British Columbia Hansard — 9 April 2019, p.m., Issue 236 (41st Parliament, 4th Session)

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British Columbia — Debates (Hansard)

Fourth Session, 41st Parliament OFFICIAL REPORT OF DEBATES (HANSARD) Tuesday, April 9, 2019 Afternoon Sitting Issue No. 236 THE HONOURABLE DARRYL PLECAS, SPEAKER ISSN 1499-2175

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

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

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

Jinny Sims Minister of Education ............................................................................................................................................................ Hon. Rob Fleming Minister of Energy, Mines and Petroleum Resources ...............................................................................................Hon. Michelle Mungall Minister of Environment and Climate Change Strategy............................................................................................. Hon.

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

Scott Fraser Minister of Jobs, Trade and Technology............................................................................................................................ Hon. Bruce Ralston Minister of State for Trade...............................................................................................................................................Hon. George Chow Minister of Labour ...................................................................................................................................................................Hon.

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

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

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

Raj Chouhan Assistant Deputy Speaker................................................................................................................................................................... Joan Isaacs Deputy Chair, Committee of the Whole ................................................................................................................

Spencer Chandra Herbert Clerk of the Legislative Assembly ....................................................................................................................................................Craig James Acting Clerk of the Legislative Assembly...............................................................................................................................

Kate Ryan-Lloyd Clerk Assistant — Committees and Interparliamentary Relations ..........................................................................................Susan Sourial Sessional Law Clerk...............................................................................................................................................Loredana Catalli-Sonier, QC Parliamentary Counsel ...................................................................................................................................................................... S.

Suzie Seo Sergeant-at-Arms ................................................................................................................................................................................. Gary Lenz Acting Sergeant-at-Arms......................................................................................................................................... Randall Ennis, MMM, CD

ALPHABETICAL LIST OF MEMBERS Ashton, Dan (BC Liberal) ........................................................................ Penticton Bains, Hon. Harry (NDP)...............................................................Surrey-Newton Barnett, Donna (BC Liberal) ................................................... Cariboo-Chilcotin Beare, Hon. Lisa (NDP).............................................Maple Ridge–Pitt Meadows Begg, Garry (NDP) ..................................................................... Surrey-Guildford Bernier, Mike (BC Liberal) .......................................................

Peace River South Bond, Shirley (BC Liberal)......................................... Prince George–Valemount Brar, Jagrup (NDP)..................................................................... Surrey-Fleetwood Cadieux, Stephanie (BC Liberal)....................................................... Surrey South Chandra Herbert, Spencer (NDP) ..................................... Vancouver–West End Chen, Hon. Katrina (NDP).....................................................Burnaby-Lougheed Chouhan, Raj (NDP) ............................................................... Burnaby-Edmonds Chow, Hon.

George (NDP)............................................... Vancouver-Fraserview Clovechok, Doug (BC Liberal) ................................ Columbia River–Revelstoke Coleman, Rich (BC Liberal) ...............................................................Langley East Conroy, Hon. Katrine (NDP)......................................................... Kootenay West Darcy, Hon.

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

Doug (NDP).....................................................................Stikine Eby, Hon. David, QC (NDP)............................................. Vancouver–Point Grey Elmore, Mable (NDP)....................................................... Vancouver-Kensington Farnworth, Hon. Mike (NDP) ...................................................... Port Coquitlam Fleming, Hon. Rob (NDP) .....................................................Victoria–Swan Lake Foster, Eric (BC Liberal)........................................................... Vernon-Monashee Fraser, Hon.

Scott (NDP) ................................................ Mid Island–Pacific Rim Furstenau, Sonia (BC Green Party) ........................................... Cowichan Valley Gibson, Simon (BC Liberal) ................................................. Abbotsford-Mission Glumac, Rick (NDP)........................................................Port Moody–Coquitlam Heyman, Hon. George (NDP) .............................................. Vancouver-Fairview Horgan, Hon. John (NDP) ...............................................

Langford–Juan de Fuca Hunt, Marvin (BC Liberal) .......................................................Surrey-Cloverdale Isaacs, Joan (BC Liberal) .........................................Coquitlam–Burke Mountain James, Hon. Carole (NDP)...................................................Victoria–Beacon Hill Johal, Jas (BC Liberal)...............................................

Richmond-Queensborough Kahlon, Ravi (NDP)..............................................................................Delta North Kang, Anne (NDP)..................................................................Burnaby–Deer Lake Kyllo, Greg (BC Liberal)............................................................................ Shuswap Larson, Linda (BC Liberal) .............................................Boundary-Similkameen Lee, Michael (BC Liberal) ......................................................

Vancouver-Langara Leonard, Ronna-Rae (NDP) ....................................................Courtenay-Comox Letnick, Norm (BC Liberal)............................................Kelowna–Lake Country Ma, Bowinn (NDP) ................................................... North Vancouver–Lonsdale Malcolmson, Sheila (NDP) .......................................................................Nanaimo Mark, Hon. Melanie (NDP) ..................................... Vancouver–Mount Pleasant Martin, John (BC Liberal)......................................................................

Chilliwack Milobar, Peter (BC Liberal).................................... Kamloops–North Thompson Morris, Mike (BC Liberal) ..........................................Prince George–Mackenzie Mungall, Hon. Michelle (NDP).................................................... Nelson-Creston Oakes, Coralee (BC Liberal) ...........................................................Cariboo North Olsen, Adam (BC Green Party)........................... Saanich North and the Islands Paton, Ian (BC Liberal)......................................................................... Delta South Plecas, Hon.

Darryl (Ind.) ..........................................................Abbotsford South Polak, Mary (BC Liberal) ............................................................................ Langley Popham, Hon. Lana (NDP)..............................................................Saanich South Ralston, Hon. Bruce (NDP) .......................................................... Surrey-Whalley Redies, Tracy (BC Liberal) ..................................................... Surrey–White Rock Reid, Linda (BC Liberal) ................................................

Richmond South Centre Rice, Jennifer (NDP) ............................................................................ North Coast Robinson, Hon. Selina (NDP) ....................................... Coquitlam-Maillardville Ross, Ellis (BC Liberal)..................................................................................Skeena Routledge, Janet (NDP) .................................................................. Burnaby North Routley, Doug (NDP) ................................................Nanaimo–North Cowichan Rustad, John (BC Liberal) ..............................................................

Nechako Lakes Shypitka, Tom (BC Liberal) .............................................................Kootenay East Simons, Nicholas (NDP) ........................................Powell River–Sunshine Coast Simpson, Hon. Shane (NDP)................................................ Vancouver-Hastings Sims, Hon.

Jinny (NDP) .............................................................Surrey-Panorama Singh, Rachna (NDP) ........................................................Surrey–Green Timbers Stewart, Ben (BC Liberal) ................................................................Kelowna West Stilwell, Michelle (BC Liberal)..............................................Parksville-Qualicum Stone, Todd (BC Liberal)........................................

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

North Vancouver–Seymour Throness, Laurie (BC Liberal) ..................................................... Chilliwack-Kent Trevena, Hon. Claire (NDP) .............................................................. North Island Wat, Teresa (BC Liberal) ................................................Richmond North Centre Weaver, Dr. Andrew (BC Green Party) ......................... Oak Bay–Gordon Head Wilkinson, Andrew, QC (BC Liberal) .............................. Vancouver-Quilchena Y ap, John (BC Liberal)..........................................................

Richmond-Steveston LIST OF MEMBERS BY RIDING Abbotsford-Mission ..........................................................................Simon Gibson Abbotsford South ..................................................................... Hon. Darryl Plecas Abbotsford West .................................................................... Michael de Jong, QC Boundary-Similkameen.....................................................................

Linda Larson Burnaby–Deer Lake ...............................................................................Anne Kang Burnaby-Edmonds ..............................................................................Raj Chouhan Burnaby-Lougheed................................................................... Hon. Katrina Chen Burnaby North................................................................................

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ralph Sultan West Vancouver–Sea to Sky ..............................................................Jordan Sturdy Party Standings: BC Liberal 42; NDP 41; BC Green Party 3; Independent 1

CONTENTS Tuesday, April 9, 2019 Afternoon Sitting Page Orders of the Day Committee of the Whole House............................................................................................................................................ 8279 Bill 5 — Budget Measures Implementation Act, 2019(continued) S. Bond Hon. C. James T. Redies B.

Stewart Report and Third Reading of Bills......................................................................................................................................... 8298 Bill 5 — Budget Measures Implementation Act, 2019 Proceedings in the Douglas Fir Room Committee of Supply .............................................................................................................................................................. 8299 Estimates: Ministry of Environment and Climate Change Strategy(continued) Hon. G. Heyman C. Oakes P . Milobar

TUESDAY , APRIL 9, 2019 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 committee stage on Bill 5, Budget Measures Implementation Act. In

Section A, Douglas Fir Room, I call continued debate on the estimates for the Ministry of Environment and Climate Change Strategy. Committee of the Whole House BILL 5 — BUDGET MEASURES IMPLEMENTATION ACT, 2019 (continued) The House in Committee of the Whole (Section

B) on Bill 5; J. Isaacs in the chair. The committee met at 1:35 p.m. On

section 6. S. Bond: Welcome back to the minister and her staff. We got an initial start on the bill and, as we pointed out earlier, and the minister herself pointed out, a very complex imple- mentation bill. There are lots of complicated formulas and all kinds of things in here. We just want to highlight some of the policy implications, in particular.

Section 6, actually, while under the umbrella of the Income Tax Act…. This is related to the medical tax credit, I believe. If the minister could explain…. First of all, let’s start with why the change is being made. Hon. C. James:This will apply, as we go through the bill, to a number of sections where there’s been a change at the federal level, and we’re ensuring that change occurs and is a benefit. I’m sure the member will ask the question around how this benefits taxpayers. It’s a benefit to the taxpayer. S. Bond: Thank you for that, Minister.

Can the minister explain, then, how income is now calculated under the new provisions? And will it impact the delivery of the tax credit? Hon. C. James:This

section amends the Income Tax Act, as the member said, to ensure that you use the federal net income amount in the calculation of your medical expense tax credit. So what that means in practicality for people who are filling out their income tax forms is that split income, then, can be deducted and calculated on a threshold for the medical tax. It basically harmonizes the calculation of the medical expense credit with the federal rules, which makes it easier for taxpayers — that it’s harmonized with those rules — and it’s beneficial to taxpayers who use split income. S.

