mayor John Ruttan of Nanaimo.

It was a great event that brought increased awareness to the role that bicycles play and an increased sense of respect both from car drivers to cyclists and from cyclists to drivers as well. I'd like the House to help me celebrate Bike to Work Week in Nanaimo.

Introductions by Members

D. Barnett: I, too, would like to recognize a member from the B.C. Cattlemen's Association — a very dedicated, hard worker in my riding, past president of the Cariboo regional hospital district and a director of the Cariboo regional district that did many, many wonderful things for my region — Rick Mumford. Would you

[ Page 12022 ]

please help me welcome him.

M. Dalton: In the gallery today is my wife, Marlene. I was going to say she's wearing fuchsia pink, but there are five ladies that are wearing fuchsia pink, and I don't want there to be any confusion. She's there, anyways, with a good friend of ours, Barry Pegg. This is his first time in the chamber since 1966, when he was part of the Youth Parliament. So would the House please make them feel welcome.

[1340]

J. Rustad: The Spirit of the North Health Care Foundation does a lot of great work throughout the north. My colleagues from Prince George–Valemount and Prince George–Mackenzie, along with myself, like to try to support it where we can. An item that was auctioned off was to have a lunch down here.

I'd like to introduce to the House Steve Pataki from Prince George as well as Norman McMillan and Irene Ohlson from Qualicum Beach. We had an opportunity to have lunch today to talk about the goings-on in the Legislature. We were also joined by the member for Parksville-Qualicum, who came and had lunch with us. Would the House please make them welcome.

Hon. T. Lake: I wanted to quickly join my colleagues in welcoming the B.C. cattlemen here today, a great organization located in Kamloops.

I also want to take the opportunity to talk about the SPCA City Challenge, Kamloops versus Prince George, which we win every single year. I want to remind my colleagues from the Prince George area that they should be helping out their SPCA, contributing, as should all members across the province, to support this great organization. I look forward to seeing my colleagues from Prince George wearing Kamloops Blazers shirts here in the Legislature.

Hon. S. Bond: I can assure you that one of the last things that my colleague from Prince George and I will be doing is wearing a Kamloops Blazers jersey.

I am very delighted today…. I know there is a tradition of announcing the birth of new babies in the chamber. I want to rush to admit that it is not a grandbaby, so it wasn't a big secret I was keeping.

Linsey Cole, who was the administrative coordinator for the Minister of Advanced Education before she left on her maternity leave, and Chris Tupper, who was my former ministerial assistant, welcomed their first baby yesterday. Alistair Cole Tupper weighed in at 9 pounds 4 ounces. From the first picture that I got, I can assure you that he looks like a mini-Tupper.

I know that many have worked with both Linsey and Chris. We are very, very excited for them. I know they are going to make wonderful parents. They are caring, thoughtful and fantastic people. So we want to welcome Alistair Cole Tupper.

L. Reid: I would ask the House to join me in welcoming two wonderful women to the gallery today. One is no stranger to this place, Sheila Orr, a former member, and one is attending question period for the first time, Anne Millar. I'd ask the House to please make them welcome.

Hon. B. Lekstrom: As well, joining us today representing the B.C. Cattlemen's is a friend of mine and a gentleman who has worked long and hard for the beef industry in this province. Will the House please join me in welcoming Mr. Mike McConnell.

D. Hayer: Joining us in the gallery are four exceptional students from the best school in Canada, Kwantlen Park Secondary School in Surrey. These students are Alliance Babunga, Leea Stott, Jasmin Ring and Faythe Lou. They are accompanied by their teacher, Ms. Neetu Dhaliwal, who is a former constituency assistant of mine. Her family is one of the very prominent pioneer families in Canada.

I'd like to recognize these amazing students, as they are winning finalists in the Rotary Club of Surrey citizenship development program. Each of them wrote a short speech about what being a Canadian citizen means to them and what contribution they have made to the community of Surrey. This competition and this trip are sponsored by the Rotary Club of Surrey and the Adventures in Citizenship program.

They are also joined here by the Rotary Club of Surrey volunteer supervisor and past president, Mr. Duane Buchanan. My wife, Isabelle Martinez, is here, who is also a past president of the Rotary Club of Surrey.

I have welcomed these from the Adventures in Citizenship program to Victoria for the last 11 years. I would appreciate if the House would please make them very welcome and thank them for the exceptional work they have done — the students as well as their teacher and all the volunteers — and for coming over here and learning about the government.

[1345]

Deputy Clerk: Introduction of bills.

S. Fraser: I'd like to introduce two Bills today: my colleague from the Cowichan Valley and the hon. Speaker. I've always wanted to do that.

Interjections.

Mr. Speaker: Members. Members.

Does the member for Kootenay East want to get up on a point of order? [Laughter.]

[ Page 12023 ]

Statements

(Standing Order 25B)

B.C. BEEF DAY

D. Barnett: Today is Beef Day, and for us here at the Legislature, it's about more than just enjoying a spring barbecue in the sun — though it was very delicious, I must say. Today we are joined by the B.C. Cattlemen's Association, the Ranching Task Force, representatives from the B.C. Food Processors Association, local government, industry representatives, and all kinds of others.

Beef Day is about appreciation, education and celebration. We appreciate the hard work of all B.C. ranchers, who are leaders in animal health, food safety and land stewardship. We educate people about the strong partnership between our government, the B.C. Cattleman's Association and the B.C. Association of Cattle Feeders. Because of this partnership, families thrive, our economy thrives, and we have more opportunities for tomorrow.

We celebrate our accomplishments, getting B.C. beef into the Chinese and Korean markets. Our government and B.C.'s cattlemen work hard together, so today we celebrate the progress we know we'll make in years to come. We celebrate those who enjoy it. Beef is a staple food item for most B.C. families, and it is a natural part of our culture and heritage. Of course, we celebrate those who are skilled in the fine arts of preparing and cooking beef.

I must thank the Freding family for their wonderful Angus beef from Oliver, the House of Q barbecue team and chef Brian Misko for showing us how it's done. On behalf of everyone here in the Legislature, happy Beef Day.

CHILD AND YOUTH IN CARE WEEK

C. Trevena: Designating a week of the year to a certain topic, issue or group is intended to focus society on that topic, and maybe sometimes we should keep that focus a little longer. The fourth week in May was last year designated as Child and Youth in Care Week. It's an opportunity to highlight the diversity of the population and its ability to survive through many vicissitudes. But our society should keep a focus a little longer than just one week.

Children and youth in care are, like all young people, unique. They have their own needs and their own accomplishments. As the Federation of Youth in Care Networks suggests, we should "encourage our communities to notice, listen to and respect them." That is fundamental.

Children and youth in care are not just statistics, not just the numbers of kids who have been removed from their families for whatever reason but living and breathing human beings and often very vulnerable; where parents are unable to take care of them and often where a family member can't help; kids who are differently abled and kids who have real problems.

Foster families are there, usually loving and hard-working families who provide extraordinary support. But then the kids age out. When they turn 19, they're deemed an adult, and they lose that care and that fragile support.

It's not easy finding your way in the world, and it's much more difficult when you're totally on your own, navigating everything from food bills to apartment rentals to post-secondary loans. No youth wants their hand held through everything, but on this Child and Youth in Care Week we should acknowledge that we can do better for young people as they move away from government care into the adult world.

This is perhaps the time to remember that we are signatories to the UN convention on the rights of the child, which comes with significant rights for young people and the responsibility for us to guarantee them.

We have a duty to both protect and nurture those children and young people, and that means providing stability, guaranteeing education. It means treating children and youth with dignity and respect, not just ensuring that their basic needs are met.

[1350]

We won't know how well we've done for many years, but if we have truly invested in our young people in care, if we've shown them respect, our whole society will benefit.

DIABETES

R. Hawes: Today is diabetes day in the Legislature. Today in British Columbia there are 360,000 people living with type 1 or type 2 diabetes. By 2032 that number is expected to grow to over 770,000, and about 5 percent of those have type 1 diabetes.

Unfortunately, statistics show that 57 percent of Canadians with diabetes cannot afford the medication, the devices and the supplies they need to effectively manage their disease. Not properly managed, diabetes can lead to kidney failure, blindness, heart attack, stroke and amputation of limbs. And 80 percent of the cost of diabetes to the health system relates to treating these complications.

Clearly, ensuring those with diabetes have the tools to manage their disease is critical. Any investment the government makes today to decrease the number that cannot afford to manage their diabetes will pay dividends in the longer term. Today the Canadian Diabetes Association released a report that shows that if every diabetic that could benefit from an insulin pump had a pump, the savings to government would be over $5 million annually by the year 2032.

At the same time, though, if we are able to reduce the epidemic of type 2 diabetes, which is largely preventable and is now more and more showing up in children, we would dramatically reduce the financial cost to taxpayers.

[ Page 12024 ]

But even more important is that we would greatly reduce the terrible toll these complications put on families if we all took the diet and exercise steps that delay or prevent type 2 diabetes.

The message is get assessed, get active, eat right, and invest in those with diabetes so that they can control their disease. We will all benefit.

CYCLING4DIVERSITY

MULTICULTURALISM INITIATIVE

D. Routley: I'd like to share with the House some information about a great event called Cycling4Diversity. This is a group of cyclists who are attempting to walk the talk, or cycle the cycle, of multiculturalism. We often talk about how we need to respect the differences in our community but then shrink back into comfortable settings after expressing those sentiments.

This is an event that is a mission to Victoria, a bicycle ride visiting nine cities. There have been eight proclamations, one by this House, which proclaimed May 20 to 26 Cycling4Diversity Week. They're building dialogue one city at a time.

Eight to 12 riders will be riding all the way. They stop at schools to promote diversity and awareness of issues regarding racism. They encourage us all to become more involved interculturally and to address the divisions and isolation that grow between communities.

As we become more diverse in this province, we face increased issues of diversity and division. This awareness and creation of a discussion will come to culmination here at the Legislature on the 25th. I'll be joining them in Sidney to ride into the Legislature. They will visit Vic High, a fire hall and one other school.

Ken Herar started this event because he was invited to a Christmas party but then wasn't allowed because they weren't inviting South Asians. He felt that rather than react to that negatively, he would do something positive. So as diversity columnist with the Abbotsford Times , he decided something had to be done.

We often talk about diversity and multiculturalism and the need to heal the divisions, but we don't often live it the way Ken Herar and these people who are supporting this ride do. Our existing communities must embrace each other without sacrificing our own cultures.

The ride will leave on the 22nd and end here on the 25th in Victoria. I'd like to congratulate all the people involved with Cycling4Diversity.

PROVINCIAL PARKS

J. Thornthwaite: Next weekend thousands of British Columbians will head out to B.C. parks for the Victoria Day long weekend, and for good reason. Our parks offer great value and the perfect opportunity for families to get outside and enjoy our beautiful province.

