Third Session, 41st Parliament

(2018) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Tuesday, March 13, 2018

Afternoon Sitting

Issue No. 103

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Orders of the Day

Committee of the Whole House

Bill 2 — Budget Measures Implementation Act, 2018 (continued)

Hon. C. James

S. Bond

T. Redies

Reporting of Bills

Bill 2 — Budget Measures Implementation Act, 2018

Committee of Supply

Estimates: Ministry of Forests, Lands, Natural Resource Operations and Rural Development

Hon. D. Donaldson

J. Rustad

D. Barnett

C. Oakes

S. Bond

D. Davies

M. Morris

I. Paton

A. Olsen

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Education (continued)

T. Shypitka

Hon. R. Fleming

J. Thornthwaite

J. Rustad

B. Stewart

D. Davies

Estimates: Ministry of Environment and Climate Change Strategy

Hon. G. Heyman

P. Milobar

M. de Jong

TUESDAY, MARCH 13, 2018

The House met at 1:32 p.m.

[Mr. Speaker in the chair.]

Orders of the Day

Hon. M. Farnworth:

In this chamber, I call continued committee stage of the Budget Measures

Implementation Act, Bill 2. In Committee A, I call continued debate on the

estimates of the Ministry of Education, to be followed by the Ministry of

Environment.

If we finish Bill 2, then I will be calling the Ministry of Forests, Lands

and Natural Resources estimates.

Committee of the Whole House

BILL 2 — BUDGET MEASURES

IMPLEMENTATION ACT, 2018

(continued)

The House in Committee of the Whole (Section

B) on Bill 2; L. Reid in

the chair.

The committee met at 1:35 p.m.

section 85 (continued)

Hon. C. James:

We were having a discussion, before we broke for lunch, about some

language that is in the act that, as I talked about, was routine

language that is in all tax statutes — in fact, it’s in all tax statutes

across the country — and that the protection is there for basic clerical

errors. I think that’s probably the best way of describing

it.

This doesn’t absolve administration or staff or the bureaucracy

from making errors, but it ensures, if there was an error — an example,

like somebody’s name is misspelled on the form or somebody’s phone

number is wrong — that it prevents the court from overturning a fee that

is in place for good reason and that has gone through due process. If

somebody has a fee to pay, it protects government from having that fee

overturned.

That does not take away from the ability for people still to say:

“There was a problem here. Due diligence wasn’t done. I can go to court.

I can still have the opportunity to have the administrative process

taken a look at to make sure there was due process.” But this protects

government against a simple clerical error overturning what is a valid

reason for someone to have a fee in place so that they have to pay the

penalty and pay the fee.

Section 85 approved.

section 86.

S. Bond:

Good afternoon, Minister.

I understand that

section 86 is simply consequential to the

amendments made in

section 32. But perhaps the minister could just

outline for me: what types of “Regulations in relation to tax payment

agreements” under

section 32 does the minister envision may be necessary

with respect to this new eligible tax service? Is there some way to

provide an example of what would be captured under that

clause?

Hon. C. James:

I think the easiest example would be timing of self-assessing the

tax. That could be in the regulation: here’s the timing of how they have

to self-assess the tax that is here now, with the eligible taxable

services. That wasn’t there before. Timing might be an example of what

would go into the regulation.

Section 86 approved.

section 87.

T. Redies:

Section 87 adds regulation-making powers to exclude some on-line

marketplaces from being on-line accommodation platforms. What is the

purpose behind this — for exempting some on-line marketplaces from the

obligation to pay tax? Could you give us some examples of how this would

fit?

Hon. C. James:

As we talked about in previous sections, this is related to

on-line accommodation platforms, where money exchanges hands — where a

service happens and money is exchanged or payment is received. An

example would be somewhere where that isn’t happening.

[1:40 p.m.]

That would kind of be the flip side of that: where there is no

exchange of money — simply an ad, for example — where it’s not an

on-line accommodation service, where people don’t reserve and then pay

on the on-line platform. It may be just a basic ad advertising something

or asking for something, where no money is exchanged. The key, really,

on these pieces, on the previous

section that we talked about, and on

this section, is the collection of money or the collection of the fee

for the accommodation.

T. Redies:

Thank you for that clarification, Minister. In terms of this

particular section, are all operators currently required to collect and

remit provincial sales tax with the on-line marketplace

platform?

Hon. C. James:

This really is focusing on those on-line accommodation providers

outside the province. They’re currently outside British Columbia.

Therefore, we are putting in place this enabling language to enable

those individuals to be able to collect and remit to government. That’s

what the sections provide for.

There could be, right now, people paying on line for hotels that

exist in British Columbia. They already have the ability to be able to

collect tax because they’re based in British Columbia. An existing hotel

could be going through this process and collecting the tax. This is

focused on those on-line accommodation providers outside the province.

Currently there is no provision for them to collect and remit to

government. This provides that opportunity.

S. Bond:

We’re setting up the framework and the system to allow for taxes

to be collected for platforms like Airbnb and others. We always use that

one because it’s the one we all remember, and it’s probably the most

mentioned.

What requirements will be increased at the ministry level? I’m

assuming, if we look at the accumulation of the sections that we have….

We’re now on

section 87. There’s a lot of new work being handed out

here. We’re looking at how we collect taxes and when we collect taxes,

and we’re adding new taxes. Now we’re adding a new on-line accommodation

platform. What are the ministry requirements in terms of managing this

new tax collection system?

Hon. C. James:

There is work being done within the ministry, so existing staff,

to set up the geography and the information that’s needed from the

on-line accommodation providers, but the existing tax structure for

people to register and then to file returns is already there. There’s no

additional work required for that. That’s already an infrastructure

that’s in place. They will just use the same infrastructure as other

businesses do to register and to file returns.

It’s really making sure that they’re set up to get the right

information in. We’re going to provide some additional support, but

there’s not an expectation that it will require additional staff. Right

now that’s being managed within the ministry.

S. Bond:

Could the minister just describe for me what a “prescribed

designated accommodation area” is, please?

[1:45 p.m.]

Hon. C. James:

A prescribed area is related to the municipal and regional

district tax. So it is the geographic area. The municipality or the

regional district, however they put themselves together to be able to

access the MRDT — that’s what a prescribed area is.

Sections 87 and 88 approved.

section 89.

T. Redies:

To the minister: can you explain what the intent of this

particular

section is in terms of creating a category of dwelling

property?

Hon. C. James:

I think maybe the best way to start this, before I go through the

definition, is just to look at what the goal was. The goal, through this

school tax, is to identify the homes or the types of homes where owners

have benefited the most from rising property values without having the

tax fall on providers of rental housing, for example.

As I go through it, you will see there is some included and some

not included. That’s really what we’ve done in defining dwelling

property. The tax base for dwelling property includes — and I’ll just

run through the list, if that’s helpful for the member — a residence and

related residential buildings on farmland but not farm outbuildings;

vacant land in class 1, unless the vacant land is in the agricultural

land reserve; fee-simple homes and unstratified duplexes and triplexes;

stratified condominiums and townhomes that currently receive a property

assessment notice and a property tax notice.

What does the tax base not include? I’ll just continue on with

that, because I think that’s helpful. It does not include certain types

of properties as described in the Residential Tenancy Act, so co-op

housing rented to a member is not included; certain living

accommodations of an educational institution; emergency shelters or

transitional housing; certain health care facilities.

[1:50 p.m.]

Then there will be regulatory powers that go with this act that

allow you to remove things, not to add things. To add things is here in

the legislation, but the regulatory powers will allow you to remove

things if an exception comes up that needs to be addressed.

T. Redies:

Thank you, Minister, for that clarification.

In subsection 3, it refers to the ability to apply regulation

retroactive to tax years 2019 or 2020. Is it the intent of this

subsection, then, to not allow any retroactive regulations after the

2020 tax year, or is it the intent to capture tax regardless of when the

tax is implemented? How would this apply?

Hon. C. James:

This really is a

section that’s put in place to address a new tax

coming in. It’s not a new tax. It’s an expansion of a tax — but a new

tax coming in — and the ability to be able to, again through regulation,

address any timing issues that may arise that weren’t the purpose of the

bill. So it gives us the chance for two years, as we implement this, and

if we catch that there were timings when….

For example, the year finished on December 31. You started the new

year. The tax bill came out. There were months in there that were

charged that shouldn’t have been charged. This gives us the ability to

be able to address that through the regulation, for those two years, as

we implement this tax bill.

T. Redies:

Why is it necessary to authorize the

Lieutenant-Governor-in-Council to make regulations respecting any matter

for which regulations are contemplated by the definition of this

“dwelling property”? It seems to give the Lieutenant-Governor very

open-ended powers to tax property owners.

Hon. C. James:

The restriction on this power, so to speak — or the authority, so

to speak — is that: “…may make regulations respecting any matter for

which regulations are contemplated by the definition of ‘dwelling

property.’” It refers back, again, to the dwelling property list. That

comes back, again, to the piece that I talked about before, where you

won’t be able to add to that list.

It’s the definition that is here and any regulations related to

the definition that is here, not additional pieces where it may be

decided regulations are needed. So it’s limited by the dwelling property

definition.

Section 89 approved.

section 90.

[1:55 p.m.]

S. Bond:

I understand that this is consequential to the amendments. I’m

just interested in…. Maybe the minister could explain the

context.

We’re talking about

section 90, referring to the School Act,

section 119. What is the purpose of striking out the word “school”? In

fact, it also takes out “school taxes under this Act.” We’re creating a

different framework here. Also, “substituting ‘taxes under this

section’” and striking out “each class of property.” Could the minister

explain to us what exactly

section 90 is doing?

Hon. C. James:

Basically, what we’ve done is created a new section, a separate

section to deal with the additional school tax, and cleaned this one up

to deal with the current school tax.

These amendments make no changes to the existing school tax. The

terminology has changed so you can distinguish this section, with the

existing school tax, from the new section, with the new school tax. We

felt it was important to make sure that the

definitions were clear for

people.

The

definitions of “variable tax rate system” and “property

class,” for example, which applied only to the existing tax, are moved

into this

section — again, to make sure that this

section is clear, that

it’s talking about the existing school tax. The new

section talks about

the new school tax.

Sections 90 and 91 approved.

section 92.

T. Redies:

This section, of course, deals with the implementation of the new

school taxes. So we’re going to have some broad observations as well as

some questions for the minister.

I know there was a little bit of a discussion yesterday about what

modelling the government does to determine the impact of some of its

decisions. I think we got to a point where the minister confirmed that

they actually do analysis and modelling ahead of just bringing forward

their taxes. What I would like to hear from the minister is actually

what analysis has been done in advance of the budget to determine the

impact of this school tax increase in conjunction with all of the other

tax increases that were announced with this budget.

[2:00 p.m.]

The Finance Minister is on record as having said that she would

like to see the housing market go down. I guess what I’m trying to

understand is…. Exactly what are you predicting will happen with these

tax increases, particularly in the context of your 30-point housing

strategy? What are you expecting to have happen in terms of the housing

market, particularly around prices and affordability?

Hon. C. James:

Just to, once again, make sure that the record is clear, I have

certainly said that I hope that we see more affordable housing in

British Columbia. I have certainly said that I hope we see a moderation

in the market. I think that’s going to be critical in our housing

market.

As we look at the analysis of our 30-point plan, as we look at the

measures that we’re putting in place, we’ll be continuing to look at a

number of indicators to track over the coming year. Vacancy rates,

obviously, is one of those critical pieces. Foreign ownership is another

piece that we’ll be tracking in our province. House prices is another

piece that we’re going to be tracking — construction numbers,

development in British Columbia. That’s just an example of the kinds of

indicators that we’re going to be tracking as we go along.