Bond:When we’re lining it up with the federal jurisdic- tion, that’s a requirement anyway in order to make it more consistent. In terms of splitting incomes, how is that inform- ation going to be conveyed? I assume that will make it a dif- ferent process for people who will claim in that way. [1:40 p.m.] Hon. C. James: Just to, I think, add a point. This is a credit, so there’s not a requirement to harmonize. We’re choosing to harmonize. It’s not a requirement to harmon- ize when it’s a credit.

As I mentioned earlier, for simplicity and for taxpayers, it’s certainly easier if they have the same net income federally and provincially to be able to use for this credit. That’s what we’re doing. It’ll be the same net income that you use feder- ally that you use for provincial, as well, for the purposes of this credit. For the simplicity piece, that really is the purpose of this. The member asked: “How will taxpayers be able to calculate this?” The forms will be very clear. They, in fact, will calculate it. As you know, if you do your income tax on line, it will cal- culate automatically.

It will just ensure that they don’t have to use a different net income amount. It’ll be the same amount provincially and federally.

Section 6 approved. On

section 7. T. Redies:Minister, I just want to clarify. With this partic- ular section, is this the clause that makes the mining flow- through tax credit permanent? Hon. C. James:Y es, it is. T. Redies:Thank you, Minister, for the answer. Sometimes with the language, you’re not sure what’s being said there, but thanks for that clarity. I know the minister thinks that I’m often very critical with respect to her tax policy, but this is one thing that I was actu- ally delighted to see in the budget this year. I want to thank the minister and her staff for getting it in there.

Because this is an area of interest for me, I’m just wonder- ing if the minister might be able to give us some clarity or insight as to how much more investment in mining in the province she does expect to see as a result of making this mining flow-through tax credit permanent. Hon. C. James: Thank you to the member for the com- ments on the tax credit. I think the tax credit, per se, being made permanent won’t necessarily drive up the investment, because the tax credit has been in place for a while. So the tax credit is continuing. But it will certainly provide certainty — 8279

no pun intended — and stability, which I think will encour- age people. If they’re looking at longer-term investments, it will certainly encourage them, knowing that each year they don’t have to wait to see if that credit is coming forward. I think the fact that it’s been made permanent, in itself, will make a difference. Certainly, commodity prices…. I mean, they’re a number, as the member will know well. But my hope is that making this permanent will provide stability and a longer-term view for the industry and a longer-term commitment from government for the support for this in- dustry in British Columbia. T.

Redies: Thank you, Minister, for the answer. Quite rightly, certainty in these types of tax credits actually should result in, hopefully, a greater willingness to make investments. [1:45 p.m.] I’m just wondering, given the minister’s last answer: are there any additional costs that we should be aware of, as a result of this, to the government? Perhaps in the three-year plan, is there any additional expectation that now making this mining tax credit permanent will have some impact to the budget? Hon. C. James: There is no change expense-wise from the budget’s perspective.

Certainly, the expectation will be to review each year. I think the tax credit has been renewed each year for a number of years under the previous govern- ment, as well, so I think the expectation from the industry’s perspective was that it would be renewed. So you wouldn’t expect to see a change in the following year. Certainly, if we see an increase in use of the credit, I expect we would see an increase in the use of new investments in the province as well, so those would balance off. It’s some- thing we’ll certainly be paying attention to and watching.

But I would certainly hope that having it permanent, as we’ve talked about, creates that kind of stability and certainty and that we’ll see further dollars coming into exploration, which again will offset any increase in the credit that comes in. T. Redies:Thank you, Minister, for that answer. I recog- nize that the tax credits work in different ways, but the B.C. film tax credit, for example, this year had a significant impact on the budget in terms of being several hundred million dol- lars — I don’t have the number right in front of me — above what was expected.

So does the minister have any concerns that a similar situation could occur in mining? Hon. C. James: The film tax credit is an interesting example to use, because I think the member certainly knows that I raised that as an issue in last year’s budget as well. I think it’s an example, as I was talking about with this industry, where it’s not simply one factor that’s made the dif- ference; it’s a number of factors. When it comes to the industry, it obviously has to do with our talent and the scenery and the opportunity for every kind of geography that you would want, but also the dollar.

The reality of the dollar has meant we’ve seen an increase in productions, which has meant an increase here. I think it’s a number of factors that have been taken into account when it comes to the film industry. I would expect if you saw that kind of spike, it would be a number of factors, again, that would drive it. Obviously, we look at commodity prices as we go along each year in the budget. That’s followed and monitored monthly by our folks. I think it would take a number of pieces. But certainly, those are things we look at each year as we build the budget.

Section 7 approved. On

section 8. S. Bond: The minister is welcome to correct me if this is inaccurate, but

section 8 looks like housekeeping. It looks like it’s correcting a reference to the federal act and, poten- tially, a modification in terms of that. Could she just confirm that’s basically a housekeeping section? [1:50 p.m.] Hon. C. James:The member is correct. This housekeep- ing, again, ensures that the calculation is harmonized. Sim- plifies the rules.

Section 8 approved. On

section 9. S. Bond: We’re going to spend a little bit of time on this, sections 9 and 10. I’m hoping that the minister will give us a bit of latitude. Obviously there are two sections, but we have a lot of questions. And this is one of the signature commitments of the government, so we want to be sure that we understand not just the policy decision that’s been made but the fiscal implications for taxpayers. The ques- tions, in terms of which section, technically, might be a little out of order, but we’ll do our best to try to keep them relevant to the section.

The minister would know that the after-tax income of a household in British Columbia where families have chil- dren is $108,407 a year. That would be considered average in British Columbia. Can the minister tell us what that family would receive in terms of the child opportunity benefit? Hon. C. James:The family income the member was talk- ing about, $108,407, two children…. Just making sure I’ve got the information correct that the member was referring to, because each of the calculations is different, depending on the number of children and depending on the income, as the member knows.

It’s $380 per year — that would be for both children — and $6,080 from birth to 18 with that income and with two children. 8280 British Columbia Debates Tuesday, April 9, 2019

S. Bond:I appreciate the challenge with children and how many. I do appreciate that. Could the minister provide, as a comparative for us, what that average family would currently receive under the B.C. early childhood tax credit? [1:55 p.m.] Hon. C. James: As the member said, it depends on the number of children. It also depends on the ages of the chil- dren. That also is part of the reason, the calculation. I just want to make it clear that these are averages I’m giving the member, because again, it’s net income. We have to take a look at the net income.

The calculations are based on grids, so for purposes, we’ll use the grids. The number the member gave was $108,407. The example we have on our grid, rather than going through the calcula- tion, is $105, so it’s close to the grid number that the mem- ber mentioned. It depends on the age of the children, again. If the children are over the age of five, there’s nothing. They receive nothing, because the previous credit ended at age five — it was zero to five —

whereas this credit continues on. If they’re under the age of five, $1,100 per year for the five years would be what the family would be receiving. S. Bond:I appreciate that. I do understand the complexity and the tiers. We’re going to have some questions about the tiers, so the minister will probably have to take some time to sort through that. The phase-out for this benefit has been dropped from just over $140,000 to $114,500 for a family with two chil- dren. Can the minister tell us how many families will see decreased benefits under the change in threshold? [2:00 p.m.] Hon. C.

James:Again, recognizing different children, dif- ferent families, which I think is important, I’ll give two dif- ferent numbers for the member. There is an annual basis, and there’s a lifetime basis, because, obviously, the other credit ended at age five. On an annual basis, 53 percent of people will be receiving more than they are under the cur- rent benefit, and 13 percent will be receiving less than they currently are. On a lifetime basis, 57 percent will receive more than they are under the current, and 9 percent will receive less than they are under the current. S. Bond: Thank you for that.

I’m wondering if it’s pos- sible for the minister and her staff to look at the tiers. We’ve already discussed that there are a variety of tiers. Is it possible for the minister to give us a sense of how many families fall within each of the tiers? Could the min- ister look at how many families fall within each of the tiers under the new benefit? [2:05 p.m. - 2:10 p.m.] Hon. C. James:We’re taking a look at the information that we have to see whether we can break it down in tiers. The challenge, I’ll suggest to the member…. I’ll get the informa- tion to her, because we don’t have the calculations here.

To use the calculations without the full information won’t give the member the kinds of numbers she’s looking for. It, of course, depends on how many children you have and the ages of the children. So it’s not as easy as saying this many families in this category, because that many families may not have that many children and the children who are a particu- lar age in that area. I think I gave the member the general numbers around the people who will receive more and the people who will receive less.

But we’ll go back and take a look at the calcula- tions and see if it’s possible to do a bit better of a breakdown for the member, because I think that’s what the member is looking for. S. Bond: I do appreciate the complexity of the specific details. However, it does lead to the next series of questions. While, certainly, the government intends to make this one of their significant commitments to British Columbians, one would assume there has been modelling done about the cost side. Obviously, British Columbians are going to get a bene- fit, and there will be a debate about how it’s being imple- mented.

Perhaps the minister can explain, then, what kind of modelling was done. How did the ministry look at what the cost to taxpayers will be for this benefit? Maybe we’ll start with that. Then the minister, I’m sure, knows that I’m going to be heading to what the costs are, and we’ll get to the specifics of those. But was there modelling? What will this cost British Columbians? [2:15 p.m.] Hon. C. James:Y es, there was extensive modelling done by tax folks and extensive modelling that was done before the final design of this benefit. We used StatsCan-generated modelling. They use everything, including microdata.

I think that’s important to note. They use everything from family composition to the numbers and ages of children. This is all reconciled, again, with income tax data — looked at families’ net income as well. So all of that infor- mation in the StatsCan modelling was utilized — again, checked against the CRA data and 2020 net incomes, because this comes into play, as the member knows, in 2020. Then just the costs. I know the member has the budget, but the total cost for the program is $380 million. The net cost is $250 million because the existing benefit, of course, is $130 million.