Reservations are up 13 percent this weekend, and B.C. Parks, when they opened for reservations in March, saw a 41 percent increase over the same period in 2011. Almost 20 million people visit our provincial parks every year, and it's not surprising that people are flocking to our parks. The visitor satisfaction rate is 80 percent, and we're always working to raise it even higher.

I consider myself very lucky to have Mount Seymour Provincial Park right in my own backyard.

[1355]

Last year I attended the announcement that you don't have to pay to park in parks, with the Premier and the Minister of Environment. Last month I joined the minister and my colleague from North Van–Lonsdale and volunteers from the Vancouver Korean Hiking Club to deactivate an unauthorized trail at Mount Seymour. We celebrated the work and commitment of all of our park volunteers.

British Columbia has 101,005 parks, and 15 percent of our province's total area is now protected, more than any other province in the country. Our park system is second in size only to the Canadian national park system. There are about 6,000 kilometres of hiking trails, almost 1,200 roads and 27,000 free parking spots.

More than 230 parks have facilities for those with disabilities. That's made our provincial parks even more accessible for everyone. I encourage everyone to get out and enjoy our B.C. parks.

MINING DEVELOPMENT PROCESS

IN CARIBOO AREA

B. Simpson: The Cariboo region has an abundance of opportunities to expand mineral exploration and extraction as a means to offset any falldown in the economic activity resulting from the mountain pine beetle. Along with the expansion of Gibraltar and Mount Polley mines, opportunities exist for both new and expanded hard-rock and placer operations. Every mineral opportunity realized will create jobs and bring additional economic benefits to Cariboo communities.

In order to realize this potential, however, mining must adhere to three basic principles: minimal ecological footprint, respect for First Nations rights and title, and maximum economic and social return to British Columbians, who at the end of the day are the true owners of B.C.'s mineral resources.

The evolving relationship between Mount Polley mine and the Williams Lake Indian Band serves as an example of how companies can have productive relationships with First Nations. Spanish Mountain Gold provides another example. The government has also recently taken a leadership role in addressing the First Nations referral backlog in the Cariboo region by assigning a specific staff person to this function for placer operations.

However, the mining community has informed me

[ Page 12025 ]

that they still have permitting angst — that the permitting process is still understaffed and that economic opportunities in both mineral exploration and extraction are being lost as a result. The industry also has concerns about a growing skilled labour shortage and fears that without a plan to address this, more temporary foreign workers will need to be used, limiting the social and economic benefits local communities will receive from mining activity.

A final concern expressed to me by the mining community in the Cariboo is the increasing regulation and fees imposed on mineral exploration and on small and medium-sized placer operations.

As we celebrate Mining Week, my hope is that the government will ensure the issues and concerns that may prevent us from realizing the full potential of mining in the Cariboo region will be addressed in partnership with miners, First Nations and local communities.

R. Lee: May I seek leave to introduce a group of students?

Mr. Speaker: Proceed.

Introductions by Members

R. Lee: It gives me great pleasure to introduce a group of 31 grade 5 students and nine adults from Holy Cross Elementary School, led by Mrs. Sabina McCloskey. The school is one of the best schools in B.C. Would the House please help me give them a very warm welcome.

Oral Questions

COSTS TO B.C. OF

FEDERAL ANTI-CRIME LEGISLATION

A. Dix: On November 2 of last year I asked the Premier, in fact, what the cost impacts of the federal crime bill, C-10, would be on British Columbia. At the time she responded: "I am concerned about the costs. We do need to be."

At that time the government had — we know this through freedom of information — assessments of the costs made by public servants, assessments that they have, since then, hidden from the public and the Legislature.

I wonder if the Minister of Justice today can tell us what her government's estimate of the cost impacts of Bill C-10 are.

Hon. S. Bond: As we discussed in the Legislature yesterday, certainly as a government we have been very clear about our support. In fact, this government lobbied for some of the sections that are included in that bill.

[1400]

One of the things that we did when we met with ministers and Minister Nicholson directly was that we asked him if he would contemplate looking at the implementation dates of various sections of the bill. In fact, the work continues. We do not have final estimates, as I have said repeatedly in this House.

We were successful in working with Minister Nicholson to look at how the bill might be implemented so that provinces and territories are better able to manage with any — if there are any — pressures as a result of that bill.

Mr. Speaker: The Leader of the Opposition has a supplemental.

A. Dix: The minister will know that there was no discussion of this in the budget tabled by her colleague the Minister of Finance, and the minister will know that she had prepared, for her and for her colleagues, a document on November 3 that lays out, presumably, the government's own view of what the cost of the bill would be to taxpayers in British Columbia.

Could the minister explain why she doesn't share that information? Just share the information, the briefing note that she has. It has been requested by the media. It has been requested by British Columbians. It has been requested by the opposition. Why doesn't she share her best information with the people of B.C.?

Interjection.

Mr. Speaker: Member.

Hon. S. Bond: One of the things that I've said…. And I'm not defensive about that at all. I think that before we raise numbers, we need to be very sure of the actual impacts. It's not as simple as saying: "Bill C-10 equals this." In fact, crime rates are down in British Columbia. What we've seen in corrections capacity is that actually, the number of people in incarceration.... That number is dropping.

We are being careful, and we are being thorough. The fact of the matter is that where there may be some pressures — and we recognize there may be — is in corrections capacity. What we've done is…. We have the most aggressive plan ever in the history of this province to add corrections capacity. We're going to continue to do that.

I'm not going to simply indicate numbers that I don't think we can actually get to the bottom of until we know when the bill will be implemented, the sections, when we analyze the crime statistics, and when we look at what the legitimate impact of Bill C-10 might be.

Mr. Speaker: The Leader of the Opposition has a further supplemental.

A. Dix: The government in general — even this government — doesn't generally function to wait until costs

[ Page 12026 ]

occur and then estimate them afterwards. The government has in fact produced information on this. Surely, the Minister of Justice will agree, because we've seen the notes. They've just taken out the information. We see the headings, but they've taken out the information — right?

It seems reasonable to us. Everybody knows you can't be exact in assessing costs in advance. We were all there in the 2009 election campaign. But the reality is, I think, that what we might reasonably expect is to get access to this information as legislators. I think that's a reasonable view. The Minister of Finance himself has acknowledged that these are legitimate questions for us to ask.

Surely, if they're legitimate questions to ask, they're legitimate questions to answer.

Interjections.

Mr. Speaker: Members.

A. Dix: The minister and I are not entirely in sync today, but that's okay, so I'll just ask her.

I think it's a reasonable question. I'm not asking the minister to entirely and accurately and precisely predict. I am asking the minister to provide the best information that the government has on an important public policy issue in British Columbia.

Hon. S. Bond: I think one of the things that we actually believe is important is to be accurate and to be precise about the work that we are doing. We know this. We can't predict the crime rate. We know it's going down. We know that the number of people in incarceration in our facilities is dropping.

[1405]

We also know this, and I know that firsthand. We cannot predict sentencing patterns. We have no way to accurately assume how Bill C-10 will be translated, either on the street or in the courts. We're doing our work. We're going to continue to look at how all of those factors are contemplated.

In fact, we made progress with the federal minister by saying we need to make sure that provinces and territories — and British Columbia led that discussion — have the ability to have some time.

Minister Nicholson agreed with that and, in fact, is looking at how the bill will be implemented and working constructively with provinces to allow them to manage any potential challenges we may face.

K. Corrigan: I think this province is in a pretty sorry state if the minister and the government cannot provide any estimate, like both Ontario and Quebec have done.

I'm going to go back. The minister now says it is impossible to do, but we know that there was an estimate that was done in November. I'm going to talk specifically about that.

On January 25 the opposition received an FOI package on the matter of the federal crime bill costs. The package…

Interjection.

Mr. Speaker: Member.

Continue, Member.

K. Corrigan: …included a very heavily censored briefing note from November 3. Several months later a media outlet received a package on the same matter, and it also included the same briefing note. However, their version included key headings that say "predicted costs" — costs, British Columbia costs.

To the Justice Minister: it's time to be up front and honest with British Columbians. Will you just release the briefing document uncensored and also tell us how much we're on the hook for?

Hon. S. Bond: Well, I think it's very interesting that the member opposite's interest in incarceration seems to stop at her own border. Clearly, the member opposite was on record suggesting that that wouldn't happen in her backyard, so it's very interesting that today there is a new-found interest in incarceration.

Here's what we've done. We've already seen new cells put in place in Prince George. We are going to add 104 cells at Alouette Correctional Centre for Women, which will open in 2012; 216 cells at Surrey Pretrial Services, which will open in 2013. In fact, we recently announced an additional over 300 cells in the Okanagan to deal with any capacity issues that may exist.

Mr. Speaker: The member has a supplemental.

K. Corrigan: The minister can divert all she wants, but it is very clear this government generated an analysis as far back as November 3. Quebec said the bill was going to cost hundreds of millions of dollars. Ontario said it's going to be a billion dollars. But the B.C. Justice Minister is hiding the cost from British Columbians.

Again to the minister — a very simple question: will she release the briefing document uncensored, and will she tell British Columbians how much they're on the hook for?

Hon. S. Bond: If the member opposite had done the complete homework…. When Ontario actually suggested their $1 billion number, we might want to point out that the primary cost, the vast majority of that, was for one correctional facility. We're adding cells at Alouette, we're adding new cells in Surrey, and we're adding a brand-new facility in the Okanagan.

I want to assure the member opposite of this. We want to make sure that people who behave inappropriately

[ Page 12027 ]

with children, who deal in human trafficking.... We're prepared to make sure that we can pay for whatever pressures there may be. We're going to make sure that Bill C-10 is effectively working in British Columbia to ensure that people who commit those kinds of crimes do the time.

[1410]

PRIVATIZATION OF

LIQUOR DISTRIBUTION

S. Simpson: No leading industry groups that we can find were consulted on this liquor privatization before the announcement. We also can't find any industry groups who asked for this change or support it as good for their sector. They all believe that this is heading for the Alberta model, and as we've been told by group after group, that will lead to increased costs. The craft breweries have said they pay double in Alberta what they pay in British Columbia.

Jay Chambers, the head of the Liquor Distribution Branch, at the one May 9 briefing for industry when industry raised their concerns about costs and whether or not they would have any more say on this, said, "We're on a very tight timeline," so as a consequence, any proposals by the successful bidder, they won't be consulted on.

No consultation before the fact. No consultation on any proposals that'll come back in the RFP. No business case at all. My question is to the minister. Why has the minister shut industry out of this issue that they don't support?

Hon. R. Coleman: As the member knows, we're currently exploring ways to better manage liquor distribution and warehousing in British Columbia. There is an RFP on the streets. That RFP is going to come in with some bids. There was consultation with industry. Industry people were talked to before. There was actually a consultation meeting that the member actually referred to in his own question.