Certainly, as I said, I do hope we see a moderation in the market.

I do hope that we see more affordable housing in our province. We

believe that this is one measure that will, again, provide support for a

number of the other measures in our 30-point plan.

T. Redies:

Maybe I was not clear enough in my question. What I’m asking is:

what analysis was done before you brought the budget forward with

respect to the total number of these taxes on the housing market? I

presume that there was some analysis made, and I’d like to understand

what that analysis told you.

[2:05 p.m.]

Hon. C. James:

I think this is a repeat of our conversation yesterday — I think

it was yesterday; I’ve lost track — around the number of measures that

influence what will happen in the housing market. Certainly it’s why, as

I said yesterday, we took the time to put together a comprehensive

housing strategy.

We analyzed not only the tax measures but the supply and demand

measures — all of the measures that are within our housing strategy. We

believe the mix of measures that we have provided will move in the

direction of, as I said, moderating the market, providing more

affordable housing and creating that balance.

When it comes to the impact that occurs after the taxes are in

place, as I mentioned in the discussion yesterday, that gets built into

our economic modelling. Once they’re in place and once those taxes have

been passed or become part of the budget, that then becomes part of the

economic modelling that then looks at first quarter, second quarter and

building into next year’s budget.

T. Redies:

I think I understand the process now, but what I’m not hearing is

an answer to my question. The minister has indicated — actually, even

indicated yesterday — that we do economic modelling, obviously. We take

a look at implementing and do the modelling of new taxes coming in. I

presume that they did that with the school tax and the property transfer

tax.

What I’m asking is: what did that analysis tell you, particularly

in light of the other taxes that you were looking at implementing with

this budget?

Hon. C. James:

I come back again…. I know the member and her colleague didn’t

agree yesterday around supply and demand.

Again, when it comes to measures, our analysis when we took a look

at the percentage of homes in British Columbia that are impacted, when

we took a look at the formula that we used to put together this tax, we

believe it’s a modest rate. We believe that it will generate revenue

that helps with affordability.

We felt that it was a measure that could be implemented and that

along with the other measures being put in place around supply and

demand, that’s going to have a positive impact on affordability of

housing for families.

S. Bond:

Well, thank you very much, Minister. We appreciate the commentary.

However, budgets aren’t built on feelings and thinking about what might

or might not be put in at some later date. Just weeks ago the minister

tabled a budget in this House and projected revenue attached to a whole

series of new taxes. I find it quite implausible that there were not

assumptions and modelling that actually generated those

numbers.

Let’s see if we can get to an answer that speaks to us about

exactly what assumptions were made in terms of the revenue, the impacts

on British Columbians, the fact that when it comes to developing a

project in British Columbia now, there will be taxes levied at three

different times, with the impacts being felt by British

Columbians.

What we’re trying to do here is understand the assumptions that

were made in the budget and how the revenue projections, which are

captured in a budget that was tabled in this House, were arrived

at.

[2:10 p.m.]

Hon. C. James:

As the member knows, there is analysis done on all changes that

occur and certainly when you’re looking at tax changes. Analysis was

done on the revenue that could be generated on the various measures that

we are looking at — on the number of individual homes or homeowners or

dwellings that were going to be impacted by the various taxes. All of

that was analyzed to arrive at the decisions around which measures were

going to be utilized and which measures were not. That was a choice, as

it always is, by government and by cabinet. Those were the numbers that

came forward.

We looked at the revenue that would be generated. We looked at the

revenue streams. We looked at the impact on the households and the

number of households for each of the various measures, including whether

a household was impacted by one or two measures. We looked at our supply

and demand, our comprehensive housing strategy and the revenue that

would be utilized to provide those programs and services for

affordability, and made the decisions that we made.

T. Redies:

I hear what you’re saying. I guess what I’m asking is: was there

any modelling done on the cumulative impact to housing prices of the

property transfer tax increase, the spec tax increase, the school tax

increase, the EHT? If so, what was the impact going to be on the housing

market to make it moderated or more affordable for British

Columbians?

Hon. C. James:

As I’ve said over our couple of days of discussion, a couple of

these measures, as the member knows, are new, including the speculation

tax. That is something new and bold, a bold measure that we are bringing

forward in British Columbia. As we bring our comprehensive housing

strategy forward, we will be analyzing it as we go along. We wouldn’t

presume to predict a new impact. We certainly, as I said, believe that

all of our measures taken together will have an impact on affordability

and housing, both in supply and demand.

[2:15 p.m.]

Those are the big areas, as I talked about yesterday, that

certainly we have been encouraged to move ahead in, whether you’re

talking about economists or researchers or professors in the area of

housing or individuals’ recommendation. To move, in a broad way, on

those issues is what we are looking at and coming forward with. We will

be continuing to analyze, as well, all of the outside

factors.

I think we also have to remember that there are outside factors

that impact the housing market — interest rates, the changes that were

made mortgage-wise at the federal level. It’s not simply an analysis of

our measures. Those are critical, and we are going to analyze those as

we go along.

As I said, they will become part of the economic model. Therefore,

we’ll start getting that, in first quarter and second quarter. It’ll

give us a chance to be able to do that kind of analysis that’s

needed.

We will also be tracking, at the same time, the kinds of changes

that have been made on the outside that also have an impact on the

housing market — to be able to make sure if there are changes that need

to occur or additional measures that need to be put in place. That’s

what we’ll be looking at.

We certainly don’t expect, as we look at the housing market five

years from now, that we might not need some different kinds of measures

or different approaches. We believe that that’s why we’re bringing in a

long-term, comprehensive strategy. One measure isn’t going to address

the housing affordability crisis that we have in place now. It’s going

to take a number of measures. It’s going to take real analysis of those

measures as we go ahead, as we bring them in, and that’s what we plan to

do.

T. Redies:

I think what you’re telling me is that you actually don’t know

what the cumulative impact of these taxes on the housing market is,

which is incredulous to me — that you would not have some idea as to how

these various tax measures that you’re taking are going to impact the

housing market. Am I correct or not?

Hon. C. James:

In fact, the analysis that is done…. As I said, we analyze each

tax as we’re looking to bring it in, or a housing change that we’re

looking to bring in. That is analyzed. We certainly believe, and our

analysis shows, that we will see upward pressure around vacancies. But

if you increase supply and demand — looking back, again, to supply and

demand — we will see downward pressure when it comes to foreign

ownership. And we will see a moderation on housing prices. That is what

our analysis shows.

If the member is looking for a percentage or price point that will

adjust…. I think, again, as I mentioned earlier, we are looking at both

our measures that we are putting in place and external pressures that

impact the housing market. So we are not setting a particular price or a

particular percentage. We are going to do that analysis month by month.

That’s going to be critical as we look at our plan.

Certainly, the analysis, as I said, that we showed…. That’s why we

took our time to do a comprehensive housing strategy. It was to make

sure that the measures that we brought in had been looked at around how

they will impact vacancies, how they will impact a moderation of prices,

how they will impact foreign ownership in a way to address affordability

for British Columbians.

[2:20 p.m.]

S. Bond:

The minister suggests that there’s been an analysis and that it’s

going to begin to deal with the issue of affordability. There are

significant numbers of builders, people who are going to be part of the

solution in terms of the housing and affordability challenge in British

Columbia, expressing significant concerns and, obviously, not having had

input previously. In fact, when you look at the property transfer tax,

the foreign buyers tax, the school property tax and the

yet-to-be-defined speculation tax, this will add to the cost of

residential building in British Columbia.

Has the minister considered what the impacts of the layered-on

levels of taxation for builders in British Columbia will do? How will it

impact British Columbians directly?

Hon. C. James:

I know we had this discussion yesterday, but I’m happy to have it

again. That’s part of the reason we put the comprehensive plan

together.

Yes, we have been listening to developers. Yes, we have been

listening to co-op housing. Yes, we have been listening to faith groups

and communities. Yes, we’ve been listening to individuals and

organizations that work with homeless people. Yes, we’ve been listening

to people who are struggling to find housing.

We, in fact, have been spending the fall consulting with all of

those individuals, which is why we came up with the 30-point plan that

looks at addressing supply and demand. Yes, we factored in the impact of

all of the 30 points in our plan and the impact that they will have. We

believe that a comprehensive approach is actually going to address

supply and demand, which is going to address affordability in our

province.

Whether we’re talking about the housing hub and the partnerships

that we’re looking at; whether we’re talking about the revitalization

areas and the opportunity to waive the school tax in those areas for

developments, for rental-built housing; whether we’re talking about the

money that we’re putting in for purpose-built rental housing — all of

these measures are measures that, again, we have been having in

discussion with housing groups, faith groups, developers and the private

sector about how we can make sure that affordability is

addressed.

T. Redies:

Minister, I’m sure, with all these conversations that you’ve been

having, that none of the residential developers said: “Please tax us

more so we can help you.” I’m sure that’s the case. I’m pretty sure they

wouldn’t appreciate the employers health tax, either, as a way of making

it easier for them to put more supply out there in the

marketplace.

In fact, actually looking at some of the statistics that UDI has

given us, on a $30 million property with about 80 units…. I think

everybody in this chamber knows how long it’s taking to get residential

property permits through the various municipalities — anywhere from a

year to five years.

[2:25 p.m.]

Looking at the costs of the additional school tax and the property

transfer tax, which my colleague has already noted gets applied three

times in that process, it would add close to $2 million onto a project —

the school taxes and the property transfer tax — which, if divided by 80

units, is about $25,000 per unit. That is before the employer health tax

and the doubling up of the MSP in the one year are applied on these

residential properties.

How is increasing the end-unit prices of condos and townhouses by

$25,000 or more a unit going to make things more affordable for British

Columbians?

Hon. C. James:

We’ve had this conversation. We can continue to have this

conversation. I will continue to raise the 30-point plan that we have.

That is a comprehensive plan that approaches a number of different areas

that we have looked at: increasing development, purpose-built rental

housing to provide affordability. We have talked about the work we’re

going to do through the housing hub with developers, with the private

sector. We believe this is action that is necessary, that is needed and

that will begin to address the crisis.

It’s certainly not going to address it overnight. There is no

question about that. But we are going to continue to act in a way that

British Columbians expect us to and, in fact, elected us to.

S. Bond:

The people of British Columbia also elected this government to lay

out a budget and be able to explain how the targeted revenue numbers are

in the budget. Over the last number of days and weeks, we continue to

hear that, yes, there are revenue targets, but by the way, we’re going

to look at exemptions. We have room for this. We have room for

that.

The questions we are asking today as Finance critics for the

opposition are simply to have the minister explain the metrics with good

solid budget planning. We are presented with a budget document that has

revenue targets in it, yet the minister has been unable to explain,

other than pointing to a 30-point plan, exactly how that revenue target

was generated.

Subsequent to that, we hear this afternoon that apparently, at

some point during the day, the Premier has made it clear that oh, yes,

there’s room to fix all kinds of issues. In fact, some of the taxes

might get fixed before the end of session.

I think British Columbians also want to know how this budget was

put together.

Once again to the minister: when we look at the assumptions and

the layering on of taxes and the cost to British Columbians about

multilevels of taxation that will be applied to building units…. We now

have the school tax increasing on those properties. We have the property

transfer tax. We have all of these taxes. What numbers can the minister

provide to us that would explain how the revenue targets were generated

and how on earth there is now any sort of credibility with the numbers

that have been presented?