Those are the costs for the program. S. Bond: Can the minister provide the tax expense for each of the tiers within the benefit? Hon. C. James: In using the term “tax expense, ” I think I know what the member means. We didn’t break it down on tax expense. We broke it down on total cost of the pro- gram and the number of families who will receive more Tuesday, April 9, 2019 British Columbia Debates 8281

and the families who will receive less, as I outlined for the member already. S. Bond: Can the minister, then, explain how much was saved by decreasing the phase-out for the top tier? We’ve already discussed how it dropped. How much was saved by reducing that top tier? G. Begg: I seek permission to make an introduction. Leave granted. Introductions by Members G. Begg:Present in the House today are 40 representatives — they’re just being seated now — of the finest school in Surrey, 28 grade 5 students from Pacific Academy, along with 12 of their chaperones.

Will the House please make them welcome. [2:20 p.m.] Debate Continued Hon. C. James:We’ll get that information for the mem- ber. We have a rough idea, but we want to make sure we’ve got the right numbers. So we’ll get the information to the member. S. Bond:Thank you to the minister. I know that we appre- ciate that and recognize the complexity of trying to answer questions here about those kinds of specifics. I guess the point we’re making is that, you know, the government has expanded the program significantly, but it dropped the threshold for an average household in British Columbia.

So from our perspective, it would be important for us to know…. Perhaps I’ll just add this in my final ques- tion on this particular group of questions. What we really want to know is: what would it cost if the minister left that tier in place with the original threshold that was there? And perhaps a bit more of the rationale around making that change. But we’ll wait for the minister and her staff to bring that information back to us. With that, my co-critic has a series of questions. T. Redies:Obviously, we’ve been talking about the new child opportunity benefit.

Can the minister explain how this new child opportunity benefit is going to work in con- junction with the federal act? Is the benefit based on an individual or a family income as declared in the previous income tax year? Hon. C. James:It’s net family income, so the family’s net income — the member is correct — based on the prior year. It’s the same calculations and the same

definitions as the existing federal benefit, so from that perspective, it will be straightforward. For families, this will be a benefit that they’ve applied for. It will be using the same

definitions and using the same process that they use for the federal benefit. T. Redies:I should have prefaced my comments with also welcoming the children from the Pacific Academy. Again, one of our great schools in Surrey. I don’t know if they’re still here; I can’t see them. I feel obliged to be a bit apologetic that they’re actually coming in and watching a committee debate about a budget bill that deals with taxes and everything. This particular benefit that we’re talking about actually has to do with children.

What we’re trying to find out on the opposition side is what families are going to be receiving the benefit, how much, and what families are not going to be receiving the benefit. It actually is an important debate, but it may not seem that interesting to the children above. But bear with us. Could the minister explain how this is going to work with separated or divorced parents in the previous year? [2:25 p.m.] Hon. C. James:I think the important piece is this will be the same, again, as the existing benefit.

There is a calcula- tion for the division of the child benefit, but that obviously depends on your legal agreement that’s in place — your leg- al separation agreement, your legal divorce, your shared cus- tody. So I couldn’t give the member an example of exactly how that would occur, because that would depend on the legal agreement in place. If you have 50 percent shared cus- tody, likely there would be a 50 percent division. But again, that would depend on the legal agreement in place. T. Redies: Thank you, Minister, for the answer.

I’ d just like to explore a subject that we’ve heard a lot about from the minister and the ministry. That’s with respect to satellite families, which the ministry has made a lot of effort to go after for being deemed to not be paying sufficient income tax. I guess my question to the minister is: what efforts are going to be made, or how will the child opportunity benefit be administered to ensure that people who are not declaring their full worldwide income and are not eligible are not receiving the child opportunity benefit? [2:30 p.m.] [R. Chouhan in the chair.] Hon. C.

James: Just making sure we have the accurate information based on tax law. Tax administration is the fed- eral responsibility, this tax included. I think that’s the important piece to note. If you do report your worldwide income — and there are a number of people who report their worldwide income, as they should — then that’s used as part of the calculation for net income. Remember, I mentioned that net income was what we used for the benefit, so therefore, it’s included there.

If you aren’t declaring your worldwide income and you’re required to, you’re basically doing tax fraud — you’re basically doing that — in which case, the CRA could 8282 British Columbia Debates Tuesday, April 9, 2019

audit, could require information to be provided, etc. So I think that gives the kind of basis for people who are reporting via this benefit. T. Redies: Thanks for that answer. Is the minister at all concerned, again, with this new tax benefit, that there might be people who have no compunction about taking advantage of the program? I guess my question is: are there going to be additional resources at all attached to this program in some manner to ensure that the money is going to the families that need it the most? Hon. C.

James:Certainly, I think all of us are concerned, always, about people utilizing a program and service that they aren’t eligible for and taking money away from people who should be receiving it. I think that’s an ongoing concern. This bill and these amendments don’t change that, because the existing benefit is there, and people may be trying to cheat the system of the existing benefit as well. So the con- cern remains. It doesn’t change with this benefit coming in. I think the examination of people’s net income is federal government responsibility.

As we’ve done through the money laundering work we’ve been doing, we’ve certainly been encouraging the federal government to look at putting the resources in place for audits, for making sure that the dollars go to the people that deserve them and are legitim- ately applying for them. T. Redies:Thank you, Minister, for the answer. I mean, it’s an important topic, right? I guess we know that the government is implementing a number of measures to share information with the CRA, etc.

Is there any potential for some type of red flag to be noticed if people are claiming the child opportunity benefit but living in certain areas or homes that would suggest that it would be unlikely that they could afford to live there? [2:35 p.m.] I’m just curious as to how the government is thinking about this and how they are going to work with the CRA to flag issues that potentially look suspicious. Hon. C. James: Certainly, I think every tax department across the country, provincially and federally, probably has a strong working relationship.

We certainly do with the feder- al, with the CRA, and we have in the past shared red flags as they come up. We have strong protections around the infor- mation that is shared between the federal and the provincial tax departments. Certainly, if there are suspicious activities or suspected, we have a very good relationship to be able to give those red flags, as the member used the example, to be able to point out areas that should be further investigated. T. Redies:Why is the implementation of the child oppor- tunity benefit being delayed to October 2020?

I believe the minister has indicated that it has something to do with the delay on the federal government side. But given that the minister has acknowledged that there are a number of famil- ies who need these benefits, I’m just curious as to why there isn’t an ability to push up the implementation timeline. Hon. C. James: I share the challenge that we have in implementing tax measures that are coordinated with the CRA, with the federal government.

After our consultations in looking at developing this benefit, it was determined with the federal government that the earliest they could look at that coordination was October 2020. It’s a coordination of the tax benefits with the federal government, and they need at least a year’s lead to be able to look at the coordination between the existing benefit and the new benefit that’s coming in and be able to admin- ister it on our behalf. T. Redies:Well, as they say, nothing in government ever goes quickly — particularly, it sounds like, benefits and tax changes.

Can the minister confirm that until that time, the existing benefit will continue? Hon. C. James:The member is correct. T. Redies:I’m going to ask a number of questions which may fall into the same category of the previous questions by my learned colleague from Prince George–Valemount. But we are trying to get a little bit more specificity around the program and how it’s working and why. Can the minister explain the different levels of income and family makeups and what is received by families? We see that the new child benefit of $660 for one child is going to be increased to $1,600 for one child.

Can the minister explain at what level of income a family receives the full $1,600? And how does it phase out as the income goes up? [2:40 p.m.] Hon. C. James: I think this points out the challenge of looking at specific examples, because the number of children makes such a difference and the ages of the children make such a difference. But I’ll just run through the numbers for the member. The full benefit, as the member pointed out: $1,600 for the first child, $1,000 for the second child and $800 for each subsequent child.

That’s reduced by 4 percent of net family income over $25,000 until the benefit is equivalent to $700 for the first child, $680 for the second child and $660 for sub- sequent children. The benefit is phased out at 4 percent of family net income over $80,000. So a family with one child sees the benefit phased out at $97,500 — again, we’re talking about net family income — and a family with two children sees the benefit phased out at $114,500. T. Redies:Thank you, Minister. That was not an easy thing to relay, I don’t think.

Can the minister perhaps give us some colour as to why Tuesday, April 9, 2019 British Columbia Debates 8283

the various income levels were chosen and, in particular, I guess, the use of the 4 percent of net family income? I mean, how is that all arrived at, and why? [2:45 p.m.] Hon. C. James:I think that the first piece in taking a look at the modelling…. The member asked why we looked at the 4 percent. I think it’s important to also look at why we picked the $25,000 and why we looked at the $80,000, as well, because I think all of those fit with the modelling that I talked about that we did earlier. We do have other models to look at across this country. B.C. is certainly not the first.

In fact, we’re near the tail end of combining those benefits. We looked at modelling across the country. We looked at rates that were used across the country. We looked at poverty rates, because, I think, as I said in announcing the budget, this really is an initiative that we wanted to ensure provided support for low-income and middle-income families. That really was a major focus, so we also looked at poverty rates. That’s why the $25,000 was chosen. Why did we choose the 4 percent versus another per- centage? We wanted a modest phase-out rate.

We looked at a modest phase-out rate so we could see gradual benefit changes with income changes, so you didn’t see big drops or big climbs, whichever way you want to look at it. We wanted to see a modest phase-out rate. That’s why we looked at the 4 percent.

On the $80,000, again I think we could have debates with anybody in the community around whether $80,000 is middle income or not, but we wanted to find, again, a base where we felt we had included middle-income families. [2:50 p.m.] Obviously, all of this also had to be done within the budget and within what is possible, financially and fiscally — what is responsible for the taxpayers of British Columbia, what provided us an opportunity to be able to utilize the dollars that were available in the budget. As I said, the two bookends….

We felt one addressed the issue of poverty and the challenges there and the low income, and one provided a gradual change for people whose income shifted over that time period. The $80,000 still met the target, as I talked about earlier, with families not being phased out until $97,500 and a family with two chil- dren not being phased out until $114,500 — also reach that middle income as well. T. Redies: Is there any concern with the benefit, that it might discourage people from trying to move up the income ladder? Was that looked at, at all in terms of the model? G.

Begg: I seek permission to make an introduction. Leave granted. Introductions by Members G. Begg: Hopefully, you all saw my great entrance today, especially the grade 5 kids from Pacific Academy in Surrey. This is another group, as I said, of grade 5 students from the greatest school in Surrey, Pacific Academy, and their chaper- ones. Would the House join with me, please, in making them welcome. Debate Continued Hon. C. James:Y es, we did. That was part of looking at the 4 percent.