I said the other day — and I say it again — I don't know what you're afraid of. Even the BCGEU is working with us on this one. As a matter of fact, this may be an opportunity to modernize a warehouse and a system at a benefit to the taxpayer without having to pay millions and millions of dollars of government capital to accomplish the fact.

Mr. Speaker: The member has a supplemental.

S. Simpson: Industry doesn't support this proposal. The BCGEU doesn't support this proposal. They went to a briefing on May 9 where industry group after industry group asked questions about pricing and about costs and got no answers at all. That's not consultation.

The only value here…. You've got an inventory that you're going to sell anyways. You've got a piece of real estate. Other than that, the government has provided no evidence of a benefit to British Columbia or to consumers. Instead, you have an industry telling us that they fear a model that will double their costs for distribution.

My question to the minister is this. What is the economic advantage to British Columbians? What is the advantage to industry? Can you produce one single report that supports this foolish, foolish idea to privatize?

Hon. R. Coleman: The louder you yell, the worse the question comes out, hon. Member, so you might try a different attack.

The reality is this. Why don't you wait and see what the results of the RFP are? Maybe you'll find out that we'll save millions of dollars in not having to build a brand-new warehouse, and we'll find efficiencies in the system that will benefit all consumers in British Columbia. You can actually….

I know the socialist-communist thinking is that everything should be nationalized and controlled. If you had your way, you probably would nationalize mining, nationalize natural gas. You would nationalize everything, because you don't believe in the private sector. But we believe that the private sector may have solutions to improve this and save us money in the future.

[1415]

COMMUNITY LIVING SERVICES

AND CLIENT INTERACTION

WITH CRIMINAL JUSTICE SYSTEM

N. Simons: This government has spent pretty much the last year denying that there's a problem with CLBC. They later admitted that maybe it has lost its way, but it still hasn't got it right.

Derek Wiebe-Rosch is a developmentally disabled young man in the care and supervision of CLBC. That care has been declining over the last three years, just as his ability to participate in the community has declined.

In April he was charged with armed robbery in Kamloops, and he's now facing an uncertain future, possibly in jail. This government has failed Derek. Isn't it both socially and economically inappropriate for CLBC to rely on the justice system to deal with its failures?

Hon. S. Cadieux: Well, perhaps the member has missed the comments I've made over the last six or more months, because I have been very clear that there were indeed issues and that we as a government are absolutely committed to finding solutions to those issues. That's why we did the comprehensive review.

In January we released the deputy minister working group's report, which had a 12-point plan that we are committed to working through and addressing all of the issues in the plan. In fact, that's exactly why this govern-

[ Page 12028 ]

ment committed an additional $179 million over the next three years to support people with developmental disabilities.

Mr. Speaker: The member has a supplemental.

N. Simons: When a child is born with developmental disabilities, MCFD supports that child. When they turn 19 and transition into CLBC, their needs do not decrease. But under this government, it's business as usual — under-resourcing and over-relying on the justice system.

Derek is not the only young man facing this. The Representative for Children and Youth has pointed to other cases. In his case it wasn't of his own making.

Wouldn't the minister agree that it is time to do something real? Why should the developmentally disabled continue to pay for this government's incompetence?

Hon. S. Cadieux: I am a little surprised by the question from the member, seeing as how we met just the other day to discuss the progress we're making on the 12-point plan.

We absolutely recognize that there are challenges in the system. Some of those challenges are exactly what the member references. We have acknowledged that in that we need to do a better job of working across government and having a one-government approach.

Since January a cross-ministry team, interministry team — including the Ministries of Social Development, Children and Families; Health; Education; and Community Living British Columbia — have been working and continuing to work diligently to develop an integrated service delivery model for the future.

ACCESS TO WASHROOMS IN

INCOME ASSISTANCE OFFICES

M. Sather: Income assistance clients can wait for hours for service. Many are young mothers who bring their children with them. Yet at the Maple Ridge office public access to the washrooms is not allowed to clients. It's not as though there aren't any washrooms there.

The B.C. building code requires that public service buildings provide washrooms, yet the washrooms at the Maple Ridge office have been closed to the clients for a year.

To the Minister of Social Development, can she explain why this office won't allow income assistance clients the basic dignity of being able to use the washroom while they wait hours for service?

Hon. S. Cadieux: To the member, I thank him for bringing that issue to my attention. I'll look into it.

Mr. Speaker: The member has a supplemental.

M. Sather: I have, then, a question for the minister about policy. Is it government policy to refuse washrooms in government offices?

Hon. S. Cadieux: I believe I just answered that question. I'll look into it.

[1420]

COASTAL RESPONSE PLAN

FOR JAPANESE TSUNAMI DEBRIS

G. Coons: With each passing day, more debris from the Japanese tsunami is beginning to wash up on the coast of B.C. Last January the minister said he would begin working with national and municipal officials to get ready. Well, it's four months later, and local communities are still waiting. Regional districts are concerned about landfill issues and what to do with the debris that is being collected.

The mayor of Masset has called for a broader coordinated effort involving all levels of government. Robert Mills, chief councillor of the Skidegate Band, says the Haida's first concern right now is the debris.

To the minister: when is this Liberal government finally going to step in and work with local governments and First Nations to put forward a real plan to deal with the growing tsunami debris on our shores?

Hon. T. Lake: We have formed a joint advisory committee with the federal government. We are working with local governments. We are working with First Nations. We are working with the National Oceanic and Atmospheric Administration in the United States, along with our west coast partners in Washington State, Oregon and Alaska.

There is no doubt that this will pose a challenge for all of us living on the west coast. But we are actively planning. We are working with volunteer groups. Anyone who finds any tsunami debris can go to our webpage, Ministry of Environment, and can register the material. We do ask people to handle it sensitively, because some of that may have real importance to the victims in Japan.

We are coordinating that response, and we will be ready when the majority of that debris arrives on our shores in 2013.

Mr. Speaker: The member has a supplemental.

G. Coons: It appears that the minister's Tsunami Debris Coordinating Committee has failed to do any coordinating as such. An estimated 25 million tonnes of debris is headed for our coast, and it's already hitting our shores. In Washington State all levels of government and the community are working together to respond. Yet here in B.C. the draft meeting minutes from the March 19 Japan Tsunami Debris Coordinating Committee, which the min-

[ Page 12029 ]

ister talks about, noted that neither the terms of reference or the proposed organization structure was ready yet.

On Haida Gwaii last night Masset and Old Massett held a joint council meeting. Ken Rea, chief councillor of Old Massett, asked why the province still hasn't provided any direction. He has a quote: "What's the holdup? Why hasn't the minister begun coordinating with First Nations and coastal communities to start the cleanup process and deal with landfill issues?"

To the minister, will he get on the phone and start coordinating?

Hon. T. Lake: Well, we certainly have started those efforts. At a joint cabinet meeting in Washington State the Premier and the governor discussed this issue. I discussed it with the director of ecology, Mr. Ted Sturdevant. We are working with our Pacific Coast Collaborative members, as I've mentioned. We're working closely with the federal government and First Nations. I've discussed this with the Environment Minister nationally.

Despite what the member opposite may believe, we are coordinating this effort. We are working very closely with all of the members of our team, and we do realize that this will take a huge effort on the part of government and on the part of volunteers up and down the coast. But the sky is definitely not falling. We have time to prepare properly and responsibly. Anyone who finds any debris — I invite them to visit the Ministry of Environment webpage. They can register that debris at that e-mail address.

GOVERNMENT RESPONSE TO

CHANGES TO FEDERAL LEGISLATION

ON FISH HABITAT PROTECTION

R. Fleming: The clock is ticking on major Fisheries Act changes hidden away in the federal government's budget bill, Bill C-38. Many of Canada's core environmental legal protections are about to be lost. These are far-reaching changes that will impact British Columbia's environmental reviews and our protection regime. Yet we have heard almost nothing from this government.

When I asked the minister on previous occasions about how he plans to address these issues, he said he hadn't been consulted and wasn't even aware of the existence of the legislation. The federal budget bill is about to be passed.

[1425]

My question to the minister is this. Does he think it's acceptable for his federal counterparts to make major changes to federal fisheries legislation without consulting the provinces, without consulting fisheries organization, the scientific community and marine industries? And if he doesn't think that's good enough, will he finally speak up for British Columbia before this bill becomes law?

Hon. T. Lake: Well, the federal Fisheries Act has not been updated since the 1970s, and while I remember the '70s fondly, I would say that it's probably about time the Fisheries Act was updated to recognize the changing environment that we have today.

Some of the rules that we have in place force farmers in the Abbotsford and the Mission region and out in Chilliwack to have to treat their irrigation ditches as if these were critical fish habitat. These changes take a risk-based approach to managing fish habitat — a responsible approach.

We will see in the regulations the details of these changes. The federal officials have advised us that we will have plenty of opportunity for input before those regulations are developed. I can assure the member opposite that here in British Columbia, British Columbians expect the highest level of protection for the environment. That's what we will ensure.

Mr. Speaker: The member has a supplemental.

R. Fleming: The minister's answer is completely inadequate, and for this reason. We are going to lose a modern fisheries management model….

Interjections.

Mr. Speaker: Members. Members.

Continue, Member.

R. Fleming: We are going to lose a modern fisheries management model in Canada and in British Columbia and go back 40 years, to a single-species management model — the very same one that led to the Atlantic cod stocks collapse. That is what is at stake in the debate, and we have heard nothing from this government.

Organizations across the province of British Columbia have spoken out against these changes. We have 625 scientists who wrote the Prime Minister and this government expressing concern that the weakening of habitat protections in

section 35 of the Fisheries Act "will negatively impact water quality in fisheries across the country."

So before we go 40 years backwards, again to the minister: will he tell the people of British Columbia exactly how he plans to stand up for the interests of sustainability of B.C. fish and the thousands of jobs sustained by our fisheries in British Columbia?

Hon. T. Lake: As my friend the Minister of Finance is fond of saying, nothing should ever change in the NDP world. We understand that. But we actually believe that we should modernize our laws, and this is a modernization after 40 years — to take a risk-based approach, a commonsense-based approach to managing fish and fish habitat.

Interjections.

Mr. Speaker: Members. Members.

Continue, Minister.

[ Page 12030 ]

Hon. T. Lake: With the changes come greater compliance and enforcement activity. That's something we actually think is important.

We do have an opportunity for input. We also have the ability to regulate ourselves, in terms of fish and habitat. British Columbians expect the very highest level of environmental protection, but they also expect common sense. That's what they will get from this government.

[End of question period.]

Tabling Documents

Hon. J. Yap: In keeping with the Multiculturalism Act, it's my honour to table the 2010-2011 report on multiculturalism on behalf of the government of British Columbia.