Hon. C. James:

I’ll say again to the member across the way that the member has

the budget. The member has the numbers, as all British Columbians do, on

the revenue that we expect to come in on the taxes and the various

measures in the budget. They are listed in the budget document. They are

done.

As I talked about, the analysis has been done on each of those tax

measures, taking a look at the number of dwellings or the number of

houses or the land that’s going to be impacted; taking a look at the

ability for those developments; taking a look at the ability for their

homeowners or vehicles, if we’re talking about vehicles. If you look at

the range of tax measures in here, the ability for those individuals to

be able to contribute towards affordable housing for the people in

British Columbia….

I would correct the member, again, when it comes to the

speculation tax. The member knows that I said on budget day that details

would be coming, that we would be finalizing the details, that we would

take our time to finalize those details, that we would take a look at

the issues that have been raised and that we would bring forward the

specifics.

[2:30 p.m.]

The legislation will come in the fall. The specifics, as I’ve

said, will come later in the spring. Those details will be coming. I’ve

mentioned that. I can say it in a different way for the member, but

that’s the answer that is there, because that’s the fact.

T. Redies:

If the goal is to try and create more supply and more affordable

housing — I’ve just mentioned that on a $30 million, 80-unit project,

you’re going to add at least $2 million in costs on school tax and the

property transfer tax alone — why not grandfather the existing

residential developments underway in Vancouver?

Hon. C. James:

I appreciate the member looking at what she believes would be a

way to address some of these issues, but I think grandfathering, or

grandparenting, would create a two-tier development situation. I can

think of all kinds of complications that would be addressed

there.

We believe that the comprehensive approach — all of the measures,

when taken together — will address supply and demand. Both of those

pieces need to be addressed, we believe. We don’t believe there’s going

to be one measure that’s going to make or break it. We believe the

changes we’re making on the school tax and the changes we’re making on

the property tax are going to bring in revenue that will assist with

affordability and spur on further developments. And we believe that

that’s going to assist the market.

S. Bond:

To pursue my colleague’s line of questioning, which I very much

appreciate…. While the minister assumes, hopes and is crossing her

fingers that it will actually do what is being suggested it would do,

people who have expertise in residential building in Metro Vancouver

have expressed significant concerns. In fact, the minister would be well

aware of the concerns that have been sent to her which suggest that tax

increases that are significant, which they note, will have the

unintended consequence of further undermining housing

affordability.

We have experts who build in Metro Vancouver, we have projections

of additional costs that work their way down to the purchaser, and the

very people who the minister is expecting to assist on the supply side

have expressed significant concerns. Did the minister and her staff look

at the impacts of tax increases, particularly on development sites in

Metro Vancouver, and consider the unintended consequences of the impacts

on housing affordability?

The Chair:

The Minister of Finance.

Hon. C. James:

Well, thank you very much, Chair, while you change

shifts.

[R. Chouhan in the chair.]

Yes, I’ve been hearing the concerns, and I’ve been hearing the

praise. I’ve been hearing the issues that have been raised, and I’ve

been hearing the encouragement for the direction that we’re taking.

Whenever you make change, there are people who are going to agree; there

are people who are going to disagree.

The important factor here is looking at affordable housing and

making sure that we’re doing the analysis that needs to occur, making

sure that we are continuing to take a look at the market, continuing to

look at affordability for families. That’s the key here, and I will

agree to disagree with the member.

T. Redies:

I’m just looking at page 89 of your budget book. Your ministry is

actually expecting residential housing starts to fall over the next

three years, from 32,000 units in 2018 to 29,500 units, in the medium

term. What about this strategy is increasing supply? It certainly

doesn’t look like it.

[2:35 p.m.]

Hon. C. James:

The member is correct. We do expect a moderation from the

extremely high levels that we saw the previous year that in fact did not

address affordability. That was the challenge. If you saw the extreme

housing numbers that were being built, it was not addressing

affordability. Those were not affordable houses. So, yes, we expect a

slight moderation, still well above the historical average, continuing

to be above the historical average.

Included, as well, in that

section of the budget, as the member

knows, is the fact that we expect the average house price to moderate.

We believe those measures, again, are addressing supply and demand, are

addressing the more affordable demand and supply that are needed and,

taken together, will make sure, as I said earlier, of moderating the

market, providing affordability for people.

S. Bond:

I want to go back to the question and the discussion around

modelling. Often when governments are looking at their budgets, they

contemplate the cumulative effect of impacts on families and

individuals. In fact, I know certainly we would take the opportunity to

look at a person with a particular income. It might be a single senior.

It might be a couple that were seniors. There is a lot of modelling, and

assumptions, in terms of how you put the budget together.

When it comes to the school tax, I would like to ask the minister

if, in the analysis…. Although I get the distinct impression this is tax

first; analyze later.

We’re certainly seeing adjustments. There’s going to be tweaking

taking place all over in the next little while, as British Columbians

have spoken out, especially about taxes that were not supposed to apply

to them. “No British Columbians,” we were told, but lo and behold, there

are British Columbians.

Let’s look at extra school taxes. Let’s look at the fact that

there are people who live in Vancouver — and elsewhere in the province,

but particularly in Vancouver — who happen to own a home, a Vancouver

home that was purchased decades ago. Through no fault of their own, the

value has gone up. That person, that family, those individuals, may be

living on a fixed income. So they might be described as asset rich. They

have a very valuable asset.

Did the minister do modelling when she made an assumption about

them being able to handle additional school taxes when they live on a

fixed income? Was that type of modelling done?

[2:40 p.m.]

Hon. C. James:

Certainly, consideration was given to people who may be living in

homes that they bought a long period of time ago. Those are problems

now. Those are issues now for individuals.

That’s why — I know the previous government looked at this as well

— you have the ability for people to look at deferring their taxes. If

they are in years where they have low income or years where they have

small children, dependent children, they have the option of deferring

their taxes when they have an asset that may be worth more than $3

million, as we’re talking about in this section.

Those supports are available. But we felt, overall, that bringing

in the additional dollars for people who own homes worth $3 million or

$4 million or $5 million, when they’re sitting on that kind of asset,

was reasonable with the supports in place, as I said, for individuals,

for seniors — individuals with dependent children and seniors — to be

able to look at the deferment, if they hit years where they’re not able

to pay their taxes.

S. Bond:

Well, I think that this afternoon we’ve just walked through what

is a significant difference with the way that we believe that budgets

need to be built. I think what is becoming abundantly clear, not just in

this Legislature but in our province, is the fact that there has been a

lack of modelling.

I mean, I’ve been here a long time, and I can tell you there are

processes, there are models, and there are assumptions that need to be

checked and made. In fact, the minister has talked about how this is a

bold plan. This is a plan that potentially lowers the value of equity

that people have earned in their most valuable asset, their

home.

From that, the minister has extrapolated that by doing that,

somehow, by layering on taxes to those very people who she will be

expecting to help build on the supply side — layered on level after

level of taxation and the concerns that have been expressed by builders

in British Columbia….

We cannot make our case any more clear. We believe that there has

been a lack of modelling looking at the assumptions. In fact, the very

plan that was tabled in this Legislature has the very real possibility

of actually — hopefully, they were unintended consequences — enhancing

the affordability crisis.

While we’ve appreciated the collegial discussion here, this is

about numbers; it’s about facts. But it’s about families in British

Columbia.

[2:45 p.m.]

First we heard British Columbians were out of the tax. Now they’re

in the tax. Now we’re going to fix the tax. We have no idea what the

basic assumptions that have generated specific revenue targets in this

budget are. In fact, we’re hearing now that they could well be

changed.

We just wanted to clearly be on the record that when you look at

the combination of taxes, including the school tax, on people who may

well have significant asset value, who may well have limited incomes,

there will be an impact on British Columbians.

We’ll leave it there. If the minister wants to lay out any more

numbers or facts or details, that would be helpful to demonstrate that

there has been the kind of modelling that British Columbians expect

before those costs are passed on to them.

It’s one thing to deal with taxation when it comes to people’s

earnings, but we’re now taking a run at their assets. We’re now taking a

run at their property. The whole hope, cross our fingers, is that

somehow it’s going to help the affordability issue and the availability

of housing in British Columbia. We respectfully disagree with

that.

I think that the discussion over the last couple of days has made

it very clear that there is very little specific detail available to be

able to assure British Columbians that the budget that was tabled here

and that this bill brings to life has the kind of metrics and modelling

and assumptions that should be made when bringing a budget forward for

British Columbians.

Hon. C. James:

We will respectfully disagree, Member, particularly around the

analysis that continues to be done. What is clear, I would say to the

member, is that, yes, we have different priorities. There is no question

about that. We, on this side of the House, in government, believe in

addressing affordability in housing. We believe in taking some bold

measures to do just that.

We continue to analyze the information that is there. We continue

with the rigour that has always been there with the staff in the

Ministry of Finance, who continue their fine work. I will take umbrage

with the member’s comments around the lack of rigour that has been done.

The rigour has been done. We have done the kind of analysis that needs

to be there. It is fact based, as it always has been and always will be

with the fine people who work in the ministry.

I recognize, from the member’s discussion that we’ve had, that the

member does not agree. That is the member’s prerogative — to disagree

with the actions we take on housing. That’s why we have a legislature,

why we have democracy, why we have an opportunity to debate this. The

members will disagree on action around housing.

We believe that’s an important priority, and we will continue to

move ahead on affordability on housing. We will continue to analyze the

work that’s been done. We will continue to listen to British Columbians.

When they believe that there are areas that need to be adjusted or need

to be addressed, we will continue to do that, because that’s what the

public expects.

The public expects their government to listen to them. The public

expects their government to act on the things and the commitments that

they had made. We committed to acting on affordable housing. We are

following through on that commitment. Will there be changes that will be

needed over the next year, in two years? Yes, I expect so.

Housing is an issue, as I said, that deals with supply and demand,

that deals with the issue of outside factors. I am certain that there

will be changes that need to be made. That’s part of our job — to make

sure we do that analysis and we make the changes as they’re

necessary.

Section 92 approved.

S. Bond:

We’ll give notice to the Chair that we have no further questions

to the end of the bill.

I do want to reflect on the minister’s final and closing comments.

She would very well know that my comments or any of our comments were

not at all related to the public service in British Columbia. Having

spent 16 years in various cabinet positions, I fully understand how this

process works and the exceptional nature of the public service that

works in this province.

On that note, we want to extend our thanks to the staff for the

briefings that were provided. Though short and complex, the time was

very much appreciated, as was the time here in the

Legislature.

Sections 93 to 117 inclusive approved.

Title approved.

[2:50 p.m.]

Hon. C. James:

Thank you to the critics for their very good questions. Part of

the real strength of democracy, as I said, is having an opportunity to

have good, strong debate, agreement and disagreement, on these

taxes.

I thank the members for their questions. I particularly thank the

staff in the Ministry of Finance for their incredible work. This is a

very large bill, as we’ve talked about, and I want to express my

appreciation.

With that, I move that the committee rise and report the bill

complete with amendments.

Motion approved on the following division:

[2:55 p.m.]

