2010 Legislative Session: Second Session, 39th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Wednesday, April 28, 2010

Afternoon Sitting

Volume 16, Number 3

CONTENTS

Page

Routine Business

Introductions by Members

Introduction and First Reading of Bills

Bill 16 — Armoured Vehicle and After-Market Compartment Control Act

Hon. M. de Jong

Bill 17 — Clean Energy Act

Hon. B. Lekstrom

Statements (Standing Order 25B)

Day of Mourning for workers

R. Howard

C. James

Rotary Club of Surrey Wine and Food Celebration fundraiser

D. Hayer

Velox Rugby Club

L. Popham

Multi-sport relay in Comox Valley

D. McRae

Kabaddi

H. Bains

Oral Questions

Impact of harmonized sales tax on economy

C. James

Hon. C. Hansen

Government information on harmonized sales tax

C. James

Hon. C. Hansen

B. Ralston

D. Donaldson

Impact of harmonized sales tax on economy

D. Donaldson

Hon. C. Hansen

Impact of harmonized sales tax on real estate costs

S. Simpson

Hon. C. Hansen

Impact of harmonized sales tax on summer camp fees

N. Simons

Hon. C. Hansen

Treatment of teacher by Little Flower Academy

R. Austin

Hon. M. MacDiarmid

Impact of harmonized sales tax on summer camp fees

G. Coons

Hon. C. Hansen

Speaker's Statement

Standing divisions on Bill 9

Petitions

M. Mungall

Orders of the Day

Committee of the Whole House

Bill 9 — Consumption Tax Rebate and Transition Act

B. Ralston

Hon. C. Hansen

D. Donaldson

S. Chandra Herbert

L. Popham

N. Simons

V. Huntington

K. Corrigan

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Children and Family Development

Hon. M. Polak

M. Karagianis

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WEDNESDAY, APRIL 28, 2010

The House met at 1:36 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

J. Horgan: Joining us in the galleries today are two very good friends of mine. Another chip off the old Blarney stone, Michele Murphy is here joining us, and also Kim Manton, who is better known to many members on this side of the House as Sewage Girl.

Yeah, Sewage Girl, hon. Speaker. She's been advocating on behalf of CUPE to ensure that any sewage treatment processes that happen in the capital regional district are publicly owned and publicly operated. Would the House please make my friends Michele and Kim very, very welcome.

Hon. J. Yap: I have four guests to introduce today: Andrea Foster from Climate Project Canada; Ian Bruce from the David Suzuki Foundation; and two very special guests, two outstanding athletes, Justin Lamoureux, member of the Canadian snowboard team, seventh place in half-pipe 2010 Vancouver Winter Games — the best Canadian half-pipe result in an Olympic Games; and also Adam Kreek, former member, Canadian rowing team, gold medallist, 2008 Beijing Summer Games.

The topic that I'll be discussing with them when I meet with them later this afternoon will be the program Play It Cool. This is the largest carbon-neutral athlete-driven program in North America. With over 60 Canadian elite athlete members and counting, Play It Cool athletes' positive actions have inspired Canadians to reduce their own carbon footprints, including the organizers of the Vancouver 2010 Winter Olympics, VANOC. In addition, over 500 NHL players have gone carbon-neutral through this program. Would the House please join me in welcoming these four guests.

K. Corrigan: I too would like to welcome my ex-colleague, friend and coordinator, Kim Manton, who coordinated the very successful and long campaign to make sewage treatment in the CRD a public service. I hope you'll again make her welcome.

T. Lake: In the House today I have a friend visiting from Kamloops here on business. Steve Fritsch works with Urban Systems, and I'm sure many local government leaders that are now in the House are familiar with the great work of Urban Systems, currently working on the Kamloops sustainability plan. Steve worked with us on the Kamloops Airport Authority when we were first visioning the expansion of the airport. We're also teammates on a pretty darn good soccer team, the Platinum Rangers. Please welcome Steve to the House today.

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N. Simons: Today on the International Day of Mourning for workers who were injured or killed due to occupation, I'm pleased to introduce to the House a man who has worked tirelessly on behalf of disabled workers and their families.

Many of you in this House know Darrell Powell, who despite his own health limitations continues to act as a national advocate on mental health and disability issues. It's my pleasure to introduce him to the Legislative Assembly today, and I ask that members join me in welcoming him here.

Hon. G. Abbott: In the gallery today is a friend and former executive assistant much known for his very accurate impressions of a number of members of this House and former Houses over the years. Jeremy Walden has enjoyed much success in the last few years at the University of Calgary law school. It's a great pleasure to welcome him back, and I ask the House to join me in making him welcome.

B. Ralston: Joining us in the House today is Val John, who resides in the Gordon Head area of Victoria. She's originally from Saltspring Island. She's a local activist and mother who's keenly interested in provincial politics and is teaching her seven-year-old son all about democracy. Could the House please make Val welcome.

Hon. R. Hawes: While I don't see them in the gallery yet, we'll soon be joined by 28 students from the Dasmesh Punjabi School from Matsqui village, along with their teacher Linda Burton. They will be here, I know, for question period, where I'm sure they're going to hear questions put with great courtesy and answers listened to politely and attentively.

J. Slater: It is my pleasure to introduce three guests to the gallery today. Marlene Lipps has been a stalwart volunteer in the town of Osoyoos for decades. As I was on council for 18 years, she put me in my place very many times. I appreciate all the work that she's done for her town.

I would like to also acknowledge her son Al and Hermine, Al's wife. I would like the House to make them very welcome.

Hon. M. MacDiarmid: In the gallery today we are joined by 45 grade 5 students from Vancouver Talmud Torah independent school in my riding of Vancouver-Fairview. These students are joined by parents and led by

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teacher Lisa Romalis, and I would like the House to join me in making them warmly welcome.

M. Dalton: Visiting with us today in the gallery is Paul Forseth from New Westminster. Paul was a Member of Parliament for 13 years, serving with the Reform Party, the Canadian Alliance and the Conservative Party.

Today he made a presentation to a group of MLAs. He's a board member with the Fraser River Discovery Centre. Its goal as a centre, which is at the Westminster Quay, is to create a place that connects individuals to the river's history, its people, its industry and its environment. Would the House please make him feel welcome.

L. Reid: We are joined today in the legislative precinct by students from the Jewish Day School in the riding of Richmond East. They are enjoying a glorious day here in Victoria, and I'd ask the House to please make them welcome.

Introduction and

First Reading of Bills

Bill 16 — Armoured Vehicle and

After-market Compartment

CONTROL Act

Hon. M. de Jong presented a message from His Honour the Administrator: a bill intituled Armoured Vehicle and After-Market Compartment Control Act.

Hon. M. de Jong: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. M. de Jong: Bill 16 fulfils two commitments contained in the government's seven-point plan to combat gang and gun violence. Armoured passenger vehicles, the evidence shows, facilitate gang and gun violence. They embolden gang members, give them a feeling of invincibility and a feeling that they can act violently and with impunity.

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Police have also raised the issue and the concern of hidden compartments contained in vehicles and installed in vehicles after their manufacture. These after-market compartments are used by gang members to hide not just weapons but also drugs and cash, and to further illegal activities.

This legislation, firstly, creates an offence to operate an armoured vehicle unless the operator is exempted specifically by regulation. That would apply to armoured vehicles used for law enforcement agencies and licensed security companies that use armoured vehicles for proper purposes. All other persons wanting to operate an armoured vehicle would be required to apply for a permit from the registrar of security services under the Security Services Act.

Secondly, also under this legislation, it'll be an offence to have an after-market secret compartment installed in a vehicle. It's recognized that there are very few legitimate reasons for needing an after-market compartment. Exemptions will, however, be provided for by regulation. Police, under this legislation, will have the authority to seize armoured vehicles that are operated by persons without a valid permit and vehicles that they suspect contain hidden after-market compartments.

I move that the bill be placed on the orders of the day for consideration at the next sitting after today.