Motions Without Notice

APPOINTMENT OF

SPECIAL COMMITTEE ON TIMBER SUPPLY

Hon. R. Coleman: Mr. Speaker, you'll notice the specs, because this is the font I'm getting on this one. It's rather lengthy. My age is showing through here.

[1430]

By leave, I move:

[that a Special Committee on Timber Supply be appointed to examine, inquire into and make recommendations with respect to mid-term timber supply for British Columbia resulting from the pine beetle epidemic-related loss of timber supply in the central interior, and to conduct consultations on this issue with the public and local governments, including communities and First Nations, by means the Special Committee considers appropriate, with a final report due August 15, 2012.

The Special Committee shall specifically consider:

1. Recommendations that could increase timber supply, including direction on the potential scope of changes to land use objectives, rate of cut and the conversion of volume based to area based tenures; and

2. Areas requiring change to legislation and/or other key implementation tools.

The above considerations should occur with due regard for the following:

• Fiscal commitment of the province to balance the budget and maintain competitive electricity rates;

• Maintaining high environmental standards and protection of critical habitat for species and key environmental values;

• Optimal health of communities and as orderly a transition as possible to post beetle cut levels;

• Maintaining a competitive forest industry;

• The existence of First Nations rights and claims of title; and

• The Softwood Lumber Agreement and other trade agreements.

The Special Committee so appointed shall have all the powers of a Select Standing Committee and is also empowered:

a. To appoint of their numbers, one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;

b. To sit during a period in which the House is adjourned, during the recess after prorogation until the next following Session and during any sitting of the House;

c. To adjourn from place to place as may be convenient;

d. To retain Jim Snetsinger and Larry Pedersen as technical advisors, and any other personnel as required to assist the Committee;

The said Special Committee shall report to the House no later than August 15, 2012 and shall deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, or at the next following session, the Chair shall present all reports to the Legislative Assembly.

The said Special Committee be composed of: Mr. Rustad (Convener); Ms. Barnett, Mr. Foster, Mr. Stewart, Mr. Bains, Mr. Macdonald, and Mr. B. Routley.]

Leave granted.

Motion approved.

APPOINTMENT OF SPECIAL COMMITTEE TO

APPOINT A CONFLICT OF INTEREST

COMMISSIONER AND MERIT COMMISSIONER

Hon. R. Coleman: By leave, I move:

[That a Special Committee be appointed to unanimously recommend to the Legislative Assembly the appointment of:

(1) a Conflict of Interest Commissioner pursuant to

section 14 of the Members' Conflict of Interest Act (RSBC 1996, c.287) ; and

(2) a Merit Commissioner pursuant to

section 5.01 of the Public Service Act (RSBC 1996, c.385) ;

and that the said Special Committee shall have the powers of a Select Standing Committee and in addition is empowered:

a) to appoint of their number, one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;

b) to sit during a period in which the House is adjourned, during the recess after prorogation until the next following Session and during any sitting of the House;

c) to adjourn from place to place as may be convenient; and

d) to retain such personnel as required to assist the Committee;

and shall report to the House as soon as possible, or following any adjournment, or at the next following Session, as the case may be; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly. The Committee may consider and report on items (1) and (2) concurrently or sequentially.

The said Special Committee is to be composed of Colin Hansen (Convener), Ron Cantelon, Joan McIntyre, Mable Elmore and Leonard Krog]

Leave granted.

Motion approved.

M. Elmore: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

M. Elmore: I'd like to welcome to the House today students from St. Andrew's School — 30 grade 4 students

[ Page 12031 ]

— accompanied by six adults and Mr. Adam Quan. I just ask everyone to make them welcome.

Hon. M. de Jong: Leave for an introduction, Mr. Speaker.

Mr. Speaker: Proceed.

Hon. M. de Jong: Two UBC students, pursuing their doctor of pharmacy degrees at UBC. They are doing a rotation through the Ministry of Health. The students are Celia Culley, a former resident of Prince George who previously worked as a community pharmacist in La Ronge, Saskatchewan, and Michelle Hinch, who was most recently a pharmacist at Vancouver General Hospital. I hope that the House would make both of these ladies welcome.

[1435]

Orders of the Day

Hon. R. Coleman: In this chamber this afternoon we will start second reading of Bill 54, intituled the Provincial Sales Tax Act, and — in my scope of being the eternal optimist — should that complete, we would then go to second reading, continued, of Bill 51, intituled South Coast British Columbia Transportation Authority Amendment Act, 2012.

In the Birch Committee Room we will be doing the estimates of the Ministry of Health. When that completes, we would then move to the Ministry of Justice and Attorney General.

In the Douglas Fir Committee Room this afternoon we will be doing committee stage of Bill 41, intituled Miscellaneous Statutes Amendment Act (No. 2), followed by committee stage of Bill 36, intituled School Amendment Act, followed by Bill 37, intituled Animal Health Act, and Bill 39, intituled Emergency Intervention Act.

For the information of the House, one minister may be under the weather, and we may have to switch a couple bills around, but I would advise the House in advance of that.

I have been reminded by the Clerk. Just so members understand the operation, the Government House Leader and the Opposition House Leader have agreed that divisions taken in the committee rooms would then be deferred to the House of the Whole. The membership of the House would be able to vote at the end of the day. So when division is called, it will be deferred to the House, and all members would be advised.

One other thing that we've agreed to, Mr. Speaker, in the spirit of cooperation: when we sit evenings and late, we will be taking a dinner, a half-hour break, between 6:30 and seven.

Second Reading of Bills

BILL 54 — PROVINCIAL SALES TAX ACT

Hon. K. Falcon: I move that Bill 54, the Provincial Sales Tax Act, 2012, be read a second time.

Mr. Speaker: Proceed.

[L. Reid in the chair.]

Hon. K. Falcon: Bill 54 implements the provincial sales tax. I would like to take a few moments to speak about the events that led us here today.

In the summer of 2011 British Columbians had the opportunity to participate in a provincewide referendum on the harmonized sales tax and voted to eliminate the HST and return to the PST-plus-GST system.

Clearly, I, along with many others, was disappointed in that result and would have preferred a different outcome. I genuinely believed, and still believe, that the HST would have enhanced British Columbia's competitiveness and led to long-term economic growth — something that is in the best interests of all British Columbians.

However, we respect the decision that was made by British Columbians, and we committed to them to make the transition back to the PST as quickly as responsibly possible. Bill 54 meets that commitment, and subject to the approval of this Legislature, the new provincial sales tax will be implemented, effective April 1, 2013.

The new provincial sales tax, or PST, will tax the same goods and services that were previously taxed under the Social Service Tax Act, the old PST act, and the Hotel Room Tax Act. The general PST tax rate will be 7 percent, and as I promised on August 26, 2011, all permanent PST exemptions will return.

The reimplementation of the PST is a huge project. Countless hours have been spent over the last several months by staff in both the Ministries of Finance and Justice to work towards meeting government's commitment to reimplement the PST.

[1440]

You may recall, Madam Speaker, the independent panel that reviewed the HST — which was chaired by a former Alberta Finance Minister and included among its distinguished panel members the former Auditor General of British Columbia George Morfitt — concluded that it would take 18 to 24 months to reinstate the PST. I am pleased to say that we are on target to complete the reinstatement of the PST at the low end of this timeframe, at 19 months.

There is still very much work to be done, both on regulations and legislative amendments, and on the systems and many other critical steps required to begin administrating the PST.

Some have asked: "Why does it take so long to bring

[ Page 12032 ]

back the PST? Why can't it just be done right away, bringing back the old PST act as it was, and why does it take longer to reimplement the PST than it did to implement the HST?"

Well, let's start with the fact that the old PST act was originally introduced over 60 years ago, in 1948. That was back in the day when we had Prime Minister Mackenzie King and when President Harry Truman was the president of the United States. That was when the old PST act was introduced in British Columbia.

Over the years successive governments have made many, many changes to the act, adding or removing exemptions, changing how various goods and services are taxed, implementing tax on new items and so on and so on. There were also a number of amendments to respond to legal challenges and changing business practices over the years.

During that time there have been seismic changes in technology since the old PST act was introduced, changes which continue to this very day. Telecommunications and software, for example, look far different today than they did even five or ten years ago.

All of those things led to the old PST act being a complex compilation of rules, regulations and requirements from many different eras. It was deficient, unclear and unwieldy, and sometimes totally incomprehensible, even to tax professionals.

The on-the-ground application of the PST, in other words what people were actually paying, often had to be based on administrative

interpretations, as the words in the legislation itself were not at all clear. Not being able to refer to the legislation and understand how it applied in their specific circumstances led to confusion and frustration for both taxpayers and businesses.

If we had reimplemented the old PST act without amendment, which certainly would have been a far less difficult and time-consuming task, at least from a legislative perspective, the confusion and the frustration would have continued. This is why I was so strongly in disagreement with the Leader of the Opposition, who advocated returning to the old PST as it was. Indeed, he wanted to have it implemented and said that he would have had it implemented by June 1 — in other words, a short two weeks from now.

Well, on this side of the House we believe that what people voted for was to go back to the PST they were paying, not to enact an outdated and archaic piece of legislation. So that's what we committed to do, and we are doing that with this new legislation.

The new PST Act implements a tax that applies to the same goods and services and provides for all the same permanent exemptions as the old PST and hotel room tax, but in a new, modern, clear and more comprehensive act. We also wanted to ensure that, to the extent possible within the time available, we made improvements to the new PST Act to reduce the overall compliance burden on business.

Changing a province's sales tax system isn't a quick or easy thing to do. It is very complex, perhaps the most complex undertaking for both business and government. There are a series of steps that need to be taken. In addition to rewriting provincial tax laws and regulations and developing and legislating the transitional rules, we need to rebuild our capacity to administer the PST.

Even when we implemented the HST, it took many, many months. With harmonization, British Columbia was really just eliminating one tax, the PST, and changing the rate of an existing tax that businesses were already familiar with. In most ways, the HST is just the GST at a higher rate, incorporating the PST. That was why for most people out there 80 percent of the purchases that they were involved in making did not change. It was still 12 percent — the 5 percent GST and the 7 percent PST.

[1445]

Reimplementing the PST, however, is much different. It is not just changing the rate of an existing tax. It is introducing a second, entirely separate tax for government to administer and for businesses to comply with.

Businesses, particularly small business, need time to prepare to comply with a second tax with its own set of rules and procedures that are separate from and, in fact, in addition to those that they have to follow under the GST. They have to readjust their accounting and administrative systems and prepare to collect a second sales tax.

By the time the transition is complete, about 30,000 new businesses in B.C. will have started up under the HST. They will have had had no prior experience dealing with the PST — ever. They will need time to learn to administer the PST and to understand what their obligations are with respect to the PST.