YEAS — 43

Kahlon

Begg

Brar

Heyman

Donaldson

Mungall

Bains

Beare

Chen

Popham

Trevena

Sims

Chow

Kang

Simons

D’Eith

Routley

Elmore

Dean

Routledge

Singh

Leonard

Darcy

Simpson

Robinson

Farnworth

Horgan

James

Eby

Dix

Ralston

Mark

Fleming

Conroy

Fraser

Chandra Herbert

Rice

Krog

Furstenau

Weaver

Olsen

Glumac

NAYS — 40

Cadieux

de Jong

Bond

Polak

Wilkinson

Lee

Stone

Coleman

Wat

Bernier

Thornthwaite

Paton

Ashton

Barnett

Yap

Martin

Davies

Kyllo

Sullivan

Isaacs

Morris

Stilwell

Ross

Oakes

Johal

Redies

Rustad

Milobar

Clovechok

Shypitka

Hunt

Throness

Tegart

Stewart

Sultan

Gibson

Reid

Letnick

Larson

Foster

The committee rose at 2:58 p.m.

The House resumed; Mr. Speaker in the chair.

Reporting of Bills

BILL 2 — BUDGET MEASURES

IMPLEMENTATION ACT,

Mr. Speaker:

When shall the bill be considered as reported?

Hon. C. James:

Mr. Speaker, with leave, now.

Leave not granted.

Bill 2, Budget Measures Implementation Act, 2018, reported complete

with amendments, to be considered at the next sitting of the House after

today.

[3:00 p.m.]

Hon. M. Farnworth:

I call, in this chamber, the estimates of the Ministry of Forests,

Lands, Natural Resource Operations and Rural Development.

Committee of Supply

ESTIMATES: MINISTRY OF FORESTS,

LANDS, NATURAL RESOURCE

OPERATIONS

AND RURAL DEVELOPMENT

The House in Committee of Supply (Section B); R. Chouhan in the

chair.

The committee met at 3:05 p.m.

On Vote 28: ministry operations, $473,452,000.

Hon. D. Donaldson:

I’ll just start off with a few brief comments. We have lots to

cover. It’s a big, big ministry, and we want to get all of the questions

that members want to ask on behalf of their constituents and on behalf

of everyone in the province.

I’d just like to introduce the people who are assisting today and

throughout the next number of days: Tim Sheldan, deputy minister with

the ministry; Trish Dohan, ADM of corporate services; Sarah Fraser, the

executive director of rural development; Dave Peterson, ADM with rural

development, lands and innovation; Rick Manwaring, ADM, south area.

Given the size of the ministry, we’ll have a lot of staff over the

course of this estimates debate.

I just want to say a couple of brief comments to start off. We

became government just ten days after a state of emergency was declared

around the wildfires. The enormity of the wildfire event is still

settling in to government and to the MLAs in this room who represent

areas impacted by that. Those impacts will go on for a number of

years.

It was the longest state of provincial emergency on record, more

than 65,000 people displaced and 1.2 million hectares burned. There was

a lot of direct wildfire cost — $548 million spent. However — we’ve said

this before, and I know members in this House always want to recognize

this — not one life was lost as a direct result of the wildfires. I

think that’s a tribute to the Wildfire Service personnel, communities,

non-profits and volunteers.

I’m not going to go into details of Budget 2018 because I know

we’ll be going through that in the budget questions, just three or four

highlights. So $72 million is additional funding, committed over three

years for wildfire recovery and to build communities’ resilience to

wildfires, in this budget. An additional $16 million over three years

has been committed in this budget to land use planning, $14 million over

the next three years to improve wildlife management. And in rural

development, the rural dividend funding of $25 million per year has been

extended to 2020-2021 in this budget.

I know that the critic and the members will have a number of

questions around those uplifts to the budget. So with those opening

comments, I’ll let the questions proceed.

J. Rustad:

To the staff, I just want to recognize the staff and thank them

for their work and their dedication to the work that’s done around the

province. I know this past year has been a very challenging year,

especially with the wildfires and the floods and all the challenges —

the switching over of governments, all the issues that come with that. I

know the ministry has done a professional job, as it always does through

these sorts of challenges and work.

I look forward to the next few days that we have in terms of going

through the estimates process. There’s a lot of material that we need to

cover over the course of this period of time. I understand that there

may be some change of staff.

[3:10 p.m.]

What we’ll try to do as best we can is to structure this as we go

so that we can group questions, although there will be a number of

questions that will come in from my colleagues — perhaps some later

today, certainly some on Thursday and maybe even some on Wednesday —

which may require some challenges as we go. I’ll do my best to try to

coordinate through the various topics that we’ll go through.

Just as a note. Because of the Minister of Agriculture recusing

herself for the issue of marijuana, for the questions that were asked in

the Ministry of Agriculture, we’re hoping that we’ll have an opportunity

to ask those questions, potentially today, if you have the staff

available. If not, those are things that we could move into a discussion

tomorrow with the appropriate staff.

To start with, as we work through today, the intent is to work on

rural development first. We have a number of questions, and my colleague

from Cariboo-Chilcotin will lead those discussions around rural

development and the questions that’ll come. There will be a few others

that will come in to have questions around that as well. There will

likely be some overlap between those questions and other functions

within the ministry, but it’s in the context of rural development

through that.

We’ll then move on. Hopefully, we’ll be able to canvass and spend

a short bit of time, I suspect, on the issue of marijuana, and then go

into fish farm tenures and perhaps a few other topics if we get time to

today, before focusing on the meat of the estimates, on forestry and

other issues going into tomorrow. I’m sure there’ll be a number of other

questions that will come with regards to the budget and canvassing the

amounts that the minister had mentioned, as well as the amounts from the

budget.

At this time, I will take my place and turn it over to my

colleague from Cariboo-Chilcotin to start off with the budget debate on

rural development.

D. Barnett:

I’d just like to say a few words about the rural strategy that was

put together by the previous government and the work that was done to

create a rural strategy, which I believe was the first time in British

Columbia. I’d like to recognize the staff that is here with you today.

Many of them participated in the strategy that was put together, worked

very hard and understood what rural economic development really and

truly is.

The strategy that was put together was built on work that began in

2014 with the release of Supporting Rural Development

from

UBCM. The pine beetle coalitions put a document together called A

Voice for Rural British Columbia

. It was a great document. It

took them a couple of years to put it together, all working, the

coalitions, throughout — SIBAC, which is the Southern Interior Beetle

Coalition, the Cariboo-Chilcotin Beetle Coalition and the Omineca Beetle

Coalition.

It created a voice for rural British Columbia. It articulated

government’s promises to rural B.C., including a commitment to give

rural communities a stronger voice and opportunities to develop local

solutions to meet their specific needs.

Many of the actions in the strategy that we put together are based

on advice and feedback from the rural advisory council, which was 13

citizens from across this province, some in local government, some in

economic development, some in industry and some citizens. Government

built on the success of the council, which brought forward new ideas to

support business owners, leaders, workers and families. It continued,

day in and day out, to come forward with new ideas that we could create

jobs, not just build things but keep people working after what they were

doing was built.

Now I see the minister is putting together a new strategy. The

strategy was on line for 28 days. There were meetings held in a few

communities of the province, and by invitation only to attend these

meetings. I find this is not very collaborative. I find it is not open.

In the on-line comments, I see there were 351 hits only.

The 13 members of the past advisory council spent many, many hours

in their communities bringing forward suggestions and

solutions.

[3:15 p.m.]

It frustrates me, and it frustrates many people to see a program —

and a document called building on our rural strategies — that took time,

energy and many, many dollars of staff and others now going to be put on

the shelf. I understand that the new rural strategy is going to be based

more on social programs than economic development.

My first question to the minister is: could you please explain to

me what the new strategy is going to look like, what the new strategy

will entail, who is going to put together the strategy and how it will

become a strategy that really and truly has economic development first

and jobs for families, not just social programs?

Hon. D. Donaldson:

Well, we want to thank the work that the rural advisory council

completed under the previous government, and we want to build on that

work. We have been visiting communities with our engagement process over

16 face-to-face sessions that have been held across the province. Over

400 people have attended those sessions. We’ve also had over 3,000

visits to the engagement website around rural development.

We’re a new government looking at a new strategy. We look at it in

a holistic fashion, both social and economic factors driving the economy

of small, rural communities. That’s the way it should be. We’re basing

it on principles of community economic development and those five

principles of self-reliance, asset-based, sustainability,

community-based and participatory. I especially want to emphasize the

participatory element, especially when it comes to the focus of this

government on Indigenous inputs early in a process, which is being

accomplished through our engagement process.

As far as what the strategy will entail, well, we’re just wrapping

up the engagement process. We’ll be putting together a report that will

be available publicly as far as what was heard at the engagement

sessions, what the themes are. That’s what we do. We listen to what the

people have to say.

I’m not going to presuppose what that report will say, because

it’s coming directly from the people most impacted, from people in rural

communities. We’ll be seeing that report very soon.

D. Barnett:

I thank you, Minister, for your answer, but I will make another

comment, Minister.

When we did our rural strategy, it was done by many, many, many

people throughout the province of British Columbia. It was certainly

done with the interests of economic development. Some of our best

proposals, if you look through the files and if you look through those

that were awarded rural dividend funds, came from our First Nations

communities. They were such good proposals. The amount of jobs and

innovation that have been created in our First Nations communities

because of the past rural dividend is amazing. They are carrying forward

with this.

I take a look at some of the new announcements that have been made

recently for rural development, and I would ask: are you using the same

criteria that was put there by the previous government, or have you

changed some of the benchmarks?

Hon. D. Donaldson:

I just want to say that I agree with the comments around the focus

and the need for attention to rural development that the member has laid

out. Just as a little bit more information, one of the themes that is

arising from the engagement processes is the need for those living in

rural communities to access investment dollars, access capital dollars.

That’s something that has come up again and again in our engagement

sessions.

Also, an overriding theme that’s come up is the need for our

government to continue on our journey with implementing the United

Nations declaration on the rights of Indigenous people. This is seen as

a rural development issue, and the themes are coming up. Of course,

support by government for rural development is a theme that’s come up on

the ground and in communities. Those are the kinds of themes that we’re

looking at that this report will outline.

[3:20 p.m.]

As far as the reinvesting in rural communities, we are definitely

reinvesting in rural communities. I gather the member’s question is

around the criteria for the rural dividend fund — the $25 million per

year that this budget allocates for the next three years, so $75

million. The criteria have not changed.

D. Barnett:

Thank you for that answer.

Back to rural development. Will there be a new advisory council?

If there will be, how will the council be chosen?

Hon. D. Donaldson:

Again, I’m not going to speculate. The report will be out soon.

The people who participated in the extensive engagement sessions have

made recommendations around how they would like to see rural development

input organized in relation to advice and strategies and co-development

of policies with the government.

D. Barnett:

Maybe it’s not true, but we have heard that the new rural strategy

will be one that will only be including local governments and First

Nations, that communities outside of local governments — independent

people who have societies, who have organizations that create many jobs

in rural British Columbia — will not be included in the new rural

strategy. Is this going to be the case or not, Minister?

Hon. D. Donaldson:

That will not be the case. There have been key informant

interviews conducted, as well, with over 50 key informants and key

stakeholders interviewed for their knowledge, expertise and experience

in rural development. Some of the organizations that the member is

alluding to, ones that don’t include local government or First Nations,

have been key informants in the process so far.

D. Barnett:

Thank you, Minister.

You’ve put out the fourth phase of rural development projects.

Have they all been announced? When we did the rural development program

on this side of the House, it was one of our objectives to make sure

that the opposition MLAs knew when projects were coming to their

communities. Will your ministry keep the opposition MLAs informed as to

which projects will be delivered to their communities? As of today, for

the last round, we have been told nothing.

Hon. D. Donaldson:

I’m very happy to discuss the results of the fourth intake so far.