It was to make sure that we look at the marginal effective tax rate, do that analysis and take a look again at not creating unintended consequences, which is why the analys- is was done.

Section 9 approved. On

section 10. S. Bond:Well, I’m not quite sure what to say about

section 10. If we want people to have an exercise in reviewing legisla- tion, there is one of the most complicated formulas included in this section. This would certainly describe technical implementation. Perhaps we can start with the minister describing

section 10 in detail. Obviously, the part we’re concerned about is the overpayment part of this. We’re introducing a whole

section about overpayment. But maybe the minister could just walk through the general overview of

section 10. [2:55 p.m.] Hon. C. James: It’s boiling down tax information into simple, straightforward language, which I think will help. The first piece to mention is that this, in fact, is exactly the same language, exactly the same sections, other than the calculation that is in the existing benefit. So nothing has changed. This is basically taking what was in the previous benefit and putting it into this act for the new benefit. It’s not new sections. It’s not a new way of doing things. It’s the same sections that were there, other than the calculation.

The cal- culation is different, but it is as I described to your colleague — the calculation as I talked about, with the percentage. On the issue of overpayment. I think this is an interesting description of tax law. Basically, tax credits are provided by deeming the individual to have made an overpayment, and then the tax credit comes back as the overpayment. So it’s the way that the tax system works. This is no different than tax credits. It isn’t about an actual overpayment.

It describes it and outlines it as deeming the individual to have made an overpayment, and therefore, that overpayment comes back in the form of a tax credit. That’s how the system structures it. So I can completely understand how it could be read as overpayments that people have to make. It’s actually not that at all. It’s the way the system functions in giving tax 8284 British Columbia Debates Tuesday, April 9, 2019

credit. Y ou are deemed to have made an overpayment, and therefore, the tax credit comes back to you in the way of that overpayment. S. Bond:Thank you to the minister. That was very helpful, because we had a series of questions about overpayment and how on earth that would work for families in British Colum- bia. In essence, it’s again a technical term that describes it in a literal way, but it’s not a physical way. So people don’t actu- ally overpay, and there are no…. Okay. That’s very helpful. Again, really, this is just a transfer of sections that existed previously that have been transplanted to this bill.

So if we had questions and concerns, we probably would have been dealing with them in another act previously. There’s nothing new or unique to the new child opportunity benefit, then? [3:00 p.m.] Hon. C. James:The only difference is the calculation that was as we described, but otherwise, it is basically taking the existing benefit language and putting it into this act. T. Redies:Thank you, Minister, for that explanation.

As soon as you made it, I thought: “Oh yeah, I understand that now. ” Isn’t it funny how tax language has been developed over the years to make it harder for people to understand, I think, sometimes. Minister, just pursuing this

section a little bit more. I think the minister clarified this but just, again, to be specific. The full benefit for the one, two or three children is only available to families making less than $25,000. Is that correct? Hon. C. James:That’s correct. T. Redies:Thank you, Minister. Again, we talked a little bit about this. When you think about trying to make a living in, particularly, the Lower Mainland or the capital region, $25,000 is obviously not a lot of money. In fact, I think in the Lower Mainland the minim- um that someone can get by on is apparently about $40,000.

I’m curious why the government didn’t pick a higher limit, particularly in the context of what we see, as families on low incomes struggle with the costs of cities — again, particu- larly in the Lower Mainland. Hon. C. James:That’s exactly why, as we outlined in the formula, the phase-out at 4 percent of net family income is over $80,000. That, again, provides for middle-income fam- ilies. For a family with one child, it’s not phased out until $97,500 as family income. For a family with two children, it isn’t phased out until $114,500. I think we all recognize the challenges that are faced by families.

It’s part of the important work that we did in look- ing at this tax credit and how we ensured that it provided support for people who need it the most. T. Redies: It would appear in (

b) of this

section that between $25,000 and $80,000, a family will get only $700 for one child, which is about $40 more than the maximum existing benefit, I believe. Can the minister confirm what the current amount is that that family would receive? It doesn’t seem to be much higher than what is currently received. Hon. C. James: The member is correct; it is currently $660. But the member must remember that the existing benefit only goes until the child is five. The new benefit com- ing in will go until the child is 18. So a much longer period of time.

I think parents have certainly said to us that the costs don’t end when the child turns six. In fact, in many cases, they increase once the child turns six. So this benefit now will go from birth to 18. T. Redies:Certainly, I appreciate that, that it’s going over a longer period of time. But $40 a year for a child, in addition to what they receive today, doesn’t seem like much of an increase. Did the government consider a higher amount, or was the intention just to increase it over more years? Hon. C. James:Certainly, for families who saw the $660 end when their child turned six….

I think knowing that they’re going to receive that money each year until their child is 18 is going to make a huge difference — a huge, sig- nificant difference in the lives of families, particularly low- income families who are most in need. So that’s how the credit was developed. [3:05 p.m.] T. Redies:Again, pursuing this a little bit further, it would appear in the same

section that between $25,000 and $80,000, a family with three or more children will get $1,380 plus $660 times the number of children in excess of two children. Is that correct? Again, how is that arrived at? Is that substantially more than what they’re currently receiving today if the child is under six? Hon. C. James:The member has the correct numbers. Just remember that it doesn’t end. That’s the big difference. It goes until the child is 18 years old. T. Redies:All right. Just moving on to subsection (3). Can the minister explain the formula, in particular A and B? [3:10 p.m.] Hon. C.

James: I’m just chuckling at the complexity of tax formulas and explaining them in clear, simple language. There is a calculator being worked on for these pieces as well. For the formula the member talks about, A is calculated as if the person had full custody of all their children, and B is calculated as if they didn’t have custody of their shared- custody children. Remember, there are a variety of families. This could include some shared-custody children and some full-custody children, which is why you need a formula to be able to look at this. Tuesday, April 9, 2019 British Columbia Debates 8285

Y ou take the average of those two numbers, and that gives you the calculation of your credit. This is a consistent for- mula used in other tax bills federally as well. That’s the Coles Notes of this example. Again, each family is different. Some people have full custody of some children, and some have shared custody of some children. That’s why the formula is outlined as it is. T. Redies:I rise just to make a comment. It’s obvious why we need tax accountants and tax lawyers in the country. I’ll let my learned colleague now ask a few questions. S.

Bond: The minister actually did a pretty good job of trying to bring A and B to the understanding of average Brit- ish Columbians like us. We want to look at subsection (6) now, if the minister and her staff could turn their minds to that subsection. It seems to suggest, if a resident is only in Canada for part of the year and paid income tax for part of that year, that for the pur- poses of calculating whether or not an individual is eligible for the child opportunity benefit, the individual’s truncated income for the partial year is used.

We’re wondering if that isn’t likely to result in a number of people being paid the child opportunity benefit when they shouldn’t qualify — or perhaps getting more than they should in the program. [3:15 p.m.] Hon. C. James:I’ll continue to do my best to try and make sure that these are understandable. For the members, it’s basically the reverse of what the member described. If you’re a resident in Canada for only part of the year and you’re only claiming a partial year of income in Canada, for the purpose of this credit, you actu- ally have to claim your full year’s income.

If you’ve made income somewhere else — you have world- wide income — you actually have to claim that income as well for the purpose of this credit. It’s to ensure that we get that full year’s income and not, as the member described, just simply the portion of the year that the person was in Canada. They will be required to actually claim their full year’s income, including worldwide income. T. Redies:Thank you, Minister, for the answers. I give the minister a lot of credit here. It’s remarkable that you’re able to put this into English language. We read it a number of times, and it certainly wasn’t that clear.

But you do have the benefit of very capable people working with you. I’ d just like to move, if I can, to section (7), which I believe is sort of what happens if an individual becomes bankrupt in a taxation year. Can the minister maybe broadly describe the process — what happens and how that

section actually applies? Hon. C. James:This

section speaks to someone when they become bankrupt in a taxation year. When you go bankrupt, you have multiple taxation periods. During a year — pre- bankruptcy, etc. — you may have different taxation periods. What this

section does is require that all of those taxation periods in a calendar year be utilized together to be able to calculate whether you’re eligible, and what your eligibility is, for this tax credit. T. Redies: Does that mean that if somebody declares bankruptcy, they’re still eligible for the tax credit? [3:20 p.m.] Hon. C. James: Y es, someone who’s bankrupt isn’t non- eligible for credits. It will all depend on their income, and it’ll depend on, again, utilizing those multiple taxation periods during that year to be able to make the calculation to deter- mine if they’re eligible. S.

Bond: Could the minister explain for us the purpose and calculation in subsection (8)? Hon. C. James:This is the

section on the CPI indexing. Basically, this formula increases the $25,000 that I talked about earlier and the $80,000 annually, based on the B.C. consumer price index. So this is a complex formula that does that, but basically, it’s CPI indexing so that those areas are indexed each year based on the consumer price index for B.C. T. Redies:Minister, can you explain the purpose and the calculation in subsection (8)? We just did that. My apologies. It’s all blending into…. I imagine the children have gone. No longer terribly interested in tax policy. Okay. I will move on to the…. In the legislation, it says that the opportunity benefit cannot be attached or assigned — under

section 13.094, I believe. That’s where that is indic- ated. I presume that’s to ensure that it supports the children of the family of the recipient. Is this correct? Does that follow the same pattern as the previous child benefit, or is it new? Hon. C. James: Y es, this follows the existing structure. And yes, it ensures that it goes with the children.

Section 10 approved. T. Redies:I’m just wondering if we might be able to call a brief recess, if that’s all right. The Chair:This House will be in recess for ten minutes. The committee recessed from 3:23 p.m. to 3:36 p.m. [J. Isaacs in the chair.] On

section 11. Interjection. 8286 British Columbia Debates Tuesday, April 9, 2019

S. Bond: Well, the member for Powell River–Sunshine Coast is awake and excited about the debate. That’s fantastic. All right, back to this riveting subject. We’re now mov- ing on to

section 11. Actually, I just wanted to ask the min- ister a couple of questions about this. I think it’s some- thing we all support and recognize. It’s the farmers food donation tax credit. Maybe we can begin with…. Maybe the minister can give us a sense of the magnitude of the success of the program. Is there a way that the minister can quantify the benefit that was provided, for example, to farmers in the last fiscal year? Hon. C. James: As the member said, I think all of us would like see more and would like to see any program that increases support for donations. This is a very small program.