That is just a brief overview and explanation of some of the critical steps that have to be required to get to this point, and those that are still to come. But it is an important point, because as a government we have a responsibility — I would argue, a supreme responsibility — to act, not even in our collective political interest.

Many have pointed out how the April 1 introduction of the new PST may not be convenient for us politically, being as it is a couple of months away from an election. That is indeed true. But what this Finance Minister and this government will never do is put an artificial date in place that would mean we would risk the implementation being done in a smooth manner that would allow business the ability and the time to transition and government the ability to get back our administrative capacity to properly supervise, implement and administer the PST.

As I have mentioned, British Columbia's new provincial sales tax will be implemented effective April 1, 2013, and will tax the same goods and services that were taxed under the old PST. All of the permanent PST exemptions will also be implemented.

Madam Speaker, I would like to provide a brief overview of Bill 54, the Provincial Sales Tax Act, itself.

[ Page 12033 ]

Like the previous PST, the new PST is a retail sales tax that is payable when a taxable good or service is acquired for personal use or business use, unless a specific exemption applies. Bill 54 imposes tax on the purchase or lease of tangible personal property, or TPP, which is commonly referred to as goods. It also imposes a tax on goods brought, sent, delivered or used in B.C., on purchases of software and on certain services — accommodation; legal services; telecommunication services, including digital media, non-basic cable and non-residential telephone services; and services provided to goods.

This act also provides the legal authority for all exemptions from PST and refunds of PST. This is the case even where the specifics of an exemption or refund will be located in the regulations. Bill 54 also establishes the framework for the administration and enforcement of the PST and the appeal mechanisms that were generally in place under the previous Social Service Tax Act and the Hotel Room Tax Act and that are similar to administrative schemes established under other provincial taxation acts.

The Provincial Sales Tax Act also implements a number of taxes that were part of the old PST, including the $1.50-per-day passenger vehicle rental tax, the surtax of 1 to 3 percent on passenger vehicles with a purchase price of $55,000 and over, the multi-jurisdictional vehicle tax and the tax on energy products to raise revenue for the ICE fund.

In addition, Bill 54 makes consequential amendments to the Income Tax Act. With the elimination of the HST, the B.C. HST credit will also be eliminated. The final quarterly B.C. HST payment will be issued in January of 2013.

[1450]

Effective for 2013 and future tax years, the B.C. sales tax credit will be reimplemented and will have the same eligibility criteria and benefit calculation as existed prior to its replacement by the B.C. HST credit.

As part of the HST implementation, the basic personal amount tax credit was also increased. This enhancement will be reversed with the reimplementation of the PST on April 1, 2013, back to its original amount.

For the reasons I mentioned earlier, clarifying the legislation and improving administration for businesses, the format and structure of the Provincial Sales Tax Act is significantly different from the format and structure of the Social Service Tax Act. Among the clarifications are the updating and clarifying of the provisions for taxation of software and taxation of services performed to goods to reflect modern technology and provide greater certainty.

With the restructuring of the act, related provisions are now located together, to the extent possible, to improve readability by reducing the need for people to look at multiple sections of the act and regulations to determine the correct tax application — one of the great frustrations for small business, big business, all business under the previous PST.

I would also like to provide some information about the numerous regulations under the Provincial Sales Tax Act. While Bill 54 provides the legal authority for all exemptions from PST and refunds of PST, the regulations will contain the specifics and details of most PST exemptions and some refunds.

For example, as under the Social Service Tax Act, all specifics and details of the exemption for production machinery and equipment will be in regulations under the Provincial Sales Tax Act. Certain exemptions and refunds are included in the PST Act itself. The exemptions and refunds included in the PST Act are those which are generally more fundamental to the overall taxation system as a retail sales tax system — for example, exemptions for goods incorporated into goods for resale.

I would like to reiterate that all of the permanent PST exemptions and refunds will be implemented, regardless of where they were previously located in the old PST, in hotel room tax legislation and regulations.

Permanent exemptions include, among others, all food for human consumption — for example, basic groceries and prepared foods such as restaurant meals — most services, admissions and memberships, bicycles, books, newspapers and magazines, children's clothing and footwear, and all permanent PST exemptions for business.

The regulations will also contain many administrative and related requirements, including the requirements related to remittance and payment of tax, returns, commissions for businesses who collect and remit taxes required, documentation and recordkeeping requirements and others.

In addition to the PST legislation itself, returning to the PST system requires that we make numerous consequential and related amendments to other acts and regulations under various acts. The implementation of the new PST will require amendments to repeal the Hotel Room Tax Act and the Consumption Tax Rebate and Transition Act.

We will also be introducing consequential and related amendments to a number of other acts, including the Motor Fuel Tax Act, the Carbon Tax Act, the Tobacco Tax Act and many others. Amendments to treaty-related tax agreements with First Nations will also be required.

Bill 54 does not contain the consequential and related amendments to other acts, with the exception of the amendments to the Income Tax Act or the transitional rules. The housing transitional rules which were announced in February, with a detailed backgrounder, will be legislated in a separate, soon-to-be introduced act. As announced in Budget 2012, generally, PST will apply where a tax becomes payable on or after April 1, 2013. The general PST transition rules will include detailed rules for specific types of transactions, including goods brought, sent or delivered into B.C. and goods used in the improvement of real property.

In addition, we plan to make additional changes to

[ Page 12034 ]

the legislation to provide as much clarity and certainty to British Columbians as possible and to make further administrative improvements as time permits.

[1455]

The consequential amendments, transitional rules and other amendments will be legislated at a later date, prior to the implementation of the PST on April 1, 2013. To provide greater certainty for businesses preparing for the transition, we plan to publicly release a proposed final version of the PST legislation, which includes the transitional and other amendments, this fall.

While we are continuing to look at ways to improve the PST legislation and administration, I'm pleased to report that we are making a number of improvements to the PST with this bill. The intent of the improvements and changes we are making is to reduce the administrative and compliance burden on businesses by making it easier for businesses to collect and remit tax on sales and leases.

Compared to the old PST legislation, the new PST legislation provides greater certainty about what is taxable, when tax is payable, and when tax is to be levied and collected. The improvements will also help to streamline administration for both business and government.

Under the old PST system, accommodation was taxed under a separate tax statute, the Hotel Room Tax Act. Now the tax on short-term accommodation is included in the new PST Act, and the separate Hotel Room Tax Act will be repealed. The tax rate will remain at 8 percent, the same rate as prior to the HST.

The integration of the tax on accommodation into the new PST Act will reduce the compliance burden on the hotel operators who also had to collect the old PST. Therefore, they had to deal with two separate acts, two separate paperwork requirements, two separate remittance requirements, etc. This integration results in these businesses now having one registration requirement instead of two and one less return to file.

As announced in Budget 2012, the tax on private sales of vehicles, boats and aircraft will continue at a rate of 12 percent to ensure similar tax treatment between private sales and sales by GST-registered businesses. To simplify administration and compliance, similar to the tax on short-term accommodation, these transactions will be taxed under the new PST Act rather than under a separate act.

We also made changes and clarifications to close loopholes and address tax avoidance to ensure that taxpayers are treated fairly and equitably. One such change is that — to close the loophole which was unfair to those taxpayers who properly paid tax and to reduce the potential for significant tax avoidance — gifts of vehicles, boats and aircraft provided in B.C. will be treated the same as those from out of province.

Under the old PST, transfers of vehicles, boats and aircraft were subject to tax if any money or other consideration was provided. Unfortunately, to avoid paying tax, people often claimed that an item was provided as a gift rather than purchased.

There will be an exemption where the donor previously paid tax and the gift is from a family member or an inheritance, prize or donation to a registered charity. This is generally consistent with the treatment of gifts in other provinces across the country.

Another improvement to the PST Act is that it provides broad legal authority for businesses to refund or credit tax directly to their customers in a range of circumstances. Previously this ability was very limited. The new PST Act also provides authority for businesses to deduct refunds provided to their customers from their tax remittances, streamlining the process dramatically.

I'm not saying that the new PST Act is "simple" or that the legislation itself is short or even totally streamlined. Tax acts by their very nature are complex and detailed. However, significant efforts have been made to improve the readability, clarity and certainty provided by the new PST Act, especially when compared to the old PST act.

We also plan to provide further improvements with the regulations. One of these planned improvements is the extension of the due date for tax returns on sales and leases filed by businesses — from 23 days after the last day of the reporting period, which was the requirement under the old PST, to the last day of the month following the reporting period. This will provide increased consistency with the GST due dates, easing the compliance burden, again, for businesses.

[1500]

As I mentioned earlier, changing sales tax systems is an incredibly large and complex undertaking. While there is still much to be done, I would like to recognize the significant achievement this act represents and the incredible amount of work, time and expertise put into this project by staff at the ministries of both Finance and Justice.

It is truly a testament to the professionalism and competence of our professional public service that they have achieved so much in such a tight time frame, and I really want this House to understand and recognize that contribution.

Finally, I would like to put all this into perspective. We know that keeping taxes low is an essential part of maintaining a competitive tax environment that will attract investment, create jobs, and build confidence and certainty. In British Columbia, as you know, our general corporate income tax rate is among the lowest of the G7 group of countries. That is the largest group of trading economies that B.C. typically trades with. B.C. has one of the lowest small business corporate income tax rates in Canada.

We have provided reductions over the last decade of about 40 percent on average in our general corporate and small business tax rates in British Columbia. B.C. families and individuals generally have one of the lowest overall tax burdens in the country of Canada.

[ Page 12035 ]

While the return to the PST system does reduce revenues, and it does create challenges for governments — any government, this one and future governments — we remain committed to balancing the budget in 2013-14 through continued fiscal discipline.

If there is any message that we have seen from what is taking place around the world in this time of great global uncertainty, it is that those governments that have not paid attention to maintaining fiscal discipline, that have not had the fortitude to say no….

Whether it was to providing wage increases they couldn't afford to their public service or whether it was providing tax breaks that they couldn't afford to finance or whether it was making investments that they couldn't afford and were borrowing dollars to make all of those investments, all of that has created a situation where today around the world we see governments reaping the whirlwind for not having that kind of discipline.

Whether it's Italy or Spain or Greece or Portugal or Ireland or even some of the great nations, the United Kingdom and France, they still suffer under a major burden of 75 to 80 percent debt-to-GDP ratios, meaning that their debt in relation to the size of their overall economy is at a level that is extremely worrisome in terms of their ability to pay it.

Here in British Columbia we can be so proud of the fact that we have one of the lowest debt-to-GDP ratios in the world. We will peak at 18 percent. [Applause.] Thank you.

The three credit-rating agencies, the major credit-rating agencies, have recently reaffirmed B.C.'s triple-A credit rating. They reaffirmed it after providing us seven successive credit-rating upgrades over the last decade, reflecting and sending a powerful message to investors around the world who are looking for stability and certainty in an uncertain world. That is a great strength that we have as British Columbians, a great advantage that we have that so many other jurisdictions do not enjoy today.