The fourth intake for the rural dividend fund closed December 15, 2017:

71 applications from the project development funding stream were

announced, for a funding total of $693,678, and 28 project awards for

wildfire-impacted communities, including special circumstance requests,

for a funding total of $3,809,518.

[3:25 p.m.]

The rest of the projects that will be allocated funding under this

fourth intake will be forthcoming quite soon. Definitely, we will

endeavour to ensure that MLAs in whose constituencies these funding

awards have been allocated will get a heads-up.

D. Barnett:

Thank you, Minister. So far that has not happened. We have found

out by going to the media for what is happening in our communities. We

certainly would appreciate a heads-up, as our communities also are very

engaged with us on this side of the House.

My colleague from Cariboo North has a question, so I’ll turn it

over to my colleague.

C. Oakes:

To the minister, first, I did read the press release today around

rural dividend funds that were distributed. Thank you. We do certainly

appreciate the announcement, and the support is appreciated.

A few questions, if I may canvass, are just follow-up questions

from estimates raised around this in the fall. For many of the

communities or individuals that were affected, specifically

guide-outfitters and trappers, they were looking…. The only opportunity

for a funding source, really, for these specific sectors was through the

rural economic development funding pot. We had canvassed the

opportunity, perhaps, to have small businesses being able to access

funds as it correlates to FLNRO files, such as guide-outfitting

territory.

Again, I reviewed the update this morning. It looks like it’s all

local governments and First Nations communities. I didn’t see any

individual announced through economic development. Could the minister

perhaps update us on what individuals, for example…?

I’ll start with guide-outfitters. Specifically, Stewart Fraser has

raised on multiple occasions that he is still waiting to hear back from

the FLNRO office. The conversation started in December. The request is a

continued, “We’ll get back to you. We’ll get back to you,” and we

haven’t still heard. Can Stewart Fraser and guide-outfitters expect any

funds through the rural economic development strategy?

Hon. D. Donaldson:

Thank you for the question. It’s an important part of what

government is there for — to assist people after, really, a natural

disaster. Many guide-outfitter territories were impacted, some more

severely than others.

Under the criteria that the previous member just questioned on

around the rural dividend, you’re right. Individuals don’t qualify

currently under the criteria around rural dividend. We do have, under

our socioeconomic recovery line within the ministry, our agreements with

the Canadian Red Cross, which has funding available for small

businesses. They’ve handed out a substantial amount of money under that

category. They’re still able to consider further applications under the

small business part of the Canadian Red Cross.

We’re also working with guide-outfitters on options around

permitting and fees and those kinds of things. So we’re open to creative

thinking around this.

[3:30 p.m.]

C. Oakes:

One of the elements around the rural dividend was special

circumstances, and one of the things that we had canvassed in the fall

was looking at how individuals may work with organizations around

special circumstances.

As it pertains, again, to guide and outfitters, where tenure is

purchased through the province, does the minister have funds to, in

fact, support purchasing back the tenures of guide and outfitters? In

particular, one of the guide and outfitters in our area lost their

ranch, lost their property, lost their guide-and-outfitting territory

and had to return the $80,000 worth of hunts that they had already

presold. Now they are supposed to be doing trade shows in

April.

They’re waiting to hear back from FLNRO on what to expect this

season. They had the significant hit from last year. They’re faced with

significant challenges heading in, April 1. Is there clarity? Is there

support? Is there something that individuals can expect through the

rural dividend?

Hon. D. Donaldson:

Thank you for the specific case you’re talking about and the

applicability it might have to other cases as well. Of course, on this

specific case, if you would like to encourage the individual to get in

touch with the ministry, we’d be happy to meet with them about the

challenges they’re facing.

Some of the questions raised deal with things like: was insurance

available for some of the losses? That’s one of the first things that’s

looked at when claims are made — were they insurable items? Again, with

the Canadian Red Cross support to small business — they have an

allocation of $29.1 million, and $6.8 million has been spent and

committed so far. So there’s still availability through that line. We’re

also looking at, with some affected guides, for them to be able to

provide hunts outside their guiding area.

I would encourage the member to ask the individual to get in touch

with us directly, and we can explore options. The option of purchasing

back guiding territories has not been put on the table, as an option, to

Treasury Board at this point.

C. Oakes:

Thank you very much, Minister. The particular case that I did

identify had reached out in December to FLNRO and were asked to wait

until February for a follow-up and are still waiting.

Where they want to sell the hunt is clearly in the FLNRO

jurisdiction, and they are trying to figure out what they’re going to do

as of April 1. If we could expedite that — and I know our office has

sent a letter — that would be appreciated.

[3:35 p.m.]

Moving now to trappers, are trappers available through the rural

dividend? Again, when we canvassed in November, many of the files that

we brought forward we were directed to put in the community’s wildfire

response to communities. Are there going to be extra funds announced?

Looking in the budget, obviously we did not see that, so I assume that’s

coming through the rural dividend. Is there funding allocation or

opportunities for trappers through the rural dividend?

[L. Reid in the chair.]

Hon. D. Donaldson:

The same criteria apply that have been in place for the rural

dividend fund, so individuals are not eligible at this point. But

trappers are small businesses. Again, I direct the member to the fact

that we’re addressing small businesses. One of the tools is through the

Canadian Red Cross and the support to small business program of $21.9

million.

We are definitely exploring other opportunities, as well, with

those trappers who have seen significant damage to their traplines

through the wildfire season. That’s something we’re doing in the short

term.

In the longer term, of course, recovery and resilience initiatives

will ensure that the land is rehabilitated to the state that enables

trappers to undertake what they’ve done as their livelihoods. But I

fully recognize that that’s a long-term view. In the short term,

trappers can seek assistance through the Canadian Red Cross small

business program as well as directly with our ministry, in specific

cases, to explore some other creative opportunities.

C. Oakes:

In the previous answer, the minister opened up the opportunity for

guide and outfitters to look at other areas, perhaps — where guides and

outfitters who may have lost significant territory might be offered

hunts in other areas. Could the minister provide more detail?

Hon. D. Donaldson:

I just want to say that we’re working hard as a ministry to

accommodate the impacts of the wildfires on guide-outfitters and

trappers.

[3:40 p.m.]

As far as the guide-outfitters go, and looking at hunts in other

areas, that would obviously be something that has to be coordinated with

people who already have guiding tenures proximate to other areas, as

well as in consultation with First Nations, and it would be

species-specific. We don’t have a policy framework for that yet. We’re

trying to deal with it and trying to assist people on a case-by-case

basis.

C. Oakes:

One of the challenges, or the opportunities, around economic

development in rural communities is significantly impacted by

transportation corridors or forest service roads. A significant amount

of damage did happen due to the wildfire seasons. We had the opportunity

to canvass, through the Ministry of Transportation, funds for damaged

road networks, due to the wildfires, that lead to key economic

development opportunities in our region.

Are there funds through the rural dividend or through the rural

strategy, specifically, to invest in those forest service roads or

transportation connections to key economic drivers?

Hon. D. Donaldson:

Again, rural dividend criteria…. If a transportation element is

part of an application by an eligible applicant, then that can be

considered. It does not include the maintenance for service roads in the

rural dividend fund right now.

Having said that, transportation has been an element of some of

the projects in the past in the rural dividend fund that have been

approved. As well, we have a modest budget within our ministry for

capital projects on forest service roads and replacement of structures

and maintenance.

C. Oakes:

How much of the small amount of money in the budget do you have

for the rural roads that you just mentioned?

[3:45 p.m.]

Hon. D. Donaldson:

I suppose “modest” is always a relative term when it comes to

dollars, but in the bigger picture, it is a modest amount. It’s $13

million per year, our engineering program, that we have for capital

funding. It’s deemed as sufficient to date. To date, we’ve expended less

than $500,000 to repair and replace bridge structures. That’s the

overall capsule that we have for the engineering and capital funding

work.

C. Oakes:

The experience in Slave Lake, what they found after the

significant fire…. Because the forest service roads use plastic

culverts, one of the challenges that we had on a lot of the side road

issues was that the culverts had melted. Come spring, we are going to be

faced with a significant challenge to a road network.

While $13 million may seem like a considerable amount of money,

what I can say is that one bridge is $500,000. So when we’re looking at

the context of $13 million and a significant amount of hectares that

were affected by the wildfires…. These road networks are critical. This

capital asset is critical to economic development, through tourism,

mining, placer, ranching, forestry. What is the plan?

Hon. D. Donaldson:

Post-wildfire risk assessment has been done throughout the area

that the member represents, as well as throughout the Cariboo. All of

those risk assessments are complete, including road and drainage

assessments. Priority areas have been identified around the freshet risk

— in other words, the risk of erosion impacts from the spring melt.

Those risks are able to be addressed under the current budget the

ministry has.

However, we do share the concerns that if there are unforeseen

circumstances — due to weather issues, for instance — we will ensure

that we make submissions to Treasury Board to address those.

C. Oakes:

Then this risk assessment and the drainage piece — would that come

under the $13 million, or would that be a separate line item in the

budget? If so, what is that amount?

Perhaps a secondary question that ties in with that. Slope

stabilization is going to be a critical component, as well, to the road

networks. Would that fall under your ministry or the Ministry of

Environment? Are there allocated funds for that?

[3:50 p.m.]

Hon. D. Donaldson:

The impacts from this wildfire are considered unforeseen events as

far as the core work of the ministry goes, budget-wise. Where it is

addressed, the assessing ongoing risk and rehabilitation, is under the

next vote, under the B.C. Wildfire vote. Therefore, the work that has

been done in this past fiscal year was under that — over $600 million in

direct costs of addressing the wildfire situation. That’s where the risk

assessment dollars came from as well as some of the rehabilitation work.

Similarly, as we go forward into this coming fiscal year, that’s where

the funds will be allocated from.

Hon. M. Farnworth:

I don’t do this very often, but I ask leave to make an

introduction.

Leave granted.

Introductions by Members

Hon. M. Farnworth:

In the gallery and in the precinct today are four classes from one of

the best elementary schools in Port Coquitlam, Cedar Drive. I had the

pleasure of meeting the students and their teacher. They asked some amazing

questions, including, “You guys aren’t fighting in there? I thought you guys

fought,” as one little kid asked me. I said: “No, no, no. There’s a lot of

good debate.” They were great students with great questions.

I’d ask the House to please make the kids from Cedar Drive Elementary

most welcome.

Debate Continued

C. Oakes:

The reason I’ve been canvassing the question around side roads or

transportation corridors as they lead to economic development is I

noticed in the press release today that through the rural dividend, a

significant amount of funds was given to promote or educate people on

the…. There is a road that’s being….

Work is being done in the city of Quesnel on our main street. We

have an economic development rural dividend fund, I think to the tune of

$68,000 or $63,000 — excuse that I don’t have the exact amount — that we

are providing funds to local governments or to organizations to talk

about roads that work is going to be done on. Could the minister provide

more detail or clarity on how roads get through the rural dividend

program?

[3:55 p.m.]

Hon. D. Donaldson:

I want to thank my assistant deputy minister, Dave Peterson, because

there were a lot of projects approved.

The specific one that the member is referring to, one of the ones that

was approved for Quesnel, was through Quesnel and the downtown business

association. That money was targeted for ensuring that an advertising

campaign went out to make people aware that the downtown businesses were

open for business while road construction work was undertaken. That was the

aspect of that application.

C. Oakes:

In estimates in November, we canvassed the critical need for emergency

roads — again, both from an economic development perspective but as an

emergency…. We talked about the work that Lhoosk’uz Dené, Nazko and Lhtako

have put forward for the Blackwater Road connection.