It’s why, again, we’ve extended the credit for one year — for an examination of the credit to make sure that it’s doing what it should be doing and how we look at expanding it. [3:40 p.m.] It is growing. That’s the positive sign. It’s a small credit, but growing. So just as an example, in 2016, last year, there were about $100,000 worth of donations. In 2017, the cost of the credit was $25,918. In 2016, it was $9,261. It’s small but certainly growing, if you look at the compar- ison.

That is why, as I said, it’s been extended for another year for an examination and discussion to see if there is a way of expanding it. Should it be revamped? Are there other ways of looking at providing this support? S. Bond: That’s very helpful. I appreciate that from the minister. Obviously, I think the growth is important, but it would be good to see it grow exponentially, and perhaps information and education as part of that. I just want to confirm that there are no changes in, for example — I don’t know; maybe this is something that the minister and her team will look at — eligible donees.

Are there other organizations that might be recipients of the donations? Our preference, obviously, would be to see this made per- manent. But if the minister is saying today that one of the reasons it’s being extended for a year only is because there needs to be a look at if it is doing the maximum benefit, we’ d be encouraged to hear that. I’ve certainly heard about it in my constituency, having both a rural and an urban compon- ent. We certainly support the extension.

As we work through this, will the minister be conduct- ing a conversation with farmers, with recipients of the donations, to sort out what would make this more effect- ive? As the minister says, it’s a very small amount of money for a program that really makes a difference to those organizations. Hon. C. James: Certainly, in all of the taxes that come forward, there’s always an examination each year as part of the budget cycle to take a look at the tax credits — see if they’re doing what they should be doing, see if there are opportunities to expand them, see if there are opportunit- ies to improve them.

My colleague the Minister of Agriculture obviously has a lot to do with this credit, so certainly in discussions with her. She will be engaging and having conversations about the credit and what is working and what isn’t so that we can make a decision before we get to next year’s budget. S. Bond: Maybe just one last question. How is the credit determined? I’m assuming there is a role for someone to assess, for example, fair market value. I mean, these are farmers who donate produce. I was interested to note that it usually excludes live animals. I thought that that was an interesting part of the framework.

Is there a process under which there is some sort of assessment about how the credit is determined, and is that related to fair market value? Hon. C. James: The program utilizes the charitable gift rules that are already in place, not different than those rules. So it is fair market value, as the member suggests. That’s usu- ally done by the charity, the determination around what is fair market value for the goods that are coming in, because they’re an organization that receives these kinds of goods. That’s usually the way the process works. Sections 11 to 16 inclusive approved. On

section 17. T. Redies: Minister, can you just maybe provide a little bit of clarity about this section. We’ve determined that min- ing exploration tax credits are being made permanent. This suggests that the definition of “qualified mining exploration expenses” is being expanded. Or is it just the dates that are changing? I just want to clarify that. [3:45 p.m.] Hon. C. James:It is simply the date that is changed in the section.

Section 17 approved. On

section 18. S. Bond: This

section is about enabling a federal minis- ter to redetermine amounts for the B.C. child opportunity grant. Perhaps the minister can explain the purpose of the

section and under what circumstances a federal minister would redetermine the amounts of that B.C. child oppor- tunity benefit. Hon. C. James: As many of the tax sections have, they have authority to do various things because this is a federally administered piece. It is the federal minister — or designate, because, obviously, it isn’t the federal minister himself — that Tuesday, April 9, 2019 British Columbia Debates 8287

has the authority under this tax act to issue payments to tax- payers who apply for the payment after the deadline. It just provides an opportunity for who has the authority to make that determination, and because this is admin- istered federally through the CRA, that’s where the desig- nation happens around the authority to make that determ- ination.

Section 18 approved. On

section 19. T. Redies:I believe

section 19 enables the application of penalties in relation to the child opportunity benefit. My first question to the minister is: can the minister explain in what situations there would be a penalty applied? Hon. C. James: The member is correct. This is about applying penalties to individuals who make false statements to be able to try and get the benefit. An example might be: didn’t report all of their income. Therefore, that would give them a larger benefit, because they didn’t report all of their income.

So someone who knowingly gives false information to be able to claim the credit when they know they haven’t provided the accurate information. T. Redies:Thank you, Minister, for the answer. This sec- tion is a little bit open-ended. It’s not very defined, so I guess my questions are: how big would the penalty be, what will the penalty calculation be based on, and why is it left open-ended? [3:50 p.m.] Hon. C. James: Although it appears open-ended, this

section actually refers to the federal act. That’s why the penalties aren’t outlined here, because they actually refer to

section 163 in the federal Income Tax Act, which out- lines the penalties. The penalties are that the person has to pay back the amount that they falsely received. That’s

part 1.

Part 2 is that they also receive a penalty, which is equal to 50 percent of the amount that they received. Those are the two pieces that they are required to pay back.

Section 19 approved. On

section 20. S. Bond:

Section 20 enables appeals in relation to the B.C. child opportunity benefit. Maybe the minister, if she wouldn’t mind, could explain the appeals process and how it will be administered. Hon. C. James: This appeal is an appeal to the CRA, because again, they are the individuals who are administer- ing the tax. It goes through the same kind of appeal process that you would appeal anything else at the CRA — writing to dispute and going through the usual appeal process that you would at the CRA. I think the important piece to note about this provision is that it’s about appealing a decision regarding the indi- vidual’s residency for the purpose of receiving this benefit. That’s what this

section refers to. But it’s basically the same appeal that you would do with other tax bills that are feder- ally administered, to the CRA. S. Bond: In essence, it would be the same for the existing program today? The minister can confirm that. The other question is more generic. It’s about….

The gov- ernment plans to expand the program, obviously — the child opportunity benefit — to many more children and families. [3:55 p.m.] In terms of the appeal process and in terms of admin- istration more broadly speaking, does the minister anti- cipate additional staff being required to manage this pro- cess and the overall process related to the child opportun- ity benefit? Perhaps she could just confirm, firstly, that this is the same appeal process related to residency with the existing program. Hon. C. James:Y es, Member. To the first question, it is the same as the previous benefit. No different.

We don’t expect additional resources will be needed in British Columbia. Again, this is an appeal and managed by the CRA. So we don’t expect that will add additional resources needed here.

Section 20 approved. On

section 21. T. Redies:Section 21, I believe, adds authority for the use and disclosure of taxpayer information for the administra- tion and enforcement of the Workers Compensation Act. Now, the minister and myself and the member for Prince George–Valemount have had numerous conversations about the sharing of taxpayer information. Of course, British Col- umbians — and, indeed, all Canadians — are very sensitive about how much information is being shared. There is an appreciation that there is a need to share information, par- ticularly to stop things like tax evasion.

I guess our question here on this side is, essentially: why is this being done with respect to the Workers Compensation Act? What information is going to be shared, and what steps are being taken to make sure that information is not shared inappropriately or used inappropriately? Hon. C. James: I think it is important, as the member pointed out, that not only do we review and take a look when information-sharing is occurring but why the information- sharing is there and to make sure that the privacy issues are looked at.

That’s why, certainly, for any kind of sharing, those discussions occur. 8288 British Columbia Debates Tuesday, April 9, 2019

[4:00 p.m.] This is to ensure that employers are accurately reporting their payroll information. This amendment allows Work- SafeBC to check their payroll information against payroll information collected for tax purposes. That’s the informa- tion that is shared. The member was asking what specific information. Payroll information, to allow them to ensure that the information that is collected for income tax pur- poses is accurate.

Section 21 approved. On

section 22. T. Redies:Again, just going along in this vein. I believe

section 22 enables the provision of taxpayer information in relation to the B.C. child opportunity benefit. Again, what taxpayer information? Is it being shared with any entity under this section? And could the minister just kind of explain why it’s there? Hon. C. James: This basically just rolls over, and that’s why it’s consequential. It rolls over the existing information- sharing that’s there for the existing child benefit to the new child benefit. It doesn’t change anything that was there.

It rolls it over to the new benefit to allow that information- sharing between the child opportunity benefit and the administration of other payments. T. Redies:Thank you, Minister. Actually, we can go to

section 23 now, if the minister would like. The Chair:Thank you, Member.

Section 22 approved. On

section 23. [4:05 p.m.] T. Redies: Again, this

section looks like it is about the use and disclosure of taxpayer information under an infor- mation-sharing agreement for the purposes of administering and enforcing the Home Owner Grant Act and Land Tax Deferment Act. Again, I’m trying to understand how that is connected to this particular budget and why it’s here. Also, what is the type of information that is being shared? Hon. C. James: This is just a technical amendment that enables the information-sharing that we talked about in Budget 2017 and Budget 2018.

Just to outline those for the member, Budget 2017, you remember, created the ability to share information between the Income Tax Act and the Home Owner Grant Act. Then Budget 2018 talked about and created the ability to share information between the Income Tax Act and the Land Tax Deferment Act. Those were changes that were put in place. And you’ll remember this was related to principal residence and the changes that were made.

This amendment is consequential to those changes that were made in those budgets and allows the information-sharing to take place and to ensure that people are putting the right information forward.

Section 23 approved. On

section 24. S. Bond: As I understand it, this

section extends by one year the training tax credit for individuals, and obviously,

section 25 does the same for the employer side of it. I think we asked this question last year. We continue to do this one year at a time. I’m wondering. Ironically, when you look at

section 26, the government has chosen to extend by three years the availability of the shipbuilding and ship repair tax credit. Perhaps the minister can give us the rationale for a one-year extension and quantify whether or not the programs being used by both employers and employees…. So for individuals and employers — whether or not the uptake is increasing. [4:10 p.m.] Hon. C. James:On the training tax credits, the member asked whether they are being used by individuals and com- panies. The response is yes. They have been used by both, and they’ve continued to rise.