Bill 16, Armoured Vehicle and After-Market Compartment Control Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 17 — Clean Energy Act

Hon. B. Lekstrom presented a message from His Honour the Administrator: a bill intituled Clean Energy Act.

Hon. B. Lekstrom: I move that Bill 17 be introduced and read a first time now.

Motion approved.

Hon. B. Lekstrom: I'm pleased to introduce into the House today the Clean Energy Act. This government has set out a new vision to be a leading North American supplier of low-carbon energy and technologies, and clean, reliable and competitively priced power. The Clean Energy Act is a key step in achieving this vision.

The act clarifies government's role in setting strategic direction while preserving the B.C. Utilities Commission's role in regulating utilities and costs. The act provides the legislative foundation for three priority areas: (1) ensuring electricity self-sufficiency at low rates, (2) harnessing British Columbia's clean power potential to create jobs in every region, and (3) strengthening environmental stewardship and reducing greenhouse gases.

The act will ensure that future power needs of British Columbians can be met at low rates by increasing our commitment to conservation, by expanding B.C.'s publicly owned electricity system, by encouraging new investments in independent power, by streamlining planning processes and strengthening our Crown utilities.

Through this act, we will maximize the value of our clean and renewable resources to create jobs and benefits for all British Columbians by implementing a new

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model that enables a partnership between government, B.C. Hydro and renewable power producers to become a supplier of choice for clean energy in Canada and the United States. We will do this without subsidies or risks to ratepayers or taxpayers.

We will expand our transmission and distribution systems as well as create a First Nations clean energy business fund to enable First Nations partnerships in clean power. The act includes direction to expedite key strategic projects that we know we need today, creating jobs throughout the province.

The act will strengthen our environmental stewardship and reduce greenhouse gas emissions by increasing the clean or renewable generation target from 90 to 93 percent; by prohibiting the development of energy projects in parks, protected areas and conservancies; by amending the Environmental Assessment Act to specifically provide for assessment of cumulative environmental effects; by enabling consumers to manage their consumption and reduce costs with smart meters; and by enabling new utility programs to encourage the use of clean or renewable energy and vehicles powered by electricity, natural gas and hydrogen.

This bill will keep British Columbia at the forefront of clean energy development in North America.

I move that the bill be placed on the orders of the day at the next sitting of the House after today.

Bill 17, Clean Energy Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements

(Standing Order 25B)

DAY OF MOURNING FOR WORKERS

R. Howard: I note today that the flags are flying at half-mast outside the Parliament Buildings. It is because today is the annual National Day of Mourning.

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On this day we remember those workers who have been killed or injured on the job. On behalf of all members of this House, I offer our condolences to those families that have lost loved ones due to workplace injury or illness.

In the past year 121 workers died — 62 on the job and 59 from work-related diseases. More than 94,000 were injured. Everyone deserves to come home safe at the end of the day's work. When they don't, everyone is affected — families, colleagues, neighbours and indeed communities.

Safety should be everyone's concern and everyone's responsibility. We have a tendency to think this is the responsibility of WorkSafe B.C. While it's true that they are there to support those who are injured on the job as well as families who carry on in the wake of the death of a family member, employers, employees, supervisors and workers also need to ensure workplace health and safety.

Today in many communities around the province, there have been and will be ceremonies to recognize this important day. I am told that by the end of the day, some 80,000 workers at over 500 worksites will have gathered to mourn colleagues lost and colleagues injured in the workplace.

In my own community of Richmond, the B.C. Fish Harvester Association is holding a special ceremony to mark this day. I ask that the House join me on this National Day of Mourning to remember the 121 workers who lost their lives in the workplace this past year and the 94,000 others who were injured.

C. James: I also want to speak about the Day of Mourning today, April 28. It's a day when British Columbians gather together to mourn the loss and resolve that every B.C. worker be safe, that every worker be treated with respect and dignity.

Last year in B.C. 121 women and men left their families and loved ones to go to work and never returned. Thousands more suffered serious workplace injuries. For these injured workers, life will never be the same again. For the families of those injured and killed, the grief can last and last.

On March 7 of this year I attended a vigil in memory of the three women farmworkers killed in a tragic accident in Abbotsford three years ago. We gathered to remember these workers and to support their families on this very difficult anniversary.

We also gathered together as a call to action. As I've said before, every road that's built, every tree that's cut, every berry that's picked takes great effort and sometimes comes with the risk of injury or death. Some workers, like farmworkers, have too few protections and often work for very low wages. I ask today that all of us renew our commitment to making all workplaces healthy and safe for every worker, for every British Columbian.

Mr. Speaker: I would ask all members to stand for a moment of silence.

ROTARY CLUB OF SURREY Wine and

Food Celebration fundraiser

D. Hayer: I would like to congratulate the Rotary Club of Surrey for the work they do to enhance our community. I especially want to commend them for hosting their annual Rotary Wine and Food Celebration, which they held at the Surrey Central City Shopping Centre.

Proceeds from that wonderful event are going towards the Surrey Rotary Club's commitment to build a new patient information library and resource centre at

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the B.C. Cancer Agency, Fraser Valley Centre, next to Surrey Memorial Hospital, which will provide a variety of educational and informative resources to cancer patients and their families.

I want to thank all the volunteers, participants and attendees who helped make this event so successful.

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Among the many who volunteered were Janis Foster, Mary Jane Stenberg, Tricia Townsend, Michele Gruenhage, Palek Trehan, Kate Ludlam, Mei Li Chong, Alan Champion, Michelle Mackay, Trevor Armstrong, Deane Gurney, Duane Buchanan, David Attfield, John Campbell, John Koropatnisky, Paul Hatch, Roy and Yoshiko Holman, Walt and Shirley Johnson, Bryce and Dale McElroy, Lorne and Bonnie Swindells, Dick and Mary Wareham, Jim and Ester Parren and my wife Isabelle Hayer and my children Sonia, Anthony and Katrina Hayer.

Media sponsor was the Surrey Leader. Music sponsors were West Coast Harmony, Circle of Friends and Emma Attfield. Other contributors included the Central City Shopping Centre, Blackwood Partners, Kwantlen Polytechnic University, Hamilton Duncan Armstrong and Stewart, RBC Royal Bank, Super Save Group and Surrey Board of Trade. Also, Jassa Grewal, Allied Insurance Services, Cactus Club, Ricky's Restaurant, Coast Capital Savings, PriceSmart Foods, Safeway, Starbucks Coffee, Cobs Bread, the Original Cakerie and 11 local vintners helped make this event very successful.

I ask the House to join me in congratulating and thanking everybody who made this event so successful.

VELOX RUGBY CLUB

L. Popham: Rugby is a beastly game played by gentlemen, and in the case of modern rugby, it's a beastly game played by gentlewomen.

The Velox Rugby Club was founded here on southern Vancouver Island by Gordie Hemmingway in the 1968 rugby season. Members of the club at that time were an offshoot of players who had left the James Bay Athletic Association. They wanted to play a more wide-open style of rugby with a running attack second to none. Approval was gained from the Vancouver Island Rugby Union, and the new team was formed.

Velox omnia vincit is Latin for "speed conquers all." The original philosophy of Velox was fast, open play, and today the laws have changed in rugby to promote the idea of fast, open play in the game, proving that Velox was ahead of its time.

Several years after the team was formed, Velox Rugby gained a clubhouse. One of the Velox player's parents, Jim Hume, a well-known Victoria journalist, moved out of his leased home. Three months later Velox took over the rent payments, and 3957 Gordon Head Road became the official home of Velox Rugby.

Developing youth rugby is very important to the Velox Rugby Club, and they have made sure that they continue to support a philosophy of no child on the sidelines. With the dedicated support of dozens of volunteers, the club always finds a way to make sure that any child who comes to play gets the opportunity.

Velox also leads the way in developing girls' rugby. All of the clubs in Victoria have girls at youth levels, but Velox is the only club in Victoria that managed an under-18 girls' side.