Can the minister please update us on when that project will be

starting?

Hon. D. Donaldson:

Well, I’m happy to report that $7 million in capital funding is now in

place to support their two connector projects, which the member is referring

to, with the Lhoosk’uz Dené.

What we’re embarking on right now is an engagement with the First

Nations communities around route selection. We’re engaged on a planning

phase on engineering for design options. Of course, much of this engagement

work with the communities also relates to the issue of caribou

habitat.

Happy to report that the $7 million is in place now. We’re going to be

starting the engagement work with the communities, looking at commissioning

design options and route selection.

C. Oakes:

Is that part of the $13 million, or is the $7 million in

addition?

Hon. D. Donaldson:

It’s in addition to the $13 million.

[4:00 p.m.]

C. Oakes:

I know that this is a long-awaited project. We really look forward to

that moving forward, so thank you very much on behalf of the First Nations

communities that live out there.

Another emergency access point that is of critical concern and that

has been brought forward is the Purden connector. The Purden connector is

for folks who live out in Bowron Lake and Wells. When we saw significant

fire activity, one of the challenges that we have out in that area is that

there is no other emergency exit point. I am wondering if the Purden

connector would be available to apply for any of the programs that the

minister has discussed today.

Hon. D. Donaldson:

I recall this topic well. I remember meeting with the regional

district representative, having maps laid out and having a look at the

Purden connector. This is a separate topic from the last one we talked

about, which was capital funding. I believe that that $7 million came

through the Ministry of Transportation.

We well understand the concerns, and if that project were packaged as

part of a tourism initiative, an economic initiative through Tourism, then

it could conceivably be submitted under the rural dividend fund. But the

rural dividend fund generally is up to $500,000. Road work takes a lot of

money, and it’s something that we’re well aware of the concerns

on.

C. Oakes:

It’s a less expensive project, where I think there’s only seven

kilometres left to connect on the road, and I think it’s $3 million. So I’m

putting that out there as a really good, important economic generator for

the region. I will provide that advice to the district of Wells, about the

opportunity for putting that in through the rural dividend

program.

My final question. It could be just the challenge on the rural

strategy or the rural dividend application. I think what I heard earlier was

that December 15, 2017 was the deadline of the applications that were

announced this morning, and I think the wildfire community consultations

have just wrapped up. Maybe that’s where the disconnect is, but our

volunteer fire departments — critically important for the safety of our

communities — really needed support in this budget with equipment caches or

some really basic supplies.

We’d canvassed that through all of the ministries back in November.

Really, the rural dividend is probably our only option to support these

volunteer fire departments with accessing capital to support things like

general capital purchases.

Was it just a disconnect on the timeline of December 15 — that we

didn’t see any volunteer fire departments, as non-profits, receive any rural

dividend funds? Can they still apply for the next phase, and when would that

deadline be?

[4:05 p.m.]

Hon. D. Donaldson:

To our knowledge, we didn’t receive, in this last call that finished

December 15, any applications from volunteer fire departments, from

non-profits. The ability for those organizations, which…. The member has

done well to highlight the challenges faced by those volunteer fire

departments when it came to the wildfire season, and the equipment needs and

some of the equipment that got consumed during that.

There’s still the ability for them to apply under special

circumstances. I have the ability outside of the actual, general period,

which is often a month, to receive applications. That regular opening call

for applications will be conducted again in the spring, after this budget

has been presented.

There is also the ability, under gaming grants, which should be

examined by volunteer fire departments. Funding through the Ministry of

Municipal Affairs, gaming grants, is a source as well. I don’t know if this

was canvassed under the minister responsible for emergency management B.C.,

but that was another possibility. Those are some options.

I just want to say thanks to the volunteer fire departments, because

they keep my community safe as well.

C. Oakes:

Thank you to the minister. I know that you recognize how important our

volunteer fire departments are. We need to get all of our communities safe.

We need to be prepared, and we’ve got a really short window. Community

gaming grants for public safety — that next intake is actually August. By

the time that intake happens, we’re already into another wildfire

season.

I will report back, during our constituent week, that volunteer fire

departments can put in the special circumstance. I think it’s critical. It’s

in all of our best interests, both from a safety perspective and from an

economic perspective, to ensure that our communities are ready and prepared

for this upcoming fire season. So any work that the ministry can do in

partnership to support that, I think, is critically important.

That ends my questions around rural economic development. Thank you

very much.

D. Barnett:

Economic development is not just putting new projects out. Economic

development is existing and retention. With this new budget that has come

out — and you are, of course, putting together a new economic strategy — I

sincerely hope that in your work, there will be policies put in place that

are going to protect some of our existing industries.

An example I will give to you of economic development in rural British

Columbia, of course, is forestry, which is a huge part of the

Cariboo-Chilcotin. With the new health care tax and the new carbon tax, I

have had many phone calls from logging contractors who, through the past

wildfires, did not work for 3½ months. Some of them went out and fought

fires, but the rate they are paid was enough, basically, to pay for their

help, pay for their fuel and their equipment.

[4:10 p.m.]

With these new taxes coming in, many of them will not make it very

long in the future, and many of them are thinking that if there is not some

assistance and some changes for these businesses, which are rural economic

development, they will not be there. They will be at the auction

sale.

Through your new economic strategy, are you looking at policies for

retention of existing businesses?

Hon. D. Donaldson:

I just want to thank the 800-plus contractors that assisted with the

wildfire efforts, many of them in the member’s constituency.

Also, to talk about the forestry business, we have many tools within

the ministry to ensure that local contractors and local businesses that

depend on forestry are supported in that. The main tool is the management of

the forests. We expedited 1.3 million hectares of fire-impacted wood, got

them under cutting permits, since the wildfires happened last season. I

think that’s an incredible amount of wood. Of course, if you’re an

associated business, with hauling wood or harvesting wood, then that means

certainty around work and getting a paycheque.

So, yes, under the rural development strategy, one of the top things

on my mind is ensuring that the existing small businesses we have related to

forestry are able to continue. Specifically from my ministry, that means

managing the resource in a sustainable manner.

D. Barnett:

That does not answer my question. This is an economic question. This

is rural development retention for existing businesses that through no fault

of their own and no fault of anybody, need assistance with policies, because

of the new health care tax and the carbon tax. Otherwise their equipment

will be going to auction.

Is there going to be something new in your rural development portfolio

to assist these existing businesses?

Hon. D. Donaldson:

The member can refer questions that are associated with the health tax

and small business taxes to the Minister of Finance during her budget

estimates.

We’re very concerned around contractors. We are awaiting the review of

the contractors’ sustainability report from George Abbott. As I said, the

best way, from my ministry and what’s under the jurisdiction of my ministry,

to ensure the viability of contractors is to ensure the viability of the

forest sector. That’s what we’re doing, as far as replanting areas that have

been impacted by forest fires, addressing forest health issues and ensuring

that cutting permits for fire-damaged timber are expedited.

D. Barnett:

I would like to really congratulate your staff in the

Cariboo-Chilcotin forestry regions. They’ve done an amazing job of getting

permits out and doing the great work they do.

Still, under rural development, if we can’t keep existing businesses

and retention, then we really are failing with rural economic development. I

will ask the minister one more time: will there be policies within your new

strategy to help retain existing businesses in rural British Columbia, such

as logging contractors, etc.?

Hon. D. Donaldson:

The rural development strategy is being created from the ground up

through the engagement process I outlined earlier in the

discussions.

[4:15 p.m.]

Key informants have been interviewed. People in communities have been

engaged. There have been over 3,000 site visits to the engagement website.

So I’m not going to presuppose what’s coming out of that engagement. That

will be a publicly available document, and we can go from there.

Contractor sustainability is an issue throughout the province. It’s on

my mind, and that’s why we’re currently reviewing — the contractor

sustainability review that George Abbott is conducting. There likely could

be policy recommendations that come out of that — in fact, I hope there are

— to address contractor sustainability. Once those are reviewed, then I will

be able to discuss them publicly.

D. Barnett:

I understand that Mr. Abbott has signed off on that review. Could you

please tell us when that review will be publicly released?

Hon. D. Donaldson:

The report, the review by George Abbott, is being analyzed within my

ministry. I haven’t seen it yet. When I do see it, then I’ll be able to give

direction about public policy initiatives that will arise out of it. I’m

anxious to get it out the door.

I know, having met with the Truck Loggers Association, for instance,

on numerous occasions, and knowing from the local contractors in my area,

that there are some major concerns about survival within the industry. It

goes to the point that the member is raising about retaining existing

businesses, which is essential.

There are areas of the province where, for example, the timber profile

that’s already allocated has not been able to be harvested and brought to

mills as soon as what we would like because of a lack of contractors. I know

that’s been happening in the area that the member represents. So I’m anxious

to get the review out as soon as possible.

D. Barnett:

Will that report be released publicly?

Hon. D. Donaldson:

Thank you for the interest in the report. Generally, any

recommendations that are approved out of my office that are based on the

report will be made public.

I just want to give the caution around release of the full report,

because there might be some legal implications around the softwood lumber

agreement. We want to be careful with that part, because we don’t want to

damage our case in front of NAFTA and some of the appeals we’ve

launched.

I want to assure the member that I believe in transparency and that

the recommendations that stem from the report that I’m going to put forward

will definitely be publicly available.

D. Barnett:

Back on October 16, 2017, when we were doing estimates, I asked you a

question about the rural dividend fund: would it become a fund for floods

and wildfire issues? You commented: “The remaining rural dividend funds that

will be distributed are not a disaster fund. I want to assure the member

that that’s not how we’re going to typify it. It is not directly associated

as a disaster fund or a recovery fund.”

[4:20 p.m.]

One of the concerns I have, Minister, is that all our areas — our

communities; our rural areas; our citizens, of course — are concerned about

wildfire mitigation. I see the announcements which came out from the

government through the fourth intake of the rural dividend fund did include

some wildfire mitigation in a particular community.

My question to you, Minister: now that the gates have been opened on

the rural dividend fund to do wildfire mitigation, will it be one that is

going to continue on? Can every area and society that is concerned about

wildfire mitigation use this fund as that?

Hon. D. Donaldson:

I stand by the fact that the rural dividend is not a wildfire recovery

fund. Having said that, there are special circumstance applications that are

special circumstances. I’m happy that $3,809,518 was awarded to

wildfire-impacted communities.

Some of the proposals might have been funded even if there hadn’t been

wildfire situations. It’s impossible to artificially separate out the

situations related to wildfire and not wildfire. I want to make sure that

the member knows that $693,678 was awarded during the project development

funding stream. The other $3,809,518 was under special circumstance

requests. In this budget, there is an uplift of $72 million targeted at

wildfire recovery and wildfire resilience activities.

D. Barnett:

Minister, I appreciate the assistance that our communities are

getting. My question was not about projects that are being funded in

communities with wildfire. My question was about the wildfire mitigation on

a corridor, which means wildfire mitigation to protect the community against

other fires. The rural dividend fund is there to create jobs, and the

wildfire mitigation is there to protect communities.

My question to the minister is: is this fund going to be utilized for

wildfire mitigation to protect communities, or is it going to be used for

rural economic development?