But again, similar to the dis- cussion we had around reviews that take place of existing tax credits and the example of food donations by farmers, I think the Minister of Advanced Education is certainly taking a look at these credits and whether they accomplish what we want them to accomplish. To give the member an example, for apprentices, individu- als accessing the credit, 9.311 million, roughly, in 2015; 9.626 million, roughly, in 2016; and 10.286 million in 2017. So we’re seeing a gradual climb. For corporations utilizing it, again, 6.8 million in 2015, 7.1 million in 2016 and 8.1 mil- lion in 2017.

I think, again, those are examples of why the minister feels that she wants to review these and make sure they’re doing what they need to do. Is it the right route or is there another way to provide support, obviously, in an area that needs to be expanded? Hence the one year on those pieces. Then the shipbuilding, just because the member men- tioned the next section. That credit was put in place in 2012, intended to be a temporary credit to look at expanding the industry.

Certainly, we continue to hope that that will occur, so we’ve given a three-year to give a little more of a time period to look at the kind of activity that could occur in our province. Sections 24 and 25 approved. On

section 26. Tuesday, April 9, 2019 British Columbia Debates 8289

[4:15 p.m.] T. Redies: Just pursuing the minister’s response from earlier, does the extension of the tax credit have anything to do with the…? I believe B.C. Ferries is looking at some addi- tions or improvements to their fleet. Does the shipbuilding credit have anything to do with that, the ministry wanting to see that work done in B.C.? Hon. C. James:Certainly, I think we would support, obvi- ously, the ships being built in British Columbia, but that’s not the intent of expanding the credit.

The credit really was to support the industry broadly in British Columbia, not focused on the ferries and the renovations or rebuilding or new ships that come with B.C. Ferries. T. Redies:I wonder if the minister could provide some clarity as to whether or not the shipbuilding credit actually makes British Columbia competitive with, for example, oth- er provinces, like Quebec. Is this comparable? Or is it better or worse? Hon. C. James: I think we could have a thorough dis- cussion around tax credits and, again, go back to the film industry and the provinces playing each other off for tax credits.

I think it’s important to recognize that this is simply one factor. Whether we match up with Quebec’s credits that they offer…. The member used Quebec as the example. We’re not looking at playing off provinces. We’re not looking at whether this one factor will match up to somebody else’s credit. We’re looking at all of the competitiveness. We believe that this is helpful. We believe it helps with our competitiveness, including the other factors that are here in British Columbia. That’s why we’ve extended it for three years.

Section 26 approved. On

section 27. S. Bond: From our perspective, this is one of the little gems that’s in this piece of legislation. Can the minister confirm that this means that gasoline prices will be increased in the Lower Mainland? Perhaps she can articulate the amount of the raise, when it will be put in place and exactly who will be impacted. [4:20 p.m.] Hon. C. James:This section, as the member will know, is enabling legislation. This

section enables TransLink to util- ize this tax to look at a 1.5 cent per litre increase. July 1 is the earliest that the increase could occur — that TransLink has, by law, notice to give. This would impact the TransLink area. This would be, as the member knows, an increase to sup- port expanded transportation and commuting options throughout Metro Vancouver, which includes the rapid tran- sit in Vancouver and Surrey and also includes other service enhancements across the region. S.

Bond: The minister knows that we have been express- ing significant concern on behalf of the people of that par- ticular region of British Columbia about the fact that this will certainly lock in British Columbia as having the highest taxes on gasoline in North America. The other thing that I think that the minister, hopefully, will recognize is that in her initial comments about the budget, many members suggested that this was a no-new- taxes budget. Well, in fact, this is a tax, and it’s a new one. And it is going to add another cumulative impact to people, many of them who have the necessity to use a vehicle.

First of all, the minister is committing in this legislation that this tax increase, in terms of gasoline, will not exceed 1.5 cents. Is that correct? Hon. C. James:Y es, that’s correct. S. Bond: Is the minister prepared today to assure British Columbians that there will be no further additional gas tax increases? Hon. C. James: The member knows our commitment around the carbon tax each year and the changes to the carbon tax each year. But this is the only legislation com- ing forward that enables TransLink to be able to increase the gas tax. S. Bond: Thank you to the minister.

We’re certainly going to see a continued rise in the carbon tax. In fact, the decision to remove a revenue-neutral carbon tax is part of the chal- lenge for British Columbians. [4:25 p.m.] I guess…. If the minister would take a moment to try to explain to British Columbians. There is a 1.5 cent per litre increase coming in July. We see the carbon tax continuing to increase. How does the minister align that with a continuous mantra of this government related to affordability? Hon. C. James:Well, I know that we’re going outside the legislation and, certainly, outside of the

section that is here. But if the member wants me to discuss the various ways that we’ve made life more affordable for families, I can certainly go through that long list. I am happy to talk about the elimination of medical ser- vices premiums. I’m happy to talk about the child care pro- gram that we’ve introduced and the huge saving that is providing for families who have children in child care. I’m happy to talk about the child opportunity benefit that we’ve just run through here with the member. But I think it goes outside the bounds of this section.

I do think it’s important, though, to recognize again that, as a government, we have committed to funding 40 percent of the capital costs of the mayors’ ten-year vision. The federal 8290 British Columbia Debates Tuesday, April 9, 2019

government has also committed to their 40 percent, and the mayors are committing to their percentage. The mayors came forward as part of their plan to ask us if we would enable TransLink to utilize this 1.5 cents to give the option for people in the Lower Mainland to have a bet- ter transportation system and better commuting options. It’s certainly something that has been a critical issue and was in the municipal elections — a critical issue for Vancouver, for Surrey, for other areas of the Lower Mainland which are looking at the opportunities to expand transit and service enhancements across the region.

That’s certainly why the enabling legislation is forward: because TransLink and the mayors, as part of their vision, believe that this is the best way to be able to utilize those ser- vice improvements for people in their communities. S. Bond: Well, certainly, what isn’t outside of the scope of this act is the pain that the people are feeling at the pumps, which is about to be exacerbated by another 1.5 cent increase. Is the minister considering, and how would she accommodate, potential relief to motorists in British Col- umbia? How would it be accommodated within the current budget circumstances? Hon. C.

James:Again, we’re going well outside the

section that is here. I know the member has asked this question in question period and has received an answer, in fact, from the Premier directly, who said that he is reviewing the situation when it comes to affordability across the board, including the issue of gas. S. Bond:In fact, there is a fiscal impact of providing relief, so we’ll certainly wait. Apparently, that situation has been monitored for over a year now. We’re still standing here talk- ing about the highest gasoline taxes, in British Columbia, in North America, and this implements another 1.5 cents on top of that.

We’ve received some suggestions from British Columbians that would ask whether or not the minister would consider transparency when it comes to people purchasing gasoline. In other words, there is not a requirement at the moment for there to be an explicit explanation of the tax breakdown when a person buys a litre of gasoline. Has the minister or her staff or the government or anyone considered that element of transparency? So that when you fuel up, when you get your receipt, it actually lists very spe- cifically…. It would list, for example, this new 1.5 cents.

I think it is important for British Columbians to be able to see and understand exactly how much of that litre of fuel is going to governments at a variety of levels. Has the minister or will the minister consider initiating transparency at the pump so people can actually see on their bill, when they get it, how much of this tax they are paying and where it’s going? Hon. C. James: I thank the member for the suggestion. We could include the over ten cents a litre that were also implemented by the previous government, by the mem- bers on the other side, as well.

But I’ll take that under con- sideration. [4:30 p.m.] [R. Chouhan in the chair.] T. Redies:Minister, in Surrey, obviously, there is a general feeling that we need to expand SkyTrain down into Langley and for there to be other rapid transit solutions in the com- ing years. It’s a city that’s growing very, very quickly. I guess what I’m trying to understand is that the govern- ment is raising a lot of taxes. I think when I last calculated them it was over $13 billion, in terms of the new and increased taxes that the government has introduced.

The Premier has been rather hesitant to provide Surrey with any indication that he’ll support continued investment in SkyTrain. With all these taxes that are being raised, Minister, why can’t the government commit to greater funding for Surrey, when our rapid transit needs are so significant? Hon. C. James:This is well outside the

section that is here. I understand the member is standing up for her community and making sure she asks the question, but this is obviously a discussion for the Minister of Municipal Affairs, the discus- sion that occurs with TransLink. Our commitment, as a government, as the member knows, is to fund 40 percent of the capital costs of the May- ors Council ten-year vision. The mayors may change that vision; they may make their own decisions. I’ d leave those discussions to my colleague who’s responsible for TransLink. T. Redies:Well, going back to

section 27, then, if the min- ister doesn’t want to answer that question…. I believe the mayors have been meeting today and talking about having a defined fund, an annual amount so that there would be con- sistency in funding and so that they could get on with meet- ing the needs of people in the Lower Mainland in particular. Given where the mayors want to go — I think there’s been a lot of discussion in the press — on the motor fuel tax that is being described in

section 27, does the minister anticipate that there’ll be a request to increase that in order to meet the subsequent needs of the mayors’ plans? Hon. C. James: We’re dealing with the request that has come forward. That’s the request that has come forward, which is the 1.5 cents a litre to deal with, as you know, the next phase of the mayors’ ten-year vision. That’s the request that has come to government. That would cover off the 40 percent from the province, the 40 percent from the federal government and TransLink and the mayors’ vision, their portion. T. Redies:I guess what I’m asking is: if the mayors come Tuesday, April 9, 2019 British Columbia Debates 8291

forward with a request to increase the motor fuel tax in order to meet their subsequent rapid transit plans, will the province be supportive of that? Hon. C. James:We have a lot of work to do to have this portion of the vision move forward. My hope is that it gets going. So we’ll deal with what we have in front of us cur- rently. T. Redies:I wasn’t speaking to the current plan. I’m speak- ing to the plans that the mayors are already talking about, with respect to the UBC line and the further extension of rapid transit in Surrey.

Is the minister able to tell us whether or not the province will be supportive if the mayors come forward with a request to increase this particular tax by a further amount in order to fund subsequent plans? Hon. C. James: The response is the same. We have a plan in front of us. The mayors presented us with their plan. We have an agreement on the existing plan for the 40 percent. That’s the agreement that the province has put in. This is a plan that is going to take time, a number of years, to be able to implement.