Rugby has done well to hold the line on membership costs and has one of the lowest costs for families, enabling them to enjoy a fast-paced sport that encourages teamwork and camaraderie even with the opposition — a little strategy we could use in this House.

I would like to congratulate the Velox Rugby Club on 42 years of teamwork, and I would like to thank them for adding to our quality of life here on southern Vancouver Island.

MULTI-SPORT RELAY IN COMOX VALLEY

D. McRae: This past weekend the Comox Valley celebrated the 25th anniversary of the annual Royal LePage Snow to Surf race. For those of you in the House not familiar with this multi-sport relay event, please let me enlighten you.

The event is limited to 175 nine-person adult teams and 50 junior teams, so almost 2,000 athletes participate in the event. While the majority of athletes are from the local area, it is not uncommon for participants to travel from across the nation to join a team.

The race begins on Mount Washington, where downhill racers run several hundred metres to the top of the ski hill, jump into their skis and race down the mountain. It doesn't sound too difficult, but when you're running up a steep slope at 5,000 feet in your ski boots, you experience a new kind of pain.

The downhiller passes off to a Nordic skier. Fortunately, there was ample snow on the mountain this year, but there have been years when lack of snow has forced the skiers to run the eight-kilometre leg.

The Nordic skier passes off to the first of two runners. The runners race approximately seven kilometres down the steep Mount Washington road to the base of the mountain, and here the mountain bike leg begins with riders racing both on road and on trail to Comox Lake.

The kayak leg begins here, and the paddler takes a five-kilometre route across the lake to the next athlete. At this point, road bikers take charge and race 30 kilometres through the village of Cumberland, down to Royston and into the city of Courtenay. Once reaching the Courtenay River, the biker passes off to the canoeist, and these two paddlers travel five kilometres from the Courtenay estuary into Comox Bay, reach the Comox

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marina, jump out of their canoe and, after a short sprint, ring a bell to signal their finish.

The event has come to symbolize what the Comox Valley is all about. It encompasses many popular activities that local residents love to participate in, and the various stages of the race show off the scenic beauty of the area from the snow-capped mountains, the beautiful forests and lakes to the amazing ocean vistas. You cannot take

part in this event without realizing how fortunate one is to live in the Comox Valley.

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I want to thank the legions of volunteers, the athletes and the community for 25 years of hard work. I know sometimes the challenges you all have faced seem monumental, but your efforts are appreciated by all. Thank you so much and best of luck to the organizing committee for the planning of next year's race.

KABADDI

H. Bains: While we are pulling for the Canucks to bring the Stanley Cup home for the first time, which I'm sure they will, another season is opening up for just as exciting a game, although this game is not as much talked about outside of the Punjabi community. But in that community, it is the talk of the town.

Kabaddi season is opening up this weekend at Kabaddi Ground at 144th Street and 64th Avenue in Surrey. Almost every weekend thereafter during the summer, tens of thousands will flock to Kabaddi Ground in Surrey to enjoy this exciting game.

The game is about 4,000 years old and is considered to be the mother of all games in Punjab. The game consists of two 20-minute halves with a break of five minutes for a change of sides. The kabaddi playing area is 12.5 metres by ten metres and is divided by a line into two halves.

A raider from one team, starting from the dividing line, raids players on the opposite side. In 30 seconds he is to touch a player of the opponent team and make it back to his side of the court. If successful, he shall be awarded one point. If a defender on the other side holds the raider and stops him from touching the dividing line, points shall be awarded to the stopper's team. Both teams alternate at raiding, and the team with most points during the allotted time wins the match.

It is a team sport which requires both skills and power and combines the characteristics of wrestling and rugby. Kabaddi is growing fast, and today many non-Punjabis are participating on different teams across Canada, Europe and the United States. The community, players and organizations are working hard to have kabaddi recognized as British Columbia's game, alongside our other popular sports. They are confident that this game soon will become a showcase of any provincial and national tournament and eventually will be an Olympic game.

I invite all members of this House to come and enjoy this game played on most weekends at Kabaddi Ground next to the Bell Centre in Surrey or look out for it in your own town and go out and enjoy this exciting game. You'll love it.

Oral Questions

IMPACT OF HARMONIZED SALES TAX

ON ECONOMY

C. James: Since the government snuck in the HST last July, both businesses and consumers have expressed concern about its negative impact on the economy. The latest Conference Board of Canada report shows that B.C. saw a sharper decline in consumer confidence than any other region in the country — a 28 percent decline. The author of the report says the HST is contributing to it.

My question is to the Minister of Finance. During a time of tentative economic recovery, why are the B.C. Liberals hitting B.C.'s consumers and businesses with a new tax that is damaging consumer confidence and hurting our economy?

Hon. C. Hansen: The Conference Board of Canada is also the organization that says that British Columbia is going to lead Canada in economic growth. It's the Conference Board of Canada that has done studies looking at the implementation of the harmonized sales tax in Atlantic Canada which show that the vast majority of embedded PST costs get passed on to consumers — something that the official opposition is denying.

It's the Conference Board of Canada that recognizes that British Columbia over the last eight years has been a leader in job creation. We're going to keep that going, and it's going to be because of the adoption of the harmonized sales tax that British Columbia will continue to be the job generator in Canada.

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

C. James: I'd like to remind the Minister of Finance that it's also the Conference Board of Canada that says we've had a 28 percent decline in consumer confidence, and the HST is playing into that decline in our economy.

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Here's what the author of the report had to say: "With the HST, people don't know how that's going to play out." They are "putting off purchases." Again to the minister: why would the B.C. Liberals impose a tax that hurts consumers and hurts businesses just as B.C. struggles to recover in the economy?

Hon. C. Hansen: Well, I think the Leader of the Opposition should go back and read Hansard from yesterday

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when she was trying to tell us that everyone's trying to rush their purchases because of the harmonized sales tax.

Consumer confidence comes when people have jobs, when people can support their families, and that's exactly what the leading economists tell us will happen as a direct result of the harmonized sales tax.

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

GOVERNMENT INFORMATION ON

HARMONIZED SALES TAX

C. James: First, the B.C. Liberals hit British Columbians with a brand-new tax just weeks after they told the public that they weren't going to bring it in. Since then they've repeatedly refused to provide information on how it's going to impact businesses and consumers.

The Ontario government actually posted an eight-page list on their website that described what's going to cost more in their province. But instead of being upfront with British Columbians, all this minister does is point fingers and accuse people of fearmongering. My question is to the minister. Will he follow Ontario's example?

Interjections.

Mr. Speaker: Members.

C. James: Will he post on the government website details of how the HST will cost British Columbians more?

Hon. C. Hansen: I have said that there are some people in this province that are fearmongering around the harmonized sales tax, and I say to the Leader of the Opposition: if the shoe fits, wear it.

What is obvious to all of us on this side of the House is that the NDP opposition would actually like to see the 7 percent PST imposed on top of the 7 percent harmonized sales tax. What the NDP have made quite clear is that they are opposed….

Interjections.

Mr. Speaker: Sit down for a second.

Continue, Minister.

Hon. C. Hansen: What is clear is that the NDP opposition is opposed to the elimination of the provincial sales tax. They're opposed to the exemption of the 7 percent harmonized sales tax on books, on children's clothing and footwear, on children's diapers, children's car seats and booster seats, on motor fuels. They're opposed to the idea that we should be exempting homeowners from the 7 percent cost of home energy. That, in fact, is what they are proposing in their opposition to Bill 9.

B. Ralston: A recent poll said that the number of British Columbians who strongly support the HST was 3 percent. With answers like that, it's likely to fall down to 1 percent or even zero.

The government of Ontario brought in the HST, and they accepted their responsibility to inform their public in a clear and detailed manner. The document on the website is straightforward, and it's entitled "What's Taxable Under the HST and What's Not?" Just that simple.

The B.C. Liberals brought in a tax that they said before the election they would not do. Why do the B.C. Liberals continue to refuse to explain this tax in a transparent way to the public in British Columbia?