Hon. D. Donaldson:

The $72 million that I highlighted already — which I’m sure we’ll get

some further questions about, because it’s a good-news story — is associated

with one aspect, wildfire resilience. The rural development fund is not

specifically targeted for wildfire resilience. That’s not the specific

purpose of the fund. However, sometimes there is some overlap. Some of the

projects that have been approved might have offshoots that mean employment

in those kinds of activities, but it’s not the target of the rural

development fund. The target for wildfire resilience is the $72 million in

uplift of the budget that I alluded to previously.

S. Bond:

Good afternoon, Minister. I have a number of questions. I want to

build on some of the questions that my colleagues have asked, and there may

be a bit of repetition, but that never hurts.

[4:25 p.m.]

I might as well just start where we left off with the member’s

questions. The issue of the rural dividend and the fund that’s available is

certainly not about being critical of supporting wildfire recovery in

British Columbia. Our community, as a recipient of thousands of evacuees and

stepping up on a daily basis, certainly understands that.

The concern — or, at least, the clarity we’d like — is the size of the

pie. There are a lot of rural communities that require assistance in terms

of rural economic development. If there is a blurring of the line, where

we’re suggesting now that: “Yes, there may be overlap. And we’re going to

put a few other here. And yes, there is special circumstance funding….” The

point is that there has always been far more demand in that fund than there

has been an ability to fund those projects.

Is there a cap on the special circumstances fund to ensure that as…? I

can’t imagine, I’m hopeful, that the entire size of the fund will grow. We

have increasing demand in rural communities. This fund plays a critical role

in communities that I represent. So is there a cap on special circumstances?

Is the minister advocating on behalf of wildfire recovery to receive

additional funding rather than taking it out of the rural dividend

fund?

Hon. D. Donaldson:

Thank you for the question. I acknowledge, as well, the citizens of

Prince George who reached out, above and beyond, to host — I think at one

point it was 9,000 — visitors from fire-impacted zones. I know the member

was volunteering at some of the evacuation centres as well. I just want to

make sure that people know how welcoming Prince George citizens were for the

people in the province that were in need.

There is additional funding addressing wildfire recovery and wildfire

resilience that I advocated for. That resulted in a $72 million uplift to

the budget for those two particular areas.

I fully agree with the member that there is way more demand in rural

areas than what’s available within the rural dividend budget — and an

increasing demand. The rural dividend fund is not being used as an

alternative to address wildfire recovery. However, if a community makes an

application for a legitimate project and there’s job creation involved from

that, then it’s something that we want to consider in a balanced

approach.

I didn’t get to the cap on special circumstances. I understand where

the member may be going. You have a rural dividend with certain criteria,

and you want it to be used for those criteria. You don’t want it overly

allocated for special circumstances that are a result of an emergency

situation.

There is no cap on special circumstances funding within the rural

dividend envelope, but we make those balanced decisions.

[4:30 p.m.]

S. Bond:

Thank you to the minister for his response. It is

appreciated.

I think the fact that the rural dividend is continuing is incredibly

important. I think that unless you are an MLA — and I certainly know the

minister is — that represents regions of the province that utilize this

fund, I’m not sure people understand the impacts of having a fund where

communities that are really struggling to try to sort out what they look

like in the future need that kind of assistance.

I do appreciate the ongoing nature of the program. Certainly, I would

agree with the minister. We know that there needs to be a particular

emphasis when there are circumstances that warrant that, which are very

extreme. I just want to make sure that the principle of the rural dividend

fund remains intact, which is making sure that communities that are

grappling with their rural economic issues have those kinds of funds

available to them. You know, shrinking the pot.

I think the minister described it well. It’s not an alternative

funding for wildfire recovery. That’s really important. It is an essential

issue, but it needs to be paid for. And the investments that the government

makes need to pay for wildfire recovery. So I appreciate those answers, and

I’m sure that my constituents will feel more comforted by the fact that the

program will be ongoing and there will be room for communities that haven’t

faced catastrophic circumstances.

I want to pursue the rural development strategy. Kudos for continuing

the rural dividend initiative. Not so many kudos for embarking on a whole

new rural strategy. I know that a great deal of time and effort was taken by

a lot of people to create a framework and a discussion around the rural

strategy that was put in place by the previous government. Times change, and

we’re going to see a new one, I guess.

The minister reflected on what might be public and what might not be

public. This was a public consultation process in terms of the strategy that

was going to be created. The input, as I understand it, closed on February

28, so can the minister be a bit more specific about the timeline within

which we might see a public strategy?

Rural communities are challenged today, and they don’t have a lot of

time to sit around and wait for governments to have conversations. They need

strategies that are going to bring benefit. Could the minister be a bit more

specific with what the next steps are, now that the information session

gathering time has closed? What can we expect to see and when?

[R. Chouhan in the chair.]

Hon. D. Donaldson:

The public consultation actually…. The public input is on the website.

It was available till March 7, and the final face-to-face engagement session

is in Prince Rupert this Friday. We haven’t quite wrapped up the final parts

of the public consultation.

We want to make sure…. I fully understand the member’s perspective

about rural communities facing a lot of challenges and not wanting to wait

around for the government’s strategy. Having recently joined government, I

understand things take longer to get moving than many people would like to

see. However, we’ll have that public strategy available later this

spring.

S. Bond:

Again, a complete strategy will be laid out that will then be shared,

I’m assuming, publicly. Will there be a feedback loop for communities and

people who had input, provided suggestions? I’m assuming there will be some

sort of communications plan where this strategy will go out and the minister

will receive some direct feedback about how communities feel about whether

they were heard or not.

[4:35 p.m.]

Hon. D. Donaldson:

We are going to go back to the public with: “This is what we heard.”

It won’t be, I think the member said, a complete strategy. We’re not going

to go back with a complete strategy. We want to make sure that we let people

know that this is what we heard so they have confidence and trust that this

is the

summary of what they provided as feedback. That will happen publicly

in the spring.

S. Bond:

Thank you to the minister for that response. I think people will be

pleased that they’ll have an opportunity to see their comments or ideas

reflected. I think that’s an important part of the process.

I want to ask a more broad question about economic development. I

think one of the concerns that, certainly, I’ve had as a legislator, over my

time here, is the whole concept of ministries that work in isolation from

one another. It takes a great deal of effort to make sure that there are

cross-ministry approaches.

I think that when it comes to rural development and rural economic

development, it’s one of the critical areas, where it is not a stand-alone

ministry — because transportation networks matter, all of those things that

contribute to a community’s ability to grow and to develop an

economy.

Does the ministry have a process where they work across ministries in

government to be advocates, to be champions for looking at how communities

can grow and develop?

Hon. D. Donaldson:

Yeah, I mean, I agree with what the member has stated as far as the

cross-ministry importance of rural development. It impacts from Health, from

Education, from Transportation, from Jobs, Trade and Technology.

I believe the member, when she was a cabinet minister, used to have

the regional economic officers under her ministry. That’s another way that

we coordinate, through what they hear in the field. We have a deputies

committee that is able to provide some coordination.

Also, what we’re hearing back from the engagement, some of the

comments that I’ve seen, is that people in rural communities want to see

that level of cooperation, and they want to see mechanisms around how that

can happen. I’m confident that will be part of the public document that we

file this spring in order to get feedback to make sure that people’s

comments are heard. Then we can move on from there as far as, if we need new

structures, developing that coordination.

I couldn’t agree more that rural development is not in a silo. It’s

part of everything, yet you don’t want to say: put the rural development

label on every single government announcement. That waters down what it

actually means. So coordination is essential.

S. Bond:

I think the minister has made my point for me. Our communities, where

they are grappling with capacity issues…. For example, if you live in a

community that has 600 people in it and you’re desperately trying to think

about how you create an economy and grow the number of jobs, you don’t have

time to be running to six different ministries.

There needs to be that overarching principle so that all of the

component pieces lead to an economic development strategy for those

communities. I’m glad to hear that there is at least that recognition — that

it’s not just about me asking. It’s about communities where…. Grant writing

— all of those kinds of things are very challenging for small communities

that we represent. I know the minister would be well aware of that from his

own circumstances.

[4:40 p.m.]

I look forward to seeing that reflected in some of the discussion that

takes place. It is important to have a rural lens. There are lots of lenses

that need to be applied, but obviously the one I care about very

passionately is that there does need to be a rural lens. Things are done

differently in different parts of British Columbia.

If I could get just a bit more specific about a couple of issues. The

critic has been very generous with his time. So I don’t want to…. Many

colleagues are waiting.

I wonder if the minister could give me an update on the McBride

community transition process, from his perspective. Just a brief reminder

that the major employer in our community of McBride burned to the ground, a

mill. People have been resilient and working hard, led by the village

council and others. But I want to be assured that there are still resources

on the ground. Economic recovery doesn’t take place overnight or in two

weeks or six weeks.

I’m wondering if the minister could just give me an update, from his

perspective, about the resources on the ground and whether progress is being

made.

Hon. D. Donaldson:

There’s lots to say, and I’m aware of the time constraints as well. We

did meet with members of McBride municipal council during UBCM, as well as

those who were in charge of the community forest there. I’m happy to report

that the mill that did burn down has recently reopened, the BKB mill, and

our regional economic development officer had assistance in that happening

and continues to work with McBride on that.

S. Bond:

Yes, we are celebrating the mill reopening, and it’s mainly because of

the incredible determination of the owner and the family that operates that

mill. I’m extremely proud of them. I also want to express my gratitude to

the people, the team. Our economic development officer on the ground is

exceptional and loves the valley as much as I do. I think that’s a pretty

important piece of making sure that progress is made.

I just wanted to bring it to the minister’s attention to make sure

that we don’t assume that we can transition out of that kind of support

quickly. It’s a matter of a longer-term process. And I do want to thank the

team of people who have been very helpful and encourage them to stay

connected to McBride to look for ways…. Tourism, all of those kinds of

things are incredible opportunities in that valley. I appreciate that

update.

The other update that I wouldn’t mind hearing a little bit about…. I

know that in many ways, no news is good news, in the sense that we don’t

want to have issues created. But I’m wondering if the minister is familiar

with Valemount Glacier development. As he would know, we have a plan that’s

been signed off. Have there been any other issues identified for the

minister about that project moving forward? It’s exciting. It’s skiing on a

glacier that would be unprecedented in the world, frankly. It has great

potential.

Again, the whole economic development piece — it’s transportation,

it’s communication, it’s making sure there are proper Internet connections,

all of those kinds of things. I wanted to make sure it was on the minister’s

radar screen and wanted to know if he was aware of any concerns or anything

that might jeopardize that project moving forward.

[4:45 p.m.]

Hon. D. Donaldson:

Yeah, that’s exciting — Valemount Glacier destination resort. I don’t

know if I should really be too particularly biased, but as a skier, I’m

pretty excited about that kind of development and also excited that it falls

within the jurisdiction of my ministry.

The Simpcw First Nation in the area…. The member will probably be

aware that that land transfer, as part of accommodation, just happened this

past week. That was another step in the process, an important step, in order

to gain First Nations’ support and recognize the interests of that First

Nation.

We don’t see any other large impediments in place as far as government

is concerned. The exact timing of the development is ultimately dependent on

global economic conditions and the capital investment that the developer is

trying to attract. That’s the update that I can provide. We hope that the

global economic circumstances are going to lead to investment in the

project.

S. Bond:

I certainly recognize that, and we know that investors and the

developers are doing their job. I’m very optimistic about the project and

continue to be. I just wanted to make sure there are no government

impediments. I know that previous FLNRO ministers have spent a lot of time

with me on this file. I’m sure that many of the staff with the minister know

how many times I visited that office to make sure that we move this project

forward. I want to make sure it continues.