New investment will be the key. It will be the key to protecting and creating jobs in every region of the province of British Columbia — which, in turn, supports the public services that all British Columbians expect and want to see.

While the PST, in all candour, doesn't come anywhere close to providing the same benefits as the HST with respect to B.C.'s economy and for B.C.'s business community, British Columbia continues to have a very competitive tax environment, and British Columbia continues to be a great place to live, to work, to build a business, to start a family, to raise a family and to build a future.

With that, I conclude my remarks.

[1505]

B. Ralston: I'd like to begin my remarks by reflecting a bit on some of the arguments and some of the history that have taken place during the course of the debate on the HST, which has really convulsed the province and introduced economic uncertainty since it first became public back in July of 2009.

I think it's important to do that. The sense one gets from the minister…. He expressed it very graphically the other day. In response to a reporter's question, and he was asked if the PST is still a stupid tax, he said: "Yes, but better stupid." I think that's a serious problem, and I think perhaps the minister might regret having said that, and here's why.

This debate took place over a number of years. There's very full debate. The government certainly deployed a lot of government resources, spent millions of dollars on advertising, rejigged the HST tax — or proposed to rejig it — and yet the result was a very decisive rejection by the citizens of British Columbia.

To use that kind of language…. I understand that the minister is committed to his position and doubtlessly frustrated — and I think he's pretty well said as much — that the electors of B.C. didn't agree with him. Be that as it may, I think it's important, in a democracy where this kind of huge sweeping public debate took place, to exhibit, as a quality of leadership, a respect for the verdict of the people of the province.

I'm not sure. Perhaps the minister's statement was inadvertent, perhaps off the cuff, but I'm not sure it exhibits the kind of respect that one would wish for. I think that's a bit troubling.

Let me take as my text for today the words of another Finance Minister, a different Finance Minister from this one, the former B.C. Liberal Finance Minister Carole Taylor, who presided over, as we are aware, a number of surplus budgets and who left shortly before the 2009 election. I think her last day as an MLA coincided with the end of the calendar year of 2008.

She was interviewed on April 22, 2010, as a guest on a CTV news program, and she said this about the HST.

"One is, of course, that no one likes new taxes. This particular tax takes the tax off of businesses — it takes $1.8 billion off of businesses — and puts it on consumers. That shift is a shift that is ideological as well as factual.

"So many people will be paying a 7 percent increase on a lot of services and consumer goods, so there's a really strong reaction against that. But I think the bigger issue is that just before the election he promised that they would not, that they would not" — she repeated it twice — "do the harmonization of the sales tax, then right after the election decided to do it."

The sense that we have from the debate is that somehow a brilliant policy initiative was thwarted by the failure of the public to understand that brilliance, that quality of tax policy that was being brought forward in the debate. I don't think that's the case at all. I think that is why it's useful to reflect upon the words of a former Finance Minister, a B.C. Liberal Finance Minister, who sat around the cabinet table with the present Finance Minister for a period of time. That was her considered judgment, offered publicly on a national television news program.

[ Page 12036 ]

Looking at what she said, "That shift is a shift that is ideological as well as factual," I think that is key. Doubtlessly, the minister, as the Minister of Finance and the person who led the campaign…. Although the Premier certainly supported it, but she did not take a leading role for reasons perhaps strategic, perhaps best known to herself. I'm not sure.

[1510]

This Minister of Finance led the campaign to convince the public of the wisdom of the HST, even the new recontoured HST. When we look back…. I think it's important to reflect on the referendum results. Notwithstanding all of the government firepower — the ads that were purchased, the campaign, the town halls, the effort to pressure and persuade people that was provincewide in a very intense way — the public in the referendum result announced on August 26, 2011, decisively rejected the HST.

The question, as many will recall, was: "Are you in favour of extinguishing the HST, harmonized sales tax, and reinstating the PST, provincial sales tax, in conjunction with the GST, goods and services tax?" Yes or no. The provincial results was yes, 54.73 percent, and no, 45.27 percent. That's a fairly clear rejection.

I think the media rounded that up to 55 percent to 45 percent. A ten-point margin in electoral terms is a huge chasm. That's a fairly decisive result, particularly in British Columbia, where historically general elections are often decided by a redistributed several thousand votes that might have made the difference.

It's also significant — and this is something that I think should be reflected upon and perhaps more contritely approached — that in a number of ridings held by Liberals, the result was a decisive rejection of the HST. I think that's important to note, just given the rationale that's being put forward and the reluctance to embrace the referendum result that has led to the bill that is before us, Bill 54, which will reinstate the PST in accordance with the direction given by the people of the province.

Let's look at a few of those results, just to emphasize the point that this was not a fracture that occurred along necessarily party lines in many ridings.

For example, in Boundary-Similkameen the vote in favour of getting rid of the HST was 59.48 percent; Burnaby-Lougheed, 58.77 percent; Burnaby North, 60.34 percent; Cariboo-Chilcotin, 56.9 percent; Coquitlam–Burke Mountain, 55.85 percent; Kamloops–North Thompson, 54.73 percent; Maple Ridge–Mission, 55.8 percent; Parksville-Qualicum, 51.57 percent; Peace River South, 58.82 percent. And it's significant there that the member who was a member of cabinet resigned at one point from cabinet to protest the imposition of the tax.

Prince George–Mackenzie, 56.92 percent; Prince George–Valemount, 58.73 percent; Vancouver-Langara, 61.65 percent; Surrey-Tynehead, 59.47 percent; Surrey-Panorama, 53.33 percent.

Interjection.

B. Ralston: Well, the minister asks about his own riding. I can give him the result for his riding — 47.55 percent in favour of extinguishing, 52.45 percent rejecting that. In my riding, Surrey-Whalley, another riding in Surrey, 68.88 percent in favour of rejecting it, going as high as in Surrey–Green Timbers, 75.51 percent; Surrey-Newton, 72.22 percent; and Surrey-Panorama, 53.33 percent.

Deputy Speaker: Member, if I might bring you back to the contents of the bill.

B. Ralston: Thank you. Well, I appreciate you bringing me to heel at this point, because I'd finished reciting those numbers. The reason I recited them, Madam Speaker, is that this debate that took place was not a debate that divided along the traditional party lines.

[1515]

Indeed, all the constituencies I've cited, with the exception of those in Surrey — just for context for the minister because he represents a Surrey riding, Surrey-Cloverdale — were Liberal seats. Not only was the HST rejected in NDP-held ridings; it was strongly rejected in a number of Liberal ridings.

I think the minister, at his peril, really fails to accept the verdict of the people on this referendum, an unusual seismic event in B.C. political history. Frankly, I don't think we're well served by that approach. But he's entitled to his opinion. I'm sure he's certainly rejected my advice on occasion before, and he continues to do that.

What we now see in the debate and the direction that the debate has evolved, which was reflected in the speech that the minister just made, is that what is attempted to be portrayed in recasting the political history of this is that it was a debate between the wisdom and brilliance of the tax policy that would have continued the HST and the much inferior PST. But in fact, that wasn't the motivation for introducing the HST at all.

The political arguments and the economic arguments in support of the HST were only constructed after the fact. I think it's important at this juncture — when we're discussing Bill 54 and reflecting on how we got here and why this bill is before the House and why the minister has characterized it in the way that he has — to think back and look at a little bit of the political history surrounding the events that led to this.

I was reviewing a speech in preparation for this one, a speech that I'd made previously upon the introduction of the HST legislation. I won't go into that level of detail, but I think it is worth reflecting upon, in a

summary form at this point, the events that led to the HST in reality as opposed to the afterthoughts and the after-constructed economic arguments.

It was very clear, when you looked at it and questioned

[ Page 12037 ]

ministers and even the Minister of Finance of the day — not this minister, but a previous Minister of Finance — that little effort had been made to analyze the effects of the HST. In many respects its benefits were exaggerated or misunderstood.

Certainly, the introduction and the implementation of the policy was deeply flawed. I think all observers agree on that now in hindsight. But the motivation was to deal with the issue that arose during the election campaign in 2009 in dealing with the deficit.

The Premier famously said publicly that the deficit would be $495 million maximum. It became very apparent, if he didn't know it at the time…. Many suspect that he might well have reason to know it at the time, but that's probably not an issue worth pursuing now in hindsight. It was very clear immediately after the election that the deficit was going to be much greater.

One senses from listening to the members opposite on many issues that the neural channels were hard-wired back to their experience in opposition in the 1990s and remembered in a way that perhaps was very painful. They were acutely aware that they had made a very huge political issue out of alleged deficits in government finance in the 1990s, although in the year 2003 they presided over the biggest deficit in the history of the province and in 2004 the second-biggest deficit in the history of the province.

[1520]

Deputy Speaker: Member, you're returning to the contents of the bill.

B. Ralston: Yes, I am. Thank you, Madam Speaker.

The issue then became: how did we get to the point where this debate took place and this bill resulted, Bill 54, which is now before us? How did we get to that place?

What the introduction of the HST was in response to was not to improve the tax system, not to bring about the benefits of more competent administration or simpler administration. That could have been attempted in a way that…. Some of the changes that the minister spoke of — certainly, the administrative changes — were open to the government to bring to the PST at any point.

I'll reflect a little bit further in my remarks upon the administrative changes that I support, the new administrative changes that are bought about here, such as the on-line filing that the minister has referred to. There are some submissions by the B.C. Business Council, who have suggested some changes. Some of them look like they're reflected in the legislation; many are not, particularly in relation to audits and appeals.

Certainly, there were genuine issues in relation to the administration of the act, but those could have been dealt with as administrative changes at any point without the necessity of deep-sixing or shelving the PST and moving to the HST.

The real reason why, and the minister of the day essentially admitted it, was because of the concern about the deepening deficit that hadn't been disclosed during the election campaign. The $1.6 billion in transition money was essential to the budget planning in the years going forward.

The secondary consideration was the merit, the policy merit, of the HST system. That became very evident in the debate that followed in the fall of 2009 and into 2010.

So when the minister now attempts to cast, in his speech that he just gave in support of Bill 54, the alternative of an inferior PST and a superior HST, that wasn't the motivation for bringing the legislation forward in the first place, although it was the subsequent reason given for pursuing it in the face of the political firestorm that ensued. Most of that was constructed after the fact.

It's noteworthy, and the reason that I quoted the former Finance Minister, that the motivation was, as the former Finance Minister expressed, as much ideological as factual. In some cases the way in which it was pursued and the attempts to support that legislation were not supported by analytical studies of the legislation and, indeed, the economic detriment, notwithstanding some of the comments from some of the business community.

My sense is that much of the frustration that comes from the business community is less directed at the structure of the tax, although there are those who claim…. Certainly, the input tax credits were welcomed by some sectors of business. But much of the frustration with the PST was in the way in which it was administered, and it's become clear that it is possible to reform the PST in a much more sweeping way.