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Hon. C. Hansen: We have set out very clearly on the website what is exempt, which is…. Basically, everything that's currently exempt from GST will be exempt from the 7 percent additional harmonized sales tax. There is also a series of other exemptions that we've set out, so it is pretty clear for anyone that wants to read that section.

I do want to come back to a reference to the Conference Board of Canada. This is actually a quote from a report they put out called Harmonize Consumption Taxes to Improve Economic Efficiency . It says: "Ontario, B.C., Saskatchewan, Manitoba and P.E.I. should follow the lead of the three Atlantic provinces and Quebec by harmonizing their retail tax regimes with the federal GST to create a single value-added consumption tax system in provinces that have a consumption tax."

This is the key sentence: "Creation of a harmonized consumption tax would reduce business costs and provide a welcome and necessary boost to Canadian productivity growth."

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

B. Ralston: Well, instead of putting a straightforward document on the government website at very little cost, this minister has announced his intention to send out a flyer, at an unspecified cost, across the province, likely to the tune of millions of dollars, to be paid for by taxpayers.

Why won't the minister just commit today to put on the government website a document very similar to that put out by the government in Ontario — what's taxable under the HST and what's not — and help the public

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to understand and get the information they deserve to know?

Hon. C. Hansen: It's very clear from our website and the links to the Canada Revenue Agency website, which actually gives further information, because as the member knows, this is in fact a federal tax that will be charged, with a provincial portion of it. It'll be administered by the Canada Revenue Agency, and much of the information regarding how it will be administered is in fact found on the Canada Revenue Agency website.

I put the challenge back to that member. In their own NDP website they have a link there to link to some of the most blatant misinformation about the HST that's on Bill Vander Zalm's website. That is what we talk about when we talk about spreading misinformation.

D. Donaldson: Well, the minister can spin it any way he wants. Over 80 percent of the people in this province don't want the tax, and they don't want the HST implemented. That's the fact.

Here's what Bruce Cran, president of the Consumers Association of Canada, said yesterday on the HST: "The sad part of it is that we've got no information of any value at all to speak of from the provincial government to allow us to know what is going to be taxed that wasn't before." That's what the experts are saying. It couldn't be more clear.

My question is to the Minister of Finance. Will he agree to follow Ontario's example, and will he put up a list on the government website on what is going to be taxed that was not taxed before?

Hon. C. Hansen: The information on the website is very clear in terms of the fact that everything that is currently exempt from GST, everything without exception, will be exempt from the HST. It also lists all of the other additional goods and services that are exempt from the 7 percent provincial portion of the harmonized sales tax.

When we talk about the impact on consumers, let's actually look at what's happening in that member's riding. When you look at the mining sector in British Columbia, that is a key part of the economy of his constituency. The harmonized sales tax will benefit the mining sector. It's going to mean more men and women are going to have jobs in the mining sector.

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That is why the Mining Association of British Columbia is in favour of it. The Association for Mineral Exploration B.C. is in favour of it. The HST is going to mean jobs not just for British Columbians generally but for British Columbians in his constituency.

Mr. Speaker: The member has a supplemental.

IMPACT OF HARMONIZED SALES TAX

ON ECONOMY

D. Donaldson: Well, I'll tell you who is not for the HST. Former Finance Minister Carole Taylor says it'll be bad for consumers. This tax is going to hurt B.C.'s economy precisely when it's struggling to recover.

Here's what Mr. Cran also said: "Believe me, the purchases in the United States will be rising once it's very visible that this 12 percent is hanging there on everything that we buy here. This HST will damage the B.C. economy at a time when we're seeing the sharpest fall in consumer confidence of any region in Canada."

My question is to the Premier. Why won't he listen to the people on the HST and just go ahead and scrap it altogether?

Hon. C. Hansen: I think that's exactly the kind of misinformation that people are spreading around the province, which is instilling fear on the part of British Columbians. Everything is not going to be more expensive because of the HST. The vast majority of goods and services in British Columbia will either be the same or will be less expensive after the HST is implemented.

Interjections.

Mr. Speaker: Continue, Minister.

Hon. C. Hansen: We also know that for the small business community in British Columbia, it's going to take literally millions and millions of dollars of compliance costs out of their bottom line.

That's why the member for Juan de Fuca said in 2006…. He's quoted in Hansard as saying: "I know my spouse is a small business person, and she has to deal with both sets of bureaucrats. That's the motivation for her for harmonization." That's why many, most, small business people in British Columbia support this initiative.

Interjections.

Mr. Speaker: Members.

Members, take heed of some of the comments that have been made. This is a place where we're supposed to listen to the questions and listen to the answer with some respect. Some of the comments that have been thrown back and forth here are disgraceful. If we want to continue with question period, I would expect that we abide by some of the House rules.

IMPACT OF HARMONIZED SALES TAX

ON REAL ESTATE COSTS

S. Simpson: The B.C. Real Estate Association has been speaking out about their concerns regarding af-

[ Page 4974 ]

fordable home ownership in B.C. They cite the RBC Financial Group survey that shows that in B.C. more than 60 percent of a household's pretax income is required to cover home ownership costs on a detached bungalow. In Vancouver that's 70 percent. Normally, 30 percent is considered affordable. In Vancouver an average-priced new detached house costs over $900,000. This means an additional $35,000 in HST after the rebate.

How can the minister justify hitting many British Columbia homebuyers with these kinds of additional costs when we already have the highest housing prices in Canada?

[1420]

Hon. C. Hansen: The Real Estate Association was very complimentary to the government for two measures. One was the increase in the threshold for the new home rebate, which totally offsets the cost of HST. The other was the property deferral program that we put in place for families with children.

But what the real estate board points out is, in fact, that with the thresholds that we have in place now…. The $525,000 threshold actually accounts for 75 percent of all new homes in British Columbia. I can tell the member that for homes valued up to $550,000, the price of those new homes actually comes down, according to the real estate association's own numbers.

Mr. Speaker: The member has a supplemental.

S. Simpson: What the RBC says, when talking about the British Columbia market, is: "Such poor affordability levels represent an element of risk that could weigh heavily on markets when interest rates start rising." Yet this minister is perfectly comfortable to charge 35,000 additional dollars on the price of an average detached home in Vancouver. That's the reality — $35,000 out of the pocket of a consumer.

HST-related increases aren't exclusive to new purchases. John Tillie, the president of the B.C. Real Estate Association, said to the media: "Someone who buys a $450,000 resale house on June 30 pays about $16,500 in closing costs such as appraisals, home inspections, survey certificates and realtor fees. With the introduction of the HST, that same person would pay over $1,100 more due to the tax."

Why does the minister think it's a good thing to add over a thousand dollars to the bill of somebody who's processing their paperwork and doing due diligence to try to buy a modestly priced home in British Columbia?

Hon. C. Hansen: The member is wrong when he does his arithmetic. If he's talking about an average-priced home in Vancouver….

Interjections.

Mr. Speaker: Just take your seat.

Continue, Minister.

Hon. C. Hansen: First of all, the member should know that the vast majority of new homes in Vancouver, Metro Vancouver and the province are less than the $525,000 threshold.

I know the member was talking about a single-family detached home, but the member's arithmetic is wrong, because the incremental cost is nowhere near $36,000. If he would like to actually do that calculation, he could go on the website, where there's a great little value-of-a-new-home HST calculator that will help him with his arithmetic.

The other thing that's important to point out is that the HST does not apply to the cost of the resale of existing homes. It only applies to new homes, and as a result of the way the HST works, the cost of homes valued up to $550,000 will, in fact, come down.

IMPACT OF HARMONIZED SALES TAX

ON SUMMER CAMP FEES

N. Simons: Summer camps, art camps, sport camps, camps all across the province provide so much to kids and their families, and they're being told now that the HST is going to impact affordability of camp fees. Not only that; they're being told that they'd better pay by April 30 if they want to avoid that. Is that fair, Mr. Speaker? Is it fair to be telling families of this province, already struggling, that they're going to have to pay more for camp fees for kids?