My last question I will just leave with the minister if he doesn’t

have the answer at the moment, because I realize our theme is economic

development. But rather than take up another

section of time at some

point….

I am very hopeful that the minister and his staff have been able to

sort out the issue related to a lease for the Canadian Mental Health

Association, which falls under FLNRO. I brought the issue to the minister’s

attention on October 30. I was assured, in January, that it would be about a

month, so I’ve held off until today, in estimates.

It seems like a simple transaction. This organization wants to make a

significant investment in a property that they have actually leased for

literally almost three decades. It is a matter of transferring and allowing

an organization which is doing fantastic work in our community to secure the

ownership of that house so that they can make an investment in incredible

programs.

I know the minister is aware of it. He has written me several letters,

which I’ve been appreciative of. I am just hoping that we could get a

positive answer and allow this organization to move forward.

Hon. D. Donaldson:

Thank you to the member, and yes, I recognize her as a great advocate

on this particular issue because we’ve received her correspondence. I’ve

read it and replied.

What I’m hearing from my staff now is that it’s been reviewed. It’s in

process, and within the next week or two, there’ll be an answer.

S. Bond:

Well, thank you. I will let the Canadian Mental Health Association in

Prince George know that we are now to the runway of one to two weeks, and

hopefully, we can get to this a yes. I can’t imagine how it would be a

difficult issue.

With that, I want to thank the minister and, particularly, the staff

for their assistance, particularly the economic development officers that

are out in our regions. We appreciate them. We’re glad to see that there’s

still an investment in supporting communities in that way. I appreciate the

time of the minister and his staff this afternoon.

D. Barnett:

One of the concerns I have is in your budget. Could you identify for

me what travel amounts and what other amounts are going to be in, for three

years, for your new advisory council and your staff?

[4:50 p.m.]

Hon. D. Donaldson:

The structure of the next iteration of how we as government receive

input from rural advisers within communities and co-develop policy with them

has yet to be determined because that’s part of the public engagement

process. As I said previously, those results will be made public this spring

so that people who did participate can ensure that their submissions were

recognized and heard.

I can’t determine what structure that’ll be at this point, and

therefore, the travel amounts associated with that new body, however it’s

configured, are theoretical at this point. I don’t understand particularly….

I need a little bit further clarification on the question around staff. If

it was staff associated with supporting, if there is a need for that, again,

that’s yet to be determined. If it’s staff associated with regional economic

development operations, that’s within the core budget that exists right

now.

D. Barnett:

A question back to the minister regarding the budget. The question

that I’m asking you, to have a budget and….

Allocations are allocations, but there’s been no particular allocation

I can find to recognize what is going to be staff for rural economic

development itself or for other pieces of your ministry. I would like you to

identify what is actually going to be there in staffing and assistance for

an advisory committee within rural economic development itself.

Hon. D. Donaldson:

Within our rural development sector, or segment, within government, we

have 19 regional economic development officers in that part of it, and we

have nine rural policy staff. So there are 28 who are currently working

within the ministry.

We’ve reorganized rural development into rural development, lands and

innovation because it came over from another ministry. The overall budget

for that part of the core business is $55,968,000.

Now, we don’t have the rural development, 19 people and nine people,

broken out to a fine detail on that. But if the member would like that, we

can ask staff to break that out for us, and I can bring it back before

estimates are over.

[4:55 p.m.]

We also have an uplift, within this budget, of a new $500,000 addition

to the ’18-19 fiscal year budget around our rural development initiatives.

That will help support the structure and strategy that comes out of the

engagement process that’s going to be initiated this spring — not the

engagement process but the actual public document initiated this

spring.

D. Barnett:

Thank you, Minister. I would appreciate if the staff could break it

out and give it to me at a later date.

I’d just like to say one more thing. Right now I am very pleased that

we are carrying on with the rural strategy. I will be monitoring it very,

very closely. We do have a great strategy now, with all ministries

participating. Every ministry is part of rural economic development. You’re

very fortunate to have such a great staff with such great experience and

such great knowledge. I thank them. I look forward…. I will be on your case

if rural economic development is not something that is a high priority with

this government.

The Chair:

All right. No questions there.

Member for Peace River North.

D. Davies:

Thank you, Chair, and thank you, Minister. I know that we’ve talked a

few times about the Northern Rockies, Fort Nelson — some of the issues, of

course, that community is facing as one of the smaller rural communities in

my area.

I just look at the B.C. government website. “The government of British

Columbia is committed to working with our rural communities to strengthen

their resilience, create jobs and build unmatched economic opportunities.”

It goes on with that.

With that being said, there are so many opportunities right now, I

think, that we can build on, that this government can build on, around

forestry, tourism, agriculture — the potential of agriculture — tourism. But

right now there are none of those things happening, and Fort Nelson is

probably one of the most struggling communities, I think, in this province,

as far as communities go.

To the minister, is there any plan right now, with the ministry, to be

working with this community and to help follow some of the mandate —

strengthen their resilience, create jobs? What is the ministry doing to help

Fort Nelson right now?

Hon. D. Donaldson:

Thanks for the focus on an area of the province that has definitely

been hard hit. I’ve met with Mayor Streeper. I’ve met with the Fort Nelson

First Nation. Even the property values, for instance, are…. I think the

mayor told me it was down 40 percent. How can you survive that kind of a

hit? It’s a pretty big challenge.

The highest priority that the community has identified, as far as

resilience and building back the community, has been on the forestry front.

We’ve been working with the Northern Rockies regional municipality and with

the Fort Nelson First Nation to get a community forest tenure in place in

support of….

[5:00 p.m.]

What they’re both trying to do is attract an investor to restart the

OSB plant. That’s been the main focus of our work because that’s been the

priority that they say is highest for that community.

We’re also aware that there’s been a submission to the rural dividend

fund by Fort Nelson — by the Northern Rockies regional municipality as well.

But we’re doing a lot of work on trying to facilitate the fibre supply for

that OSB plant to restart. Of course, it’s going to take an external

investor. We’ve had an on-the-table offer to meet with any investors that

either Fort Nelson or the First Nations want to identify to us to discuss

the potential tenure opportunities.

D. Davies:

Thank you, Minister, for that. I know that you’re very aware of the

situation up there. I certainly appreciate that.

I agree. Forestry is going to be, I think, the quickest and easiest

way out, moving forward. But at the same time, I think this is what’s led

Fort Nelson down this path of relying on one industry, and then it folds,

and then…. That’s what happened. The forest industry was booming in Fort

Nelson, and then the gas came along. Forestry ended — and heyday with the

gas. Now it’s down again.

While it certainly is promising to see that the ministry is working on

the forest sector, I would want to make sure that we do also keep in mind

that these other opportunities need to not be forgotten about, whether it be

natural gas…. I get the whole business plan for the dry gas. That’s the big

issue that Fort Nelson has. But there are opportunities there moving

forward.

Tourism. There are 300,000 vehicles a year that go up and down the

Alaska Highway, through that community. Again, having your ministry reach

out and work with some of the organizations there to help capture some of

that into their communities….

Of course, the potential for agriculture, which I think is really

something that has a lot of potential in Fort Nelson…. We have some ranchers

up there already doing cattle successfully. Again, we don’t want to lose

those pieces that are going to help diversify Fort Nelson’s

economy.

Just to go back briefly, you had mentioned the community forest. I

know this isn’t really the forestry

section of this. The community forest,

which is being worked with the ministry and Northern Rockies and Fort Nelson

First Nation…. Again, there have been more delays in coming forward and

getting this community forest going.

I’m just wondering if the ministry can give us an idea when this

community forest, which I know the Fort Nelson First Nations and the

municipality are anxiously waiting to get moving…. If you can give me some

insight with that.

Hon. D. Donaldson:

We’ve extended the deadline for the application by those interested in

a community forest agreement to the fall, in order to work with them —

“them” being the Northern Rockies regional municipality and the Fort Nelson

First Nation — to actually land on the area that they want to apply for as a

community forest.

We’re doing a lot of work in that regard. As I said, we extended it to

the fall for the deadline for application. We’re hopeful and pretty

confident we can get the land question settled by then.

[5:05 p.m.]

On the other part about the diversity, absolutely. I’ve visited Fort

Nelson — not often, but three times, once driving. I did the circle route up

37 and then down the Alaska Highway. A beautiful area. Lots of potential in

the areas that the member outlined. He knows it well.

I would just want to add that one of the priorities of rural

development for me, and a strategy — and it will be dependent on what we

hear from the engagement process — is levelling out those ups and downs.

Rural communities become dependent on one source, overly dependent on one

source for their economic survival. When that flips, it can cause some

devastation. That’s what we’re seeing in Fort Nelson right now — so looking

at a strategy that will add resilience.

J. Rustad:

We’re coming to the close of rural development. I’ve got a couple of

last questions to ask, and then we’ll move on to canvass marijuana issues at

that point.

One question. Through all of this…. Often budgets are never really

asked about in estimates, but I do have a budgetary question. The budget for

rural development, lands and innovation declines each year over the next

three years. I’m just curious as to what the rationale is for the declining

budget on rural development.

Hon. D. Donaldson:

Thank you for the first question from the critic after a couple of

hours. I know we’re going to be talking a lot over the next few days. A

budget question, no less — just what we’re here for.

The budget facts that the member outlined have nothing to do with a

reduction in the rural development aspect of the budget. It’s really the

reorganization, where we’ve put rural development, innovation, and lands —

RDLI, we call it now — into a

section on their own. The budget decrease that

the member notes over the next three years is a matter of moving other

non-rural-development responsibilities into other core sections of the

ministry.

J. Rustad:

Thank you for that. I assume, though, that the additional decline also

isn’t reflective of salary increases and other types of costs that would be

in there. In any case, I’ll leave that one, unless the minister wants to add

any other comment.

I do have one other quick question, which is on the resource benefit

alliance. The minister and I have met on a number of occasions. I know that

the minister has met with the mayors and regional district reps up in the

northwest. It was a commitment, I believe, from the Premier, in terms of an

engagement with that group.

I’m wondering. I’m curious as to…. I’ll start off with one question on

it — to the minister’s perspective, I guess — as to where things are at with

the discussions with the folks from the northwest on the resource benefit

alliance.

Hon. D. Donaldson:

I know that we’ve attended meetings together with the Northwest B.C.

Resource Benefits Alliance.

[5:10 p.m.]

I’m happy to report that that aspect of negotiations with that body —

which, I believe, represents almost 30 different local governments in the

northwest and puts in a lot of fine work on trying to move their agenda

forward — lies now with the Minister of Finance. I think that’s an excellent

place for that proposal to lie, because really, they’re most concerned about

revenue-sharing. The current state of that proposal would be best canvassed

with the Minister of Finance.

J. Rustad:

Thank you to the minister for that. I look forward to asking the

Minister of Finance the question when those estimates come up.

With that, I just want to thank the rural development staff for their

prompt responses in the thorough discussion that we’ve had. Let’s move on

now to the next topic.

I’m going to be sharing this with a number of colleagues, with regards

to questions that’ll come up associated with marijuana. Perhaps one quick

question just to start. I understand that the Minister of Agriculture has

recused herself of this issue, which is appropriate for her to do, and the

responsibility falls on you. I also understand that it’s outside of what

would normally be within the ministry. My hope is that we will be able to

canvass a number of questions with regards to this.

The first question, just a very broad question, is: what does the

minister see as his role with regards to the issue of production of

marijuana or other components associated with the legalization of marijuana

in B.C.?

Hon. D. Donaldson:

Maybe we need another nameplate for this m