As part of that request, TransLink came forward for the 1.5 cents a litre, and that’s what we’re dealing with. T. Redies: I don’t understand why this is so hard to answer. What I’m asking is… Just take the UBC line, which I believe is going to cost an extra $3 billion. If the mayors come forward with a plan and they ask to increase the motor fuel tax by another 1½ cents, is the province going to be sup- portive? [4:35 p.m.] Hon. C. James: As Minister of Finance, I’m responsible for legislation for specific plans that come forward. We’ve had the plan come forward.

I am bringing the legislation for- ward to enable TransLink to be able to deal with this part of the plan that is in front of us.

Section 27 approved. On

section 28. S. Bond: This is the second

section that deals with an increase of 1.5 cents per litre. Can the minister explain the difference between sections 27 and 28? Hon. C. James:Section 27 is on gasoline, and

section 28 is on diesel. S. Bond: We just want to confirm, then, that whether you use diesel or gasoline, you’re going to see an extra 1.5 cents added to the already highest tax rate in North America. That will happen on July 1? Hon. C. James:July 1 is the earliest that it could occur. For TransLink, this is enabling legislation, enabling TransLink to move ahead with that. Sections 28 to 31 inclusive approved. On

section 32. T. Redies:I’m just clarifying this. It appears to be provid- ing regulation-making authority for, I guess, some portion of the motor fuel tax. Can the minister explain what regula- tion-making authority is being provided here and what that will enable the minister to do without bringing it forward to the Legislature? [4:40 p.m. - 4:45 p.m.] Hon. C. James: I’ll try and explain this in a clear way. I think the first piece is that this amendment actually just simply moves the regulatory powers. We already have the regulation-making powers; they’re in a different

section of the act. This moves the regulatory powers to the

section of the act that talks about regulation. So that’s the first piece. It’s fairly straightforward. The current…. Well, I’ll go to collectors first. Collectors currently can deduct their allowance from their security. That’s current. The act, though, says that they can deduct their allowance from tax, rather than security. So it’s correct- ing again. It’s a housekeeping piece to correct that. Then the retroactivity piece, which is the piece that is added, will actually ensure that collectors who have been fol- lowing that practice — that we don’t have to go back and audit for four years.

There’s an audit period of four years, and it’s actually in place for the collectors to support the taxpay- ers so that we don’t go back four years, because it has been administrative practice. This is just cleaning up the act to fol- low that example that people have already been using.

Section 32 approved. On

section 33. T. Redies:My question that I’m going to ask next really pertains to the following, I guess, two sections. Really, again, it’s a broad question, Minister. Obviously, we know, as we’ve seen every financial bill that the minister and ministry has put forward under this government, that there has been a tendency toward ensuring the sharing of taxpayer informa- tion across different acts. It’s done, I believe, in the context of trying to prevent tax evasion.

I think there’s a bit of a disquiet here on this side — the sharing of all of this information in the auspices of prevent- ing tax evasion or identifying tax evasion. I guess I’m won- dering if the minister could give British Columbians some assurance that the sharing of all of this information is not being done in a way to identify further opportunities to 8292 British Columbia Debates Tuesday, April 9, 2019

tax British Columbians who are already feeling fairly taxed under this government. Hon. C. James:I appreciate the member’s comments. As the member will know, this is very similar to the previous sections that we went through where we already have the ability to share that information. Budget 2017, as I talked about before, provided the ability to share the information around the Income Tax Act and the homeowner grant.

Budget 2018 created the ability to share information between the Income Tax Act and land deferment. [4:50 p.m.] I just want to make sure that it’s clear that this informa- tion-sharing is not designed to increase taxes. This inform- ation-sharing, in any of the sections that we’ve talked about, is to ensure that people are paying their fair share. So people who are trying to avoid taxes are actually having to pay their fair share. It’s not about additional taxes. It’s not about increasing taxes. It’s about making sure, as every British Columbian expects, that…. They pay their fair share.

Others will be paying their fair share as well. That’s what the information- sharing is about — to make sure that people are paying their fair share. T. Redies: Thank you, Minister. I think we get that. However, again, the collection of all of this information and some new information under the speculation and vacancy tax has led to some disquiet, not just on this side of the House but, of course, with British Columbians, in terms of how all of this information is going to be used, how it’s going to be protected, etc.

Can the minister, again, give us some assurance that her staff are not going to be using this information to try and look for additional ways to tax British Columbians to meet other programs that this government might decide deserve funding? Again, particularly property owners in this province are feeling the pinch and are about to feel the pinch extremely this year with the implementation of all of these various property taxes. I think what we’re looking for are some assurances that this is purely for tax evasion, to stop tax evasion. When the minister talks about fairness, I guess….

What’s her interpret- ation of what’s fair? Again, what we’re looking for is that this is not an information-gathering exercise to, essentially, tax more and more British Columbians. Hon. C. James: There isn’t anyone, I wouldn’t expect, in this Legislature who wouldn’t expect that if information is being gathered, it’s used for the purpose that it’s gathered for. I think that would be an expectation. Certainly, I think it’s important to note the seriousness and the important work that’s done by staff when it comes to that work. I think they take their role very seriously. I’ve talked….

I know we’ve had a discussion about the work and the support of staff during this bill debate, but I think it’s important to note, again, that the people of British Colum- bia — not government, not the opposition but the people of British Columbia — are incredibly well served by the staff who work in the Ministry of Finance and the staff who work across government. [4:55 p.m.] Part of that is the requirement to ensure that they are fol- lowing their duties, which means making sure that informa- tion and the use of information are consistent with their leg- al obligation. That is critical.

Our office, as we look at information-sharing, works very closely with the Privacy Commissioner’s office. We ensure that we’re working closely with them. We ensure that we have a rigorous process in place and that that’s followed and that the information is very specific to the exchange within the revenue division. As I said, ensuring that a tax system is administered fairly and that people are paying their fair share is critical. Every time someone takes an opportunity to evade a tax, that impacts every British Columbian who’s paying their fair share.

That’s why you see the kind of information-sharing that’s here. Is it a rigorous process? Are we ensuring that the inform- ation is only being utilized for the requirements under our legal obligations? Y es, we are. T. Redies:Let me be clear. I have absolutely no concern with respect to our very talented staff in the Finance Min- istry. What I’m concerned about is the government, for its own purposes, using this information as a way to identi- fy more opportunities to tax British Columbians. That’s something that we, on this side of the House, are very con- cerned about. With that, I’m going to sit on

section 33, but my colleague from Kelowna West has a question on

section

Section 33 approved. On

section 34. B. Stewart:In terms of the data collection that the Min- istry of Finance is embarking on collecting here. I guess, first of all, I’ d just like to ask the minister if she acknowledges that this is a significant increase in collection of personal data for the ministry to be responsible for. Hon. C. James: Again, I’ll remind the member that this

section is referring to a typo. That’s the piece that’s coming forward, a typo. I think that’s just important. There’s a cor- rection of a typo, with the word “act” twice. That’s the

section that we’re talking about. [5:00 p.m.] No, I would not agree with the member when he speaks about the information collected, presuming he’s speaking directly about the social insurance numbers. Social insur- ance numbers are currently collected by tax filing, by prop- Tuesday, April 9, 2019 British Columbia Debates 8293

erty transfer tax, and certainly, they’re utilized for verifying tax information. A social insurance number is utilized for that purpose. B. Stewart:Just in terms of this. Sorry, I didn’t pick up on the fact that this was just a correction on the act. In terms of the data and the collection, I think that the breadth of the expansion of the data…. As my colleague from Surrey–White Rock mentioned earlier, there is the pos- sibility of people thinking that with this amount of data, they have the ability to maybe look deeper or look at areas.

I don’t think there’s anybody on this side of the House or that side that doesn’t think that people should pay their fair share of taxes. What I think we are concerned about — we raised this in estimates with her colleague the Minister of Citizens’ Services — is the data that is being collected as part of the speculation and vacancy tax. What we do want to see and what we want to ensure is…. We want to know that that information is protected. There is an outside service provider that’s been hired to work with this.

We obviously always have concerns, as they do, but how do they foresee managing this increased data and the protection of people’s personal information in addi- tion to the data that they already are responsible for? Hon. C. James:I think there are already in the Ministry of Finance — as I mentioned earlier, the Ministry of Finance collects sensitive information around taxation — very secure processes in place. This is no different. As secure information comes in, as I mentioned earlier, we always make sure that the use of the information is consistent with our legal oblig- ation. That’s our requirement.

That’s our requirement as a ministry. That’s a requirement for staff. There’s a very rigor- ous process in place already to address that. Certainly, any tax information that comes forward, we work with the Privacy Commissioner’s office to go through that process. As the member has said, if we’re looking for ensuring that taxes are paid fairly, making sure that we can do that tracking is part of that. That’s handled, as I said, in a rigorous way, in a protected way and a secure way, as it always has within the Ministry of Finance. Sections 34 and 35 approved. On

section 36. S. Bond: This relates to the provincial sales tax. This sec- tion adds some

definitions. Perhaps the minister can explain why this change is being made and, in particular, perhaps an explanation as to why there is the singling out of a retail sale. It’s in sub (

b) of the section. What exactly is the purpose of the change? And perhaps reflect for us a bit on why the exclusion of a retail sale. [5:05 p.m. - 5:15 p.m.] Hon. C. James:Member, thank you for your patience. On this one, I want to make sure I’ve got the

definitions correct around the “wholesaler” and “small seller, ” as the member was asking. I think maybe it’s just worth running through an example of a wholesaler and what happens to the tax, a retailer and what happens to the tax and a small seller and what happens to the tax. A wholesaler, for example, sells to retail. The wholesaler doesn’t pay the tax. The retail doesn’t pay the tax. The cus- tomer pays the tax. That’s the chain that would occur as you were going through this. A small seller, for example, could be someone who is selling jam at a community market. They pay the tax; the customer doesn’t.

This clause, to make sure that a wholesaler isn’t also included under the definition of a small seller, is to prevent double taxation. Because if a wholesaler was also a small seller, they will have already paid the tax as a small seller. Then they sell to retail. Retail collects the tax again. Basically, you end up with two taxes on that product. This is a defini- tion that, in fact, supports not double-taxing, by saying that the wholesaler cannot also be included under the definition of a small seller. S. Bond: Thank you to the minister.