[1425]

Hon. C. Hansen: That's exactly why we brought in the income tax changes. It means that for every B.C. family that pays provincial income tax, they're going to wind up with more money in their pocket to offset some of those things. For lower-income families, that's exactly why we brought in an HST tax credit that 1.1 million British Columbians will benefit from.

We want to make sure that the interests of low- and modest-income families are protected in British Columbia, and that's exactly what this does. Just to quote Jon Kesselman in his

article last week, he says: "The existing PST imposes a heavier burden on the poor and the near-poor than the impending HST with its companion refundable tax credits."

We on this side of the House want to pass a piece of legislation that's going to eliminate that existing PST, which is a bigger burden on low- and near-poor-income families in British Columbia. I suggest that the opposition get on with the program of getting rid of the provincial sales tax.

[ Page 4975 ]

Mr. Speaker: The member has a supplemental.

N. Simons: You know, 90 percent of the province doesn't believe what the minister is saying. In the Sunshine Coast alone we've got Camp Byng; Camp Artaban on Gambier Island; Camp Olave; Camp Kakhamela, which is for kids with diabetes; YMCA Camp Elphinstone; Salvation Army Camp Sunrise; Keats Camp; Barnabas Camp; Camp Fircom; music camps; sports camps; sailing camps; camps for families on low income.

They are the ones who are extremely concerned about the rising costs being imposed on them in this province. How can this minister justify this increase in the cost of living with the HST to the kids and to the families who go to these camps?

Hon. C. Hansen: This is coming from a member of the opposition who has said that he doesn't want to see Bill 9 pass. Well, Bill 9 actually helps protect those very families that he's trying to pretend he's championing.

Bill 9 actually ensures that those families will not be paying the additional 7 percent on books for those children. It ensures they will not be paying the additional 7 percent on the children's clothing and footwear, on the car seats and booster seats. Bill 9 ensures that B.C. families will not be paying the 7 percent HST on their home heating costs or for the gasoline that they have to put in the car in order to get their kids up to the summer camps.

TREATMENT OF TEACHER

BY LITTLE FLOWER ACADEMY

R. Austin: This week Vancouver's Little Flower Academy fired a teacher because she is a lesbian parent. Little Flower Academy is a publicly funded school. Could the minister please advise this House what she is doing about this disturbing situation?

Hon. M. MacDiarmid: I thank the member for the question, and I take it on notice.

IMPACT OF HARMONIZED SALES tax

ON SUMMER CAMP FEES

G. Coons: I just want to go back to the summer camps. Summer camps of all varieties are warning families to beat the impact of the HST — for example, the Green Bay Bible school situated just outside of Kelowna. I quote directly from their website. The headline is: "Beat the HST. Any Camp Fee Paid on or After May 1, 2010, Will Be Taxed at 12 Percent." It then encourages families to register their children for camp prior to Friday to beat the HST.

To the Minister of Finance: why is he making families struggle two months earlier than July 1, the official implementation date of this government's dreaded HST?

[1430]

Hon. C. Hansen: We have acknowledged that there is a small percentage of goods and services that are going to cost a little bit more after July 1. That is exactly why we put in place HST tax credits and why we put in income tax reductions — to make sure that for the majority of low- and middle-income families that will totally offset any of those incremental costs.

Mr. Speaker: The member has a supplemental.

G. Coons: The minister is totally wrong, and British Columbians don't believe a word he's saying.

Families from all over the province are being told by camp organizers to beat the HST by paying full camp costs before Friday. The organizers of the Ness Lake Bible Camp just north of Prince George are also openly encouraging parents to pay now to beat the HST. I quote from their information materials: "HST will apply to all camp fees unless the full balance is paid by April 30. Pay early, and beat the HST."

Minister, not all families are able to pay more than the deposit for summer camp. They will either be penalized with a higher bill or not be able to send their child to camp at all because of this government's HST.

Why is this minister so determined to force families into these kinds of impossible choices?

Hon. C. Hansen: You know, when you talk about supporting families in that member's constituency, that is why the coast forest industry has totally supported the harmonized sales tax, because it's going to mean that more of his constituents are going to be able to go back to work.

Interjections.

Mr. Speaker: Sit down.

Members.

Continue, Minister.

Hon. C. Hansen: When you look at the importance of the transportation sector to the member's riding and the ability to have secure jobs for his constituents in his communities, the HST accomplishes it. That's why the major job creators in British Columbia support it.

I know how important the trucking sector is to the north and to his constituency, and this takes costs out of the trucking industry. It allows their costs to come down. The consumers in this member's constituency are going to benefit. That's exactly why the Trucking Association of British Columbia is 100 percent supportive of the harmonized sales tax.

[End of question period.]

[ Page 4976 ]

Speaker's Statement

STANDING DIVISIONS ON BILL 9

Mr. Speaker: Hon. Members, during the committee stage debate of Bill 9 it's my understanding that an agreement has been reached which will permit standing divisions on sections of the bill should they be requested. In addition, the provisions of practice recommendation No. 1 will be available to members.

At 5 p.m. on Thursday all remaining sections of the bill will be put to the committee in one block vote which itself will be subject to one standing division. After the committee reports to the House, the question of third reading will likewise be subject to a standing division.

M. Mungall: I rise to present a petition.

Mr. Speaker: Proceed.

Petitions

M. Mungall: I have a petition here with 5,500 signatures from the good citizens of Vernon-Monashee asking their MLA and all members of the House to vote against the HST.

Orders of the Day

Hon. M. de Jong: In Committee A, I call Committee of Supply — for the information of members, the estimates of the Ministry of Children and Family Development — and, in this chamber, committee stage debate on Bill 9.

[1435]

Committee of the Whole House

BIll 9 — Consumption Tax Rebate

and Transition Act

The House in Committee of the Whole (Section

B) on Bill 9; L. Reid in the chair.

The committee met at 2:38 p.m.

section 1.

B. Ralston: Yes, on

section

Section 1 in

part 1 refers to what's called "Definitions."

Definitions are a very typical part of any statute. When one comes to interpret a statute, that's often the first place that someone, a reader of the statute, looks to understand what terms are being defined and how they're defined in order to get a sense of the statute.

Often in legal

interpretation, in the courts, courts go back to those

definitions. Statutory

interpretation, particularly in a tax statute where there is a financial burden that may or may not be borne depending on the

interpretation of the statute….

Interpretation and judicial

interpretation of those kinds of statutes becomes important.

Probably the leading authority on the

interpretation of statutes in Canada is a book called Sullivan and Driedger on the Construction of Statutes , and on page 3, there the learned authors talk about the modern principles of statutory

interpretation. An interpreter who wants to determine what a provision applies to, particular facts, must address the following questions.

[1440]

"What is the meaning of the legislative text?

"What did the Legislature intend? That is, when the text was enacted, what law did the Legislature intend to adopt? What purposes did it hope to achieve? What specific intentions, if any, did it have regarding facts such as these?

"What are the consequences of adopting a proposed

interpretation? Are they consistent with the norms that the Legislature is presumed to respect?"

Just by way of a preface to a question I intend to pose, but under the rules, I do have some time to make some preliminary remarks.

Statutory

interpretation — and these are the principles that guide courts — is a very important role that is played, and what we do here, both in the wording of the statute and in the responses to questions, can be used by a court to help interpret the meaning of a statute.

In the same text that I've referred to, in appendix 1 they have what are called drafting conventions of the Uniform Law Conference of Canada. These were first established in 1919, but they've been continually updated and are in this latest edition. They have some general provisions, such as, "The organization of

an act should be logical" — which would seem axiomatic but doesn't always appear to be the case.

part 3 in this model statute they talk about arrangement, and they refer to

definitions. I'm going to read from paragraph 8, under

part III, "Arrangement." "Definitions should be set out in the first part of the section, unless they apply only to a particular act,

section or group of sections. In that case, they should be placed at the beginning of the passage in question." So it's fairly clear.

This is the authoritative text referred to by the Supreme Court of Canada and in courts across the country. That's the model statute.