This political process has necessitated and given the opportunity for that necessary work to be done in a way that I think will go some way towards relieving some of the concern that particularly small business has had with the tax and administering it.

[1525]

Some of the arguments that were made to support, in the course of the campaign and the lengthy debate that ensued, simply weren't borne out by the facts. There was, I recall, a report by the C.D. Howe Institute, which one of the authors of the subsequent report authored — Mr. Mintz from University of Calgary.

What that report did was, using a simulation model of the Ontario economy, model the impact of an HST on the Ontario economy. What it said, what it found was that…. In the simulation model the usual inputs were put in and simulated the effect of that tax on the economy. The number of jobs created by the HST in Ontario in that model steadily diminished for five years and didn't recover to the same level as it was when the tax was initiated for ten full years.

Mr. Mintz later didn't want to follow that report when he was commissioned to do a report for the government of British Columbia, but an objective analysis of that re-

[ Page 12038 ]

port would have given, I think, a prudent Minister of Finance some pause before introducing it.

Certainly, there were very few, if any, studies done by the British Columbia government. Those were subject to freedom of information. Relatively, that was one of them that was cited, and another one by Michael Smart was cited.

So the intellectual arguments in favour of the HST were unresearched and weak, and that wasn't surprising, because the motivation for bringing the legislation forward was to deal with the issue of the deficit, which had arisen in the election campaign of 2009. That was the primary reason for agreeing to enter into an HST agreement with the federal government.

Indeed, Mr. Smart in his study looked at a study of what took place in the Maritimes and noted that that was accompanied by a reduction in retail sales tax in some provinces by three points and in one by four points. He said that the tax was mildly regressive, that the investment effects were temporary and transitory, and he wasn't able to assess the long-term impact of the benefits of the tax because that was outside of his ability and his range of terms of reference in the study. Yet that was a study that was used by the then Minister of Finance in support of his position.

I suppose what is significant here — and the minister, I think, has acknowledged this in part — is that while clearly the PST is not his preferred option, the economic effects on the province of British Columbia will not be as drastic nor as apocalyptic as perhaps some of the statements made during the referendum campaign were. That's probably not surprising, because in the course of a campaign one does tend to, I think, accentuate the difference, mount on rhetorical stallions and head out to do battle. The reality probably is somewhat less than that.

I'm sure the minister, when he has a chance to close debate, may want to respond. Maybe that wasn't what he was saying, but that's certainly what I took him to be saying, in particular.

I would say, just in defence of the return and perhaps to reduce the minister's concern about returning to the PST, there was a report done for Manitoba Finance back in 2009. There was a debate in Manitoba, because they were engaged in the same process to some extent, although they didn't have the same budgetary pressures, about whether to move to the HST. The federal government was offering these substantial cash inducements to encourage provinces to take part and transition to the HST.

[1530]

[D. Horne in the chair.]

Queen's University economist Robin Boadway, the David Chadwick Smith Chair in Economics, said that METRs — that is, marginally effective tax rate — analysis "captures the effect of taxation in one margin alone, and that is the decision to invest in some capital assets. They do not capture the incentive for firms to hire labour, including the substitution of labour for capital; to innovate; to invest in knowledge; to train workers; or to engage in risky enterprises…. METRs also do not differentiate among industries according to their capital intensity and, therefore, according to the magnitude of the distortions that might occur."

Certainly, part of the argument advanced by the minister and part of, perhaps, the frustration that led to his outburst is an acceptance of some of the arguments that the marginal effective rate of taxation is the measure, the only measure — the only effective measure — of taxation. What this very distinguished economist says is that it's important to look elsewhere.

In moving back in Bill 54 to a PST, I think it's appropriate to place some of the previous debate in context. The ultimate decision in Manitoba was not to move to an HST. Another reason they were concerned was that an introduction of an HST would have had a detrimental effect, a shock to consumer confidence, and they weren't prepared to run that risk.

They also looked at Michael Smart's, the same argument that was referred to repeatedly over the last several years, and agreed with the view that I put forward. "These results, though empirical, should be interpreted cautiously because the adoption of HST in Atlantic Canada entailed not only a shift in tax bases but a significant reduction in the average provincial sales tax from 12 percent to 8 percent."

Manitoba also looked at the KPMG annual survey that reports on tax competitiveness and found that virtually all Canadian cities, regardless of the tax regime, are very competitive in North America. Particularly, in Manitoba they looked at the tax competitiveness of their manufacturing industries, and they found that the introduction of an HST, in their analysis, would only improve their tax competitiveness by 1/10 of 1 percent and that the relative ranking would not change. The Manitoba report concludes that Manitoba and B.C. already enjoy very competitive tax rates as it is now without the implementation of the HST.

In response to what the minister has said about advancing the view that the tax regime of the PST is decidedly inferior, there is another climate of opinion that would tend to disagree. I think some very careful, considered arguments would suggest that the disadvantage that he speaks of is not the one that he suggests.

Perhaps, going forward, in order to better position British Columbia…. I think that's what he was doing in the conclusion of his speech, saying that with all of the advantages that British Columbia has — whether it's the advantages of its natural resources, its hard-working entrepreneurs, its skilled and trained labour….

[ Page 12039 ]

Interjection.

B. Ralston: I am the designated speaker, so I propose to continue along slightly further. We shall see how far I go, but I thank the Speaker for that acknowledgment.

[1535]

I think it's important to look forward in a more positive light — not back wistfully and with regret about a debate that has taken place and is now over — and, I think, recognize that, notwithstanding some of the elegant formulations of people like Mr. Mintz, the reality may be somewhat different in that we're in British Columbia and not in such a difficult position in terms of tax competitiveness.

I appreciate, in general, the arguments about tax competitiveness. The KPMG report, for example, compares the cost of doing business in Vancouver and, say, San Diego in California. What is significant in terms of hiring employees is that it's much more expensive to hire employees in the United States. One, because the statutory deductions, the equivalent of Canada Pension Plan and Unemployment Insurance in Canadian law, max out at a much lower salary than they do in the United States.

Secondly, the cost of private health care for ordinary people in the tax range of, say, $60,000 to $125,000 net annual income is dramatically more than here. Certainly, that's one of the clear economic advantages of public health care, notwithstanding the cost pressures on the public system here. Those are pressures.

So the KPMG study, in terms of tax competitiveness for hiring new employees, as a business that would be establishing itself in British Columbia, suggests that British Columbia, in contrast to most American jurisdictions, has a decided advantage.

I think that's the context that the minister was setting in terms of his comments about the tax environment. I think it's important to also look at those tax advantages that accrue to us as Canadian citizens, as British Columbian citizens, with a public health care system.

The other comments I want to make about the bill are perhaps a little bit more focused and less general. I do want to reflect upon a couple of measures that have been introduced in this bill, Bill 54. One aspect that's included in the bill is the intention in the legislation…. And we'll explore this in committee, should we get there. I'm not sure that in the five days or 5½ days that remain we will.

It's the issue of used vehicles. I've received representations, and I'm sure the minister has, from people who, for example, collect antique and vintage cars. That's a part of a market of used-car sales. People are now…. The 12 percent tax, the total of the combination of the GST and the PST on used vehicles, will be what it was under the previous tax regime. Those people are making representations to me that they see that as unfair. When the time comes, if we get to committee, certainly I'd like to explore that further with the minister and glean the explanation for continuing with that.

Certainly, there's another argument that would suggest that a level playing field with the purchase of new cars is an important one. I certainly understand the revenue implications of that tax. In continuing it on used cars, the revenue expectation is, I believe, $135 million a year. I'm not sure exactly of the number. So there is a revenue consequence to that.

I think that's an issue that the public is raising, at least with me, and I'm sure the minister is hearing the same thing. So I would be interested in exploring the rationale for doing it this way and, perhaps, any fine-tuning that might be done of the implementation of that particular aspect of the tax. I believe, if I have the

section correctly, it's near the beginning of the bill. I don't have the exact

section there. Nonetheless, that is the effect of the legislation.

[1540]

The second area that I want to address is that the minister has spoken of permanent exemptions being incorporated into the regulations that are to come, but temporary exemptions will not be incorporated into those regulations.

One recalls the great fanfare around the so-called green budget, which was one of the budgets steered through the House by the former Minister of Finance, Carole Taylor. There were a number of exemptions, obviously intended as incentives for citizens to purchase Energy Star appliances. Those all seem to have disappeared. That's a decision that the government has obviously made, and perhaps that reflects a revenue component because those exemptions do cost in terms of tax expenditure.

The only thing I would note is that the option under the PST regime is that in the future those options would be open again. What was very clear under the HST was that the list of exemptions was negotiated — a maximum of 5 percent of the tax base. There were a few exemptions agreed to — children's-sized clothes, I believe — but largely, it was consumed by gasoline.

Given that, I think the calculation was, the carbon tax had recently been imposed, the government was reluctant to impose yet another tax on gasoline. The total of those…. And that consumed most of the 5 percent, but the range for exemptions was a limited one.

Now, the argument is made that it's better to have a broad and lower tax rather than honeycomb it with a series of exemptions. Indeed, that's the suggestion that's made by those who oppose the PST. But I would say that, at least as a public policy alternative, if there is an exemption that seems very important — there's broad public support for it; the revenue consequences are manageable — then that option is at least open,

whereas under the HST regime it was not. So that, I think, is an advantage to proceeding in this way.

Certainly, one of the exemptions — which dates back to the 1980s, I think, to Finance Minister Hugh Curtis

[ Page 12040 ]

— is the PST exemption on the purchase of bicycles. The minister has said that that, as a permanent exemption, will be reinstated. That is obviously welcome and good news for those who want to purchase bicycles without paying quite as much as they would otherwise.

That's an example of a public policy consideration that can be used. I know the minister is a keen bicyclist. I'm sure that that's not the motivation for this but rather the fact that it existed back from the 1980s forward. So this bill and this provincial sales tax regime do give that opportunity and that flexibility.

The other area that I wanted to look at, and the minister mentioned this, was the attempt to — and I've spoken of this briefly before — provide for better administration of the act. Certainly, the move to on-line submission of the returns is good.

I know in my business life, running my law firm years ago, the process of filing and mailing in those reports along with the required cheque was always something that had to be attended to fairly carefully. If you missed the deadline by one day, there was a penalty of 25 percent of the total tax that you hadn't paid. Certainly, it was an incentive to make sure you didn't miss the deadline. But submitting them electronically, I think — providing that the system is simple and accessible — will be an advantage.

[1545]

The B.C. Business Council also did make some suggestions. The minister and I have run through this list in estimates, but I think, just for the purposes of this debate, I'd like to speak a little bit more about it. The recommendations were…. I want to say that for the most

part I support these recommendations. I think they are.… But not all of them are reflected in the legislation that's been tabled.