I was actually going to ask for a scenario that might explain it, so that was helpful. Can the minister describe how many people she thinks are going to be impacted by the change? And does she expect any small sellers to actually be impacted by this change directly? Hon. C. James:We don’t expect that this will impact very many people. A small seller is very unique. They have to sell under $10,000 a year. They have to have no established place of business. So we don’t expect that there would be many people who would want to be doing these.

They obviously could opt out from being a small seller and become a whole- saler if they wanted to. That’s there for them. But because of the definition of small seller and because of the uniqueness of the people who are in this category, we don’t expect that this will impact very many people, if any.

Section 36 approved. On

section 37. T. Redies:What is the purpose of clarifying promotional sales here? [5:20 p.m.] Hon. C. James: This a timing issue. I think that’s the best way to describe it. Let’s look at what a promotional distributor does. They’ll purchase materials for resale in a promotional sale. That’s basically what they do. And if they document that fact…. If they are purchasing materials for resale and they sell them in a promotional sale and they’ve documented that fact, then the tax is payable by the dis- tributor on the lower price after the sale. It doesn’t mean 8294 British Columbia Debates Tuesday, April 9, 2019

that we get less tax, because the balance of that tax is paid by the customer. It’s divided, so they have to make sure that they document that. There is a timing issue. If a distributor is required to pay the tax at the time of purchase of the promotional materials for resale, what this amendment will do is allow a refund to be paid by the director. So it’s a timing around when they sell and when the determination is made. This provides an opportunity, as I said, for a refund to be provided by the director if they haven’t documented the fact that they are purchasing these materials for resale and therefore paid the full tax. Sections 37 to 39 inclusive approved. On

section 40. S. Bond: Just a bit of follow-up, then, on when tax is pay- able in respect of promotional material. That’s the heading of

section 40. Did the province previously not charge PST on promotional sales? [5:25 p.m.] Hon. C. James:Y es, they did pay PST. That was there. This really is a housekeeping amendment. It related to the rein- troduction of PST in 2013. It’s reinforcing the practice that is already in place and making sure that’s consistent with the legislation.

Section 40 approved. On

section 41. T. Redies:Again, sections 41 through 43. Am I right in…? Are these connected to, again, tidying up from the return to the PST in 2013? Is that what necessitated these changes, or is it something else? Hon. C. James:The member is correct. The amendments just eliminate any risk that the obligation to pay the tax might be challenged. It ensures that people know that if they have to pay the tax, they have to pay the tax. And that’s the next few sections, as the member mentioned. Sections 41 to 43 inclusive approved. On

section 44. S. Bond: It seems fairly straightforward if a vehicle is licensed quickly in British Columbia. Was there a specific reason that this

section was added? Was there an issue? Does the minister expect a significant number of vehicles to be affected by this change? [J. Isaacs in the chair.] Hon. C. James: The member is right. This is fairly straightforward. This is ensuring that the relief is clear for vehicles that were purchased both inside British Columbia and outside British Columbia. [5:30 p.m.] We did have an example where a bus was purchased and this wasn’t as consistent as it should have been. This amend- ment ensures that we address that inconsistency and that vehicles are treated the same regardless of where they are purchased.

Section 44 approved. On

section 45. T. Redies:Is this

section changing the present responsib- ility for PST collection with regards to vehicle purchases in a substantive manner? Given that there seem to be two scen- arios contemplated in this section, which is assumed to be the more common in a standard transaction? Hon. C. James:Maybe I could just ask the member to be specific about the question. This

section 45 is related to the

section previously and is simply consequential to the amend- ment that was there. I may have missed the specific clause, but basically, it’s simply a consequential amendment to the previous clause that we talked about. Sections 45 to 47 inclusive approved. On

section 48. S. Bond:As I understand it is, this is related to designated accommodation areas and recipients. Could the minister explain what caused these amendments to be made? In par- ticular, with regard to alternative recipients, would these mostly be tourism agencies? How would these alternatives be evaluated? Hon. C. James: This is again a housekeeping cleanup of a “just in case. ” Y ou’ll see that there are a number of those. Obviously, as we’ve gone through the bill, there are a number of those pieces that are in place. This is another one of those where there wasn’t any process in place.

For example, if a designated recipient who was receiving the funding shut down, what would occur? So this is a cleanup, from that per- spective, to enable that transfer of the revenue to govern- ment if a designated recipient closed down. We don’t have an example of a designated recipient. This hasn’t occurred, but it’s an important housekeeping piece, obviously. If there’s government money there and someone is receiving it and they shut down, this will enable notice to be given to government of any kind of dissolution that may occur.

It will enable government to hold the revenue until a new designated recipient could be put in place. As the member knows, often those are tourism organizations, etc. Tuesday, April 9, 2019 British Columbia Debates 8295

So it would allow that to occur. That’s, basically, what this provides for. S. Bond:Just to clarify, then, the intention, though, would not be to see the funding permanently forfeited to govern- ment. There would be a transition to another designated agency, and the funds would be returned? [5:35 p.m.] Hon. C. James:That’s correct. That’s to ensure that these dollars are used for the purpose that they are given and to ensure that there is someone else there to be able to take over those dollars. Sections 48 to 50 inclusive approved. On

section 51. T. Redies: With respect to

section 51, we’ve seen that, currently, misinformed real property contractors have been found owing amounts of back PST that have actually proved quite catastrophic to their businesses as a result of improper collections of PST on real property sales. In fact, I think my learned colleague from Kamloops–South Thompson has raised a number of these issues with the ministry. Is it possible, with this particular

section and the obliga- tion to repay as seen in this section, that it could result in, again, another issue of double collection that we’ve already seen with the real property contractors owing back PST? Hon. C. James:In fact, this is almost the opposite of what the member has described. This is back to the timing issue that we talked about a few clauses ago, where, if a promo- tional distributor doesn’t track, as I talked about, doesn’t document the fact that they’re purchasing the promotional materials for resale in a promotional sale, then they may pay the full tax on those.

They don’t have to pay the full tax if they’ve documented. That’s the tax law. So this enables a refund actually to go back to the promotional buyer if they haven’t actually done the tracking that they should have to make sure that they didn’t pay the full tax.

Section 51 approved. On

section 52. S. Bond: Simple question. Can the minister just confirm if PST is now refunded if someone returns a car, from the moment they buy it? Hon. C. James:The PST will be returned on the amount provided by the manufacturer. This is mainly for vehicles that have huge defects. They go back to the manufacturer. The manufacturer refunds whatever amount they refund, and the PST refunded will be based on the amount — that’s right — that is provided by the manufacturer back to the customer. Sections 52 and 53 approved. On

section 54. [5:40 p.m.] T. Redies:Section 54 deals with grounds for suspension or cancellation of a person’s registration under

section 168 of the act. What is the goal of the added conditions for licence suspension or revocation under this section? Hon. C. James:This is another one of those housekeeping pieces that we talked about earlier in a number of clauses, where we’re looking to clean things up. We have a set of standards in place for people who want to register, to become a registered collector. They have to follow that criteria, and then they get registered to become a col- lector. But the same conditions don’t apply after they become a collector.

If someone commits something that wouldn’t allow them to become a collector or to register as a collector after they’ve registered, it doesn’t provide the ability to be able to address that. Basically, what this will do now is ensure that the same conditions that they had to go through to be able to be a registered dealer will apply after they’re a registered dealer, as well, and give us the authority and the ability to be able to address that. [5:45 p.m.] The member asked for an example. It might be some- one…. Y ou have to be a dealer, and you have to have a deal- er’s licence to be able to be a collector.

They might have let their dealer’s licence lapse. That would have prevented them from registering, but if they do it afterwards, we can’t go in and address it. So this will allow the same conditions that apply for registration to apply after you have been registered as a dealer as well. T. Redies:Just exploring this a little bit further. Subsec- tions (1) and (3)(

g) appear to relate to the on-line accom- modation platforms, like Airbnb. Can the minister confirm why the government would need to revoke a PST registra- tion for any of these providers? In what circumstances would the government no longer consider someone to be suitable, as contemplated under subsections (1) and (3)(i)? Hon. C. James:I believe I’ve got it right. The

section that the member is talking to speaks to people who are PST collectors based outside of Canada, which would include the Airbnb issue. The question is around why they would no longer be suitable as PST collectors. We would have an agreement in place with those individuals. If they violated that agreement or if the agreement lapsed — for example, the agreements include things like ensuring that they follow our 8296 British Columbia Debates Tuesday, April 9, 2019

legislation, ensuring that those rules are in place — then we can remove them as collectors. Sections 54 to 59 inclusive approved. On

section 60. [5:50 p.m.] S. Bond: There are a number of sections related to the Small Business Venture Capital Act. Just a general question that relates to those sections. Could the minister identify for us how many participants are currently involved in the tax credit program and, perhaps, give us a sense of the mag- nitude of the level of investment that’s been attracted to date? Hon. C. James: There were roughly 2,000 certificates — that includes individuals and corporations — in 2018, and there were $31 million in credits given out.

Section 60 approved. On

section 61. T. Redies: Just, again, a couple of brief questions. Can the minister address how adding the TFSA

definitions will impact the tax credit? How common is it for TFSA holders to purchase and dispose of equity shares to which this tax cred- it may apply? Hon. C. James: This is more a modernization of the act to make sure we’ve got all the tools that are in place. I think the member is quite correct. It’s not common, and we’re not sure how common it will become. We wanted to make sure, while we’re looking at amendments and housekeeping, that we clean up and that we add and modernize the act. [5:55 p.m.] Obviously, TFSAs are much more common — not for this purpose but much more commonly used.

TFSAs will have the ability to participate within the rules of the existing pro- grams. We do not, at this time, expect it to be a big change. Sections 61 and 62 approved. On

section 63. T. Redies:Just a brief question. Why was this provision added? What’s the context here for, I guess, preventing a ven- ture capital corporation from issuing a convertible rate? Hon. C. James:The member is right. This clarifies that a venture capital corporation must not issue a convertible rate. As you know, in a previous se

Document details

Collection	British Columbia — Debates (Hansard)
Citation	20190409pm-Hansard-n236
Type	hansard
Volume / chapter	20190409pm Hansard n236
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	b098c2e8155aed39121903ec481c870d3b8d8b80

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