Definitions should be at the beginning of the statute unless they refer to a specific section. Can the minister explain why, in

section 1, there is a series of

definitions and then, on page 76, in

section 205, there's what is called an amendment to this act, an amendment to

section 1? So within the same bill, there are

section 1

definitions, and then, at

section 205, there are purported amendments to the very bill we're discussing.

Leaving aside the question of whether that's in order, because that section, 205, is strictly not before us at the

[ Page 4977 ]

moment, can the minister explain why, in defiance of ordinary drafting conventions — the suggestion that a statute be logical — this statute, if it's passed, will have

definitions in

section 1 and in

section 205?

Not only is there a series of

definitions; they're all fairly important

definitions in

section 205. There are other purported amendments that follow at the end of this bill. It would seem that the drafting process here….

The minister is responsible in our system, can't pass that responsibility off to staff. The minister is here before the Legislature to ask those questions of. Can the minister explain why there are

definitions in

section 1 and why there are

definitions in

section 205? And how can this hodgepodge, this illogical construction, this jumble, be helpful to any person who chooses to read the statute?

Hon. C. Hansen: I have been advised that the

section 1

definitions actually come into force on May 1, which is required as part of the transition periods that will be triggered on that date. The other

definitions take effect — so they come into force — on July 1. By grouping them this way, it actually makes it easier for the reader to follow, depending on at what point in time they are reviewing the legislation.

[1445]

B. Ralston: Perhaps the minister could explain, then, why it wasn't simply in the statute with an annotation. There are notes in the appendix as to when those provisions come into force. Why wasn't it simply put into the act at the front end? Since there are basically two dates, July 1 and May 1, and two groups of amendments, why weren't they grouped in that way at the front of the statute?

That would seem to me to be a fairly logical way to proceed. Mr. Driedger says that statutes should be logical, rather than putting some at the beginning and some at the end and, I would suggest, confusing most readers of the statute.

Hon. C. Hansen: I am advised that after July 1 these two definition sections get consolidated. To do as the member had suggested would wind up with what is not normally expected in a definition section. Normally in a definition

section you anticipate that the

definitions will all be alphabetical. So this way it allows us to set out alphabetically those

definitions that are in force as of May 1.

Subsequent to July 1, when the other

section comes into force, it actually allows for this to become consolidated with

section 1, and they would all then be able to be presented alphabetically, which is what most readers of legislation would anticipate.

B. Ralston: The minister said in his previous answer that

definitions that were included in the later portion didn't come into effect until July 1. I note that just the first definition is a definition of a boat, so is the minister saying that the definition of a boat is going to change between May 1 and July 1?

Hon. C. Hansen: I appreciate the member's question, but that does very specifically pertain to

section 205, and I think that would be the appropriate time to deal with it.

B. Ralston: I suppose technically the minister is right, and I have to accept his answer, but the difficulty is that in this debate we're operating under a set of rules put forward and passed by the Legislature, by the government majority, that this debate will conclude at five o'clock tomorrow. So if we by chance don't get through all these sections, all the way to 205, by five o'clock tomorrow, that question is something that the minister won't be required to answer.

Given that he's already said it, given that answer just moments ago, I think it's unfair to the public, and I think it's a little bit unfortunate, that the minister is choosing to adopt this very narrow tactic to avoid answering a question. The broad question is…. It comes from the very answer that he gave. That's the question that I'm asking, based on what he said one answer ago.

He said that those

definitions…. I think the question I'm asking is quite legitimate. Are those

definitions changing between May 1 and July 1?

Perhaps I could tackle it this way, then. Can the minister explain what the definition of boat will be as of May 1?

Hon. C. Hansen: That is not covered in

section 1. It is not relevant to

section 1. But I can assure the member that I realize time is limited. This bill has been before the House as the only order of the day from April 1 to today, and there has been a lot of time spent on this bill.

It is the government that actually has suggested we get this into committee, which is why the vote was taken last night. I will endeavour to try to give my answers as succinctly and as quickly as possible so that we can get through, hopefully, all of this legislation, including

section 205.

[1450]

B. Ralston: Again, in the

section that the minister won't answer questions about, even though he referred to it earlier, there are

definitions of such important things as "fair market value," "purchase price," "purchaser," "sale," "taxable value," "use" and "vehicle." Perhaps the minister could just answer this question, then: what definition of those terms will be in effect on May 1 in relation to this legislation?

Hon. C. Hansen: None of those terms are needed for the provisions of this legislation between now and July 1.

[ Page 4978 ]

B. Ralston: Under this

section 1, the

definitions section, the term is referred to as a "director." The director has a number of powers, particularly in later sections under administration, including inspection and audit powers, assessment, penalties, notice of assessment, irregularities.

Perhaps the minister can then explain how this official's duties intersect with those of the Canada Revenue Agency. It would seem that although this person is defined in the act here, some of the powers seem to broadly relate to an ability to assess tax owing. I think the impression has been created, certainly by government members and by the minister himself, that most, if not all, of this administration is being transferred to Canada Revenue Agency. Those officials will become federal public servants, and all that work will be done under the auspices of the federal government.

Can the minister explain what duties the director who is set out in the

definitions section,

section 1 — what her or his duties will be?

Hon. C. Hansen: This definition is put into the

definitions

section so that it can provide guidance to the provisions that are set out in

part 4 and

part 11 of the act. When we get there, we can certainly get into all of the details in terms of the functions and jobs that the director has responsibility for. This simply sets out the definition for it.

B. Ralston: Well, that's a very sparse answer. I thought the minister would really want to take this opportunity. He says there's a lot of misinformation out there. He repeats that constantly. He has the opportunity here in the House to answer questions fully. This is a person who he will appoint to administer the act, yet he's refusing to give any definition or any sense of what the duties of that person are.

I've referred to administration. He has said publicly that the administration of the HST will be conducted by former provincial public servants who will be transferred over to the Canada Revenue Agency, and all those duties will devolve over to that agency. Here's an opportunity for the minister to give some public information, give some facts, set the record straight, yet he seems to be not wanting to answer the question. So I'm a bit mystified by the minister's approach.

I mean, I understand that the minister is anxious to ram this legislation through, but I don't think refusing to answer questions at this stage will necessarily help him in his quest to elucidate people like Carole Taylor and all those other people who have been bamboozled and misunderstand the legislation.

Hon. C. Hansen: I'm not in any way reluctant to answer the member's questions. All that I ask of the member is that he respect the procedures in this House and that he put his questions at the appropriate place in the discussion.

[1455]

The appropriate place to talk about the role and the function and the activities of the director is under

part 4 and later under

part 11. This is simply the

definitions section.

D. Donaldson: I have some questions related to the

definitions section. It's important to be specific about these

definitions, because they do have an impact, as the minister says, later in the bill. So we need to be clear, and I'm going to ask some specific questions about

definitions, because they will relate to how we interpret the remaining sections of the bill.

Under "energy product" electricity is listed. Could the minister answer whether this is electricity from any source?

Hon. C. Hansen: Yes.

D. Donaldson: Would that include a source such as with people who've now installed solar panels, for instance, or other means to not only feed electricity into their own home but reverse into the grid? Would that be an example of electricity under this definition?

Hon. C. Hansen: An energy product is a product that a consumer purchases. Therefore, if they are developing their own electricity, it would not be captured by this particular definition.

D. Donaldson: Thank you for that clarification. I'm going to ask a number of clarifications on the definition of wood under

section 1(h): "wood, when used as a source of energy."

For some members, this might be curious as to why I'm so interested in the definition of wood. In the area that I come from, in remote rural areas and, I would say, in other areas of the province that aren't as urbanized as where we are here in Victoria or in other areas, wood is an important source of heat for people, and usually a relatively inexpensive source of heat. That's a form of energy, of course.

It reminds me of the definition of wood being able to heat three times: once when you get it, once when you split it and once when you burn it. A friend of mine used to tell me that. I can attest to that, because going out and getting wood is not the easiest thing, although it's good in lots of other ways, because it keeps you fit as well.