The B.C. Business…. This was their submission to the Select Standing Committee on Finance and Government Services October 14, 2011, so back last fall. They obviously have a point of view on the PST. But what they did say…. Given that it is coming back, they recommended the following administrative improvements.

"We recommend that the province clarify the rules for scope of application of the PST and eligibility for exemptions, with a view to minimizing future disputes over

interpretation." Now, that seems to be the intention of what the minister has said, and that's the claim that he's made. Sometimes that's difficult to assess without looking at the individual sections, but I think if that's the intention, that's the right intention.

He suggests, to continue with the list here, a review: "Revise the statute of limitations for assessments for prior tax years, from four years to three." I'm not sure that that has been done, and there's an obvious reason.

Just as the House had a debate on reducing the ultimate limitation period for litigation — in other words, how long it is that, theoretically, someone could launch a lawsuit against you for doing something wrong — this would limit the number of years that the tax authority could reach back to reassess you. It's not that there would be no ability to reach back. But to limit that by one year — that was their suggestion.

Further continuing with the list: "Adopt risk-based approaches to audits, using sampling techniques, in order to improve returns on investment in terms of incremental revenue potential versus costs." I think the suggestion there is a much more targeted and businesslike approach to audits.

In other words, by using sampling, focused sampling, rather than going…. They would be scientific in terms of auditing purchases or in order to calculate what should have been remitted as opposed to what actually was. To sample, rather than audit every single sales receipt or sales transaction, might be a more effective way.

Also, I think by "risk-based approaches" they mean: to have some assessment of the industry or business that is being audited, given that there are different, I suppose, audit experiences and audit histories in different sectors of the economy. I suppose it's depending on the complexity of the business or the history of that sector in terms of compliance.

It also suggests — I'm continuing with the list: "Encourage negotiation in audits, as is done federally and in other provinces, to lessen the need for litigation." From what I've been told, and their observation is, the process that was in place in the past was a rigid process that encouraged litigation, not negotiation. And that, I think, is a welcome suggestion.

"Enact legislation prescribing maximum time frames for appeals to provide greater certainty as to when business can seek legal remedies." That is something that I think speaks for itself with the good timelines. Again, the direction that's suggested seems to agree with that, but I'm not sure of the specific section.

Certainly, the next

section is something that I've confirmed doesn't appear in the legislation, and that's in

section 211. If I might just confirm. Yes, that's the

part 10, the appeals section. It is entitled "Appeal to minister."

[1550]

What the B.C. Business Council suggests is that the minister "remove the minister from the appeal process and direct appeals instead to a commission or appeals branch, as is done in Manitoba, Saskatchewan, P.E.I. and Ontario" — and there's a parenthesis — "prior to the latter's adoption of the HST in 2010."

Again, they're suggesting that as an administrative enhancement to the administration of the appeals process, if there's an appeal of an assessment. That doesn't appear to have been followed. This section, in my quick study of this over the last day or so, appears to simply repeat the process that was in the old Social Service Tax Act. Perhaps that's something that, upon consideration and if we have time for amendments, the minister might want to look at.

[ Page 12041 ]

Finally, in this

section of suggestions from the Business Council, they say to "examine opportunities to avoid duplication with the federal government by determining whether it is feasible to devolve administration of the PST to the Canada Revenue Agency on B.C.'s behalf."

Indeed, that is in fact a position that I have publicly spoken about. In a strange combination, the member for Kamloops–South Thompson and I have both agreed on this and separately made representations, either publicly or to the Minister of Finance. The word that came back was that the Canada Revenue Agency and the federal government were not willing to accept this as a solution.

Canada Revenue Agency, for example, collects and administers British Columbia corporate tax, and they administer a number of other provincial programs. Given that under the HST they were already doing it, it seemed logical to the bipartisan informal committee, I suppose, of myself and the member for Kamloops–South Thompson to make that approach. But for its own reasons, the federal government decided that they don't wish to make that a possibility. That suggestion has been canvassed and rejected because it's not possible to do.

The other suggestion they make is to look at the administration of some of the exemptions which will be coming back, particularly the production machinery and equipment exemption. Early in 2001 the B.C. Liberals, near their first budget or perhaps their second, chose to relieve those purchasing machinery and equipment from paying the provincial sales tax.

I did ask the Minister of Finance about that — not this minister but the member for Vancouver-Quilchena. It was a $110-million-a-year tax expenditure, and I asked what studies had been done to confirm, or not, the efficacy of that relief in taxation. Generally, when you spend that amount of public money, you would want to know what the benefit might be.

Was there a concurrent increase in the purchase of machinery and equipment? Was there any assessment of whether that was a good step or not, besides perhaps being intuitively satisfying and ideologically consistent with the position of the government?

He said that no, there had been no study at all. I suppose close to $1 billion in tax expenditure was made up to 2011 without any analysis of whether it worked or not. It felt good, so it was done.

Given that those exemptions are coming back, I think there is some issue about whether they are effective. I note there is an

article as recently as today's Vancouver Sun where the mining industry is acknowledging that they welcome the return of the exemption from PST for equipment involved in mineral exploration and mining.

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That is coming back. I think that's a good thing, although the impact in terms of investment, jobs — the analysis has not been made, and I don't suppose it will be. Nonetheless, given the commitment that was made by the government on bringing back the permanent exemptions, that's one that will come back. I think it's fair to say that it's easy to understand why industry welcomes that, because the tax on machinery and equipment, for the most part….

There was some

interpretation problems at the edges, at the margins of that. For example, in the forest industry, any machinery used on the cutblock, any machinery purchased to run a sawmill operation, whether it was the computer systems or software, the chains, the production line, all the equipment that went into running the sawmill — none of that attracted the PST and hasn't for some time.

In some ways the debate about the impact of the PST on some aspects of business was a bit of a false one, because I don't think that was generally publicly realized. Notwithstanding that, those exemptions will be coming back, as I've said.

The other issue that I wanted to look at beyond administration is just the commitment to getting this process in place as quickly as possible. Certainly, the minister continues to defend the timeline, and no one doubts that this is a huge undertaking.

One might note parenthetically that that's entirely of the province's making. The B.C. Liberals, obviously, were forced into this by the way in which they conducted the HST introduction and by the referendum. Griping about it, I suppose, is not surprising, but it is a situation entirely of their making.

Many people are still of the view that this process could be accelerated. I know the minister continues to make a robust defence to the contrary, but I would say that in matters of public administration, these matters can be expedited. Certainly, I think the failing was probably not to get an early enough start on it.

It was obvious, at least as one possibility back in June or July of the year of the referendum, that the HST might not prevail. Perhaps it would have been prudent to have begun work at that point, giving at least a couple more months to the forming and writing of bringing back the legislation. That was perhaps a wish not to commit what many on the government side thought would be unnecessary work, but I think that was probably a similar failure in calculating the public mood on this issue that was reflected in a lot of other things they did in the process of this debate.

I'm going to be able to draw to a conclusion on this and give way to whoever the next speaker on the opposition side might be. I'm assuming there are no speakers on the government side.

I think it's important just to bear in mind that this bill reflects a substantial victory for democracy in the sense that it brings into effect a bill in the session following the referendum, as is required by the Referendum Act, implementing the bulk of the wish of the voters, which we've all debated here and publicly in so many ways since

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2009. This is, I think, an occasion for…. It is a tax statute, and not everyone is keen to celebrate taxes, although a famous American judge did say that taxes are the price of civilization.

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Certainly, if you look at places like Pakistan, where the revenue…. Only 5 percent of the population actually pays any taxes, and their public services reflect the fact that no one pays taxes. It is an occasion for celebration, notwithstanding the fact that it is a tax statute.

If this matter does get to committee…. It is a very lengthy bill. It's 160 pages and 250 sections. I've indicated very briefly some of the areas of concern that I have. But we'll see whether we get there. I fear that this important bill will go on closure — that is, debate will be ended on it — very much like the HST bill, which was not fully debated. But it's going to be done away with in any event.

With those concluding remarks, I would resume my place and give way to another member in the debate.

N. Macdonald: Well, this is one of those rare occasions of bipartisan celebration as we're all going to support this bill and move forward after three years of chaos. It's kind of interesting that we don't seem to have a long list of government members wanting to stand up and speak on this.

I think the member for Kootenay East, who is currently the B.C. Liberal 2013 co-chair, described it as the HST fiasco. I think that's a pretty good description of what we've seen, and the PST bill that's in front of us is just the latest

chapter in what has been almost an endless story of chaos and incompetence. But throughout it all there are some interesting stories and some real accomplishments that I want to spend the time available to me talking about, because each of us here has a local story to tell.

What took place in British Columbia around this bill is an important part of this province's history. It has political impact far beyond just this taxation issue, although the taxation issue is not insignificant. Nevertheless, I would say that the implications are broader.

As we look at the PST bill, it's a huge bill. It has been brought in fairly late in the calendar for this session. Nevertheless, I hope that as we move through second reading, we have a good opportunity in committee stage to talk about it as well.

Let's just go back to the genesis of the need for this bill. One part of it, of course, is the referendum. I'm pleased to say that on the day that the HST referendum results were announced, I think many members were sitting and waiting for the results to come out. There was quite a lot of drama as we had members of the media tweeting the numbers being brought in, talking about the delay as everyone waited to get the results. It was actually pretty exciting.

I think most members that were very active on the issue looked very quickly at the results from their area. Having heard the provincial results, I think all of us went and looked at the results from our area. Certainly speaking for the NDP caucus, we as individuals were very active in making sure that we represented the people who elected us.

I know that it was gratifying — when you are standing up in this House, as we did many times speaking on this issue, and you are certain that you are representing your area accurately — to actually have it proven in a referendum that you do speak accurately for the majority of people that you represent.

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In my area it was 66 percent of those that voted, and it was a high voter turnout across the province. Sixty-six percent voted to remove the HST and go back to the PST. As we look at legislation that, however belatedly, puts us back to the system that people wanted, it is a time to look at what took place and acknowledge some of the people who put tremendous effort into making that happen.

The HST became a part of British Columbia folklore with a surprise announcement in the middle of the summer. When many of us heard it, we didn't immediately know where the announcement was coming from or what the motivation for it was. Certainly, it was not widely discussed in the election, since the two main parties agreed that the HST was not something that was being contemplated. When it was announced in the middle of the summer, I think it took a while for even the politicians who watch this very carefully to really understand the magnitude of what would follow.

What we did know, coming out of the 2009 election, is that the positions that the B.C. Liberals had put forward and were elected on were, post-election, going to be problematic. Some of the things that former Premier Campbell had guaranteed were simply proving to be inaccurate.

There can be a debate as to whether that was purposeful or whether the Premier should have known differently. Ne