Going back to the definition of wood, others in my area and others in the province I know have ended up purchasing, for instance, whole logs. I just had a load of whole logs delivered — a short truck, they call them. It ends up to be about ten or 12 cords when you buck it up. But I just had

[ Page 4979 ]

that delivered. Would whole logs be a definition of wood under 1(h)?

Hon. C. Hansen: If the member is purchasing the wood to burn as a source of home energy, then yes, it would definitely be defined as wood.

D. Donaldson: Thank you for that answer, and thank you for your indulgence on all these

definitions that I'm going to ask you. It does, as I say, relate to when we get further into the sections of the bill about how these

definitions would relate, to elucidate on further sections of the bill. That was a description on whole logs.

I'm not saying I've gotten lazier, but I have in the past also purchased split wood. Again, I purchased it. Is that a definition of wood when used as a source of energy? It's already split and delivered to my house.

Hon. C. Hansen: Yes.

[1500]

D. Donaldson: For wood-burning stoves that have catalytic converters, it's not recommended to burn wood scraps from construction, for instance. They can gum up the catalytic converter and then impair its efficiency in reducing greenhouse gas emissions and other emissions. But some people do, and some people have scraps of wood from construction lying around the yard — wood that, under this bill, they will have paid the HST on. Wood scraps — is that wood under the definition in this section?

Hon. C. Hansen: If they've specifically purchased wood scraps or any other wood product for the purpose of using it as a source of energy in their residence, then it would meet the definition of wood in this section.

D. Donaldson: Well, they purchased it for construction. Then it was left over from construction, and now they're going to use it as a source of energy. So would that be, under the definition of

section 1(h), "wood, when used as a source of energy"?

Hon. C. Hansen: No, only if it was purchased for the purpose of an energy source.

D. Donaldson: Again, I thank you for taking time to explain these

definitions, because I think it will be important when we discuss sections further on.

In my area there's often…. Some of the few mills that are left are small sawmills where they run logs through, but there's trim. There's actually trim off these logs. It's mostly bark. There are not a lot of Btu's in it. There's some wood on it as well, and people use it as an energy source. They purchase it, but the original intent was not…. It was not produced for fuel. Would that qualify, this trim, as wood under this definition?

Hon. C. Hansen: Yes. As I said, if it's purchased as a source of energy, for residential energy, it qualifies under this definition of wood.

D. Donaldson: Okay. I'll just ask one other definition under this particular 1(

h) about wood. Again, thank you for your indulgence on this, because as I said, up where I live, it's important to know how the government, under Bill 9, is going to define wood. It has implications further on when we talk about energy.

In some of the sawmills there are ends. We call them cants, but they're not really cants because cants actually can be used for various purposes. They used to be used, for instance, for railway ties and things like that, or they can be used by other mills that are adding value by turning these cants into end products.

Sometimes the ends of these cants are left over. They could be 12-by-12s or 8-by-8s. Often I see my neighbours driving by with truckloads of them. The intent for those they've purchased…. Some of them they'll use for energy, for heat, but others they might use for landscaping or around the yard. Would these ends of cants be an example of wood when used as a source of energy — 1(h)?

Hon. C. Hansen: Again, if it is a wood product or wood scraps that are purchased specifically to be used as a source of residential energy, then it would qualify.

Hon. R. Hawes: I seek leave to make an introduction.

Leave granted.

Introductions by Members

Hon. R. Hawes: In the galleries today we have 28 grade 10 students from the Dasmesh School in Matsqui village. They're here along with the vice-principal, Mr. Dhaliwal; their teacher Mrs. Burton; and a number of parents. They're a great school and a really interesting group of kids. Probably a bunch of them are going to be in here at some stage, sitting down here. Could the House please make them all welcome.

Debate Continued

D. Donaldson: Yes, well, I think the minister's given a number of specific answers, and I thank him for that, because it'll make a difference later on.

I would like to move on to the definition in 1(i), "pelletized fuel." We talk about pellets up in the north, but pelletized fuel is what is listed in the bill. This is referenced "as defined in the Solid Fuel Burning Domestic

[ Page 4980 ]

Appliance Regulation, when used as a source of energy."

[1505]

I've had a read of the solid fuel burning domestic appliance regulation that's referenced as to how to define pelletized fuel. The definition there — and I read from the regulation: "…means processed fuel consisting of uniform, discrete pellets of compressed, dried biomass material."

That seems clear enough. There's a schedule,

section 5, "Residential Pellet Fuel Specification." The characteristics listed are numerous, but one of them is dimensions. The specification is a diameter of six to eight millimetres and a length of no longer than four centimetres. Obviously, we're talking about fairly small pellets here for residential use.

I was at the Smithers trade show a couple of weeks ago. They hold it every year, and one of the trade show exhibitors outside in the beautiful sunshine this year was a new startup company. One of the owners is from my constituency, and the other is from the member for Nechako Lakes' constituency. They've created this new product, and I'm sure the member for Nechako Lakes can fill you in on it.

It's an amazing product. They're creating it out of their plant in Houston. It's a compressed log. It's a log made of the same type of material that is used to make the fuel pellets that are described in the regulation. It's a log with dimensions that are uniform and is made under great pressure. It's got a great number of Btu's in it, but it's larger than the specifications under the solid fuel burning domestic appliance regulation. It's probably 18 inches long and maybe six inches in diameter. So would that be considered under this definition as pelletized fuel?

Hon. C. Hansen: The reference to the solid fuel burning domestic appliance regulation, actually, is to allow for a regulatory framework whereby what constitutes a pelletized fuel could be changed over time through an order-in-council or whatever the appropriate process is for changing the regulation.

That would allow the kind of flexibility for not just, as the member was referring to, a different type of pellet but indeed other types of biofuel. For example, there are pelletization processes for things like switchgrass and other biofuels that…. It would be intended for them to be qualified under this particular definition.

D. Donaldson: So as it stands right now — and this is important for when we have further discussions later on in the bill — the log I described, which is basically for home-heating use, home energy use, would not fall under this definition of pelletized fuel unless the regulations are changed. Is that correct?

Hon. C. Hansen: The intention here is to make sure that when we talk about pelletized fuel, we're not just talking about wood but we're talking about other products, as well, that could be constituted under pelletized fuel. By referencing the regulation, it actually gives us that flexibility to recognize other products that may come on the market in the future.

D. Donaldson: Thank you for that answer.

[1510]

This innovative company…. Again, I said it was a local company. One of the owners lives in my constituency, and one in Nechako Lakes. I hope they're very successful with their product.

They also produce — the best description I can give — hockey puck–sized pellets. You know, primarily they're hoping that this will be used for energy generation and likely not home energy generation. The hockey puck–sized pelletized fuel could be suitable, as well, for people to heat their homes in wood-burning appliances. Would the hockey puck–sized fuel fall under this definition of 1(i) "pelletized fuel"?

Hon. C. Hansen: Well, if it didn't qualify today under that regulation, it could certainly be put forward for consideration for an amendment to the regulation. It's possible that it may be covered currently under that reg, but if not, at least the flexibility is there that we could make that change in the future.

I think it is important to recognize that this wood product is for residential. I think, as the member recognized, that not all of these pellets are appropriate for residential heating, but we're also in a time when new people are developing new products and new innovations.

B. Ralston: The minister said, when responding to a question about construction scraps, that if the intention of the purchaser was to use that for home heating, the HST would be owed on that purchase. Can the minister advise whose responsibility it would be in those circumstances to discern the intention and to collect the HST — the purchaser or the vendor?

Hon. C. Hansen: That is covered under the provisions in

part 4, and that would be the appropriate time for us to discuss that.

B. Ralston: Well, I can see this is going to be a recurring theme in how the minister chooses to answer questions. To give an example and then refuse to follow up until much later in the bill…. Frankly, I don't think that's a very effective way to proceed. I'm going to take it…. The public can judge for themselves.

The minister's made many, many statements about wanting to get clear information out to the public. Here's a very clear example of someone buying construction scraps and who's going to pay the HST, and the minister won't answer the question.

[ Page 4981 ]

If he wants to engage in a narrow

interpretation of the rules, I suppose that's his right. If the Chair sustains that, then that's how we'll have to proceed, but certainly, it's open to him, based on my experience, to adopt a slightly more flexible

interpretation of the rules and answer those kinds of questions.

As the minister knows…. And perhaps no studies have been conducted, because it doesn't appear that much in the way of study of the HST was conducted in putting forward this legislation. But certainly the experience of the GST and studies of that in articles such as the Canadian Tax Journal and others have shown that when the GST was introduced, the underground economy — that is, those vendors and purchasers who sought to avoid payment of the tax — dramatically increased.

There are some ways of estimating that by economists, basically estimating the amount of cash on hand in certain accounts across the country. A notable paper by Peter Spiro in the Canadian Tax Journal in 1993, entitled "Evidence of a Post-GST Increase in the Underground Economy," speaks about that.

It's well recognized that when a value-added tax comes in…. This is the experience, and the minister knows how broad that experience is, because he refers to it very often. The experience of tax evasion becomes very broad.

I'm wondering: at what point will the minister be prepared in this discussion of this bill, if ever, to answer questions about the degree to which he anticipates, based on studies of the GST and studies…? It's unlikely that his ministry has done any, based on the track record, but if they have done any, when might those studies be disclosed about the likely impact of imposing this tax on tax evasion?

[1515]

Certainly, the experience in the GST, analyzing the gross and cash balances held by the public as an indicator of transaction volumes shows that there was a substantial increase in the underground economy since the introduction of the GST back in 1993.

Given that in some sectors where there is relatively unregulated commerce, in the sense that there are relatively few audits, the increase and experience with the GST was an increase in transactions where the tax wasn't paid. At what point in these proceedings will the minister be willing to answer questions about an estimate and an increase in the underground economy and lost tax revenue as a result of the imposition of the HST?

Hon. C. Hansen: It certainly doesn't pertain to the definition section. I appreciate the fact that there are probably thousands and thousands of questions that the Finance critic may have, but we need to follow the rules of the House in terms of questions that are relevant to the

section that's before us, and that's now

section 1, which is the definition section.

The impacts of value-added taxes on the underground economy are actually something that I do like to talk about. There is not in this bill, to the best of my knowledge, a

section that pertains directly to that, but I'd be pleased to have that discussion with the member — if not during a relevant section, if we can find one, then certainly during Finance estimates discussions.

B. Ralston: Well, I would suggest, based on that answer, that we're not going to have the discussion here in this House before this bill comes to a vote at five o'clock tomorrow, and that's regrettable. I think it's an important aspect of this bill, an important policy consideration. It deserves public discussion, but a very narrow and technical

interpretation of the rules, I suppose, enables the minister not to answer that question.

In the definition

section there's a reference to a "sales tax agreement." I'm assuming that that is the agreement that the minister and the Premier signed with Mr. Flaherty and the federal government, although it doesn't adopt the formal name of the agreement that was signed. Is that the case?

Hon. C. Hansen: Yes.

B. Ralston: The definition refers to amendments — "as amended from time to time." Can the minister advise in the present agreement — aside from the agreement to forestall accepting the $750 million in the fiscal year just ended on March 31, 2010, and deferring some of that money into this fiscal year — if there have been any other amendments to the agreement between the federal government and British Columbia that was announced on July 23 last year?

Hon. C. Hansen: I just would remind the member that this is talking about a definition of three words, "sales tax agreement," which actually, as I indicated, includes the CITCA and includes the one amendment that has happened to date. This is simply to set out a defining of those three words.

Interjection.

B. Ralston: The Minister of Health seems very anxious to get on with this section. Well, the Minister of Health is always very loose with

definitions, so I can understand why he's not interested.

The definition of "supply" says that it has the same meaning as it does in

part 9 of the goods and services act, the federal act. That definition is found…. If I could briefly read it: "'supply' means, subject to sections 133 and 134, the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or a disposition."

[ Page 4982 ]

The rules of

interpretation of federal statutes also provide that the French version of the statute has equal weight in the courts. Will the minister confirm that the definition of "supply" in this act…? People will be able to refer to the French version of the federal statute as an aid to interpreting what supply might mean?

[1520]

Hon. C. Hansen: I have a hunch that the member actually probably knows the answer to that question better than I do, given that he has the legal training. I don't know specifically how the French versions of federal statutes are used in courts in British Columbia. I could undertake to get that information for him, but I would actually defer to his experience and his training as a lawyer.

B. Ralston: Well, as complimentary as that answer might be, I don't think it's really satisfactory. The minister is, of course, the minister. This is a definition in the statute that he's putting forward, and I think he should have that answer.

Are his officials not able to advise him as to elementary

interpretation of a statute? It specifically adopts the definition in a federal act. That's the choice the minister has made in putting this act forward. Surely he can answer a basic question about how that definition might be interpreted by the courts.

Hon. C. Hansen: This is to ensure that the term "supply" is a definition. It's actually a definition required for the point-of-sale rebates administered by the Canada Revenue Agency and the residential energy program. What its intent is, is to ensure that both are coordinated with the harmonized sales tax and to ensure that the same definition of "supply" applies in the provincial statutes as would apply in the federal statutes.

B. Ralston: Well, just to persist on that question, I think that's accepted and fairly straightforward. The wording is: "'supply' has the same meaning as in

Part IX [Goods and Services Tax] of the federal Act."

Can the minister not — based on the advice that he has there from learned counsel and advisers, and there are a number of them there — confirm that that's an accurate

interpretation of this section?

Hon. C. Hansen: I have very excellent advisers and very excellent advice that is given to me. The specifics of that question that the member has posed…. If he would like me to pursue it, I could pursue it with the Attorney General's ministry, but I'm sure that he probably knows as well as anybody whether that

interpretation that he just gave is accurate or not.

B. Ralston: Perhaps the minister mistakes the nature of my endeavour. This is an opportunity for the public to find out about this statute, to have some questions answered. It's not simply for my personal or private knowledge about the

interpretation of the statute.

I'd like the answer to be placed on the record, in the record of the proceedings and in Hansard , so that people, if they choose to know that or if courts come to look at this statute in a case at some point in the future….

As the minister might well expect, revenue statutes are litigated because there are often huge sums of money at stake. Those kind of

interpretations do come forward before the courts.

This is a very elementary question of construction, and so I'd like the minister to put that on the record. I gather he's not prepared to do that now. Will he give a commitment that before five o'clock tomorrow, when the guillotine comes down and all debate on this statute must cease, that he will place an answer on the record to that question?

Hon. C. Hansen: Yes.

B. Ralston: A similar question relating to taxable supply, also in the definition section. It also makes the same reference to "Part IX [Goods and Services Tax] of the federal Act." And by the federal act, in the definition section, I think it refers to the Excise Tax Act.

[1525]

A similar question relating to that. Perhaps the minister can just briefly explain now the difference between supply and taxable supply, and then give the same commitment on providing an answer about the use of the French version of the statute in relation to

interpretation of the term "taxable supply."

In the federal act "supply" means "subject to sections 133 and 134, the provision of property or a service in a manner including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition;" and "taxable supply" means "a supply that is made in the course of a commercial activity."

B. Ralston: I thank the minister for that answer.

Over the page on page 3 in

section 1 there's a definition of "consideration," and again, the same question

[ Page 4983 ]

Secondly, can the minister…? According to my review of the statute, "consideration includes any amount that is payable for supply by operation of law." Is that the definition that's being referred to here?

Hon. C. Hansen: The definition for "consideration" is the same in

part 6 of the federal act. This is the definition that would come into effect on May 1. I think, as we discussed earlier in these discussions, when we get to the definition

section that would be implemented for July 1, there is a slight amendment to that definition of "consideration."

S. Chandra Herbert: I've had some previous experience in working with the Vancouver park board around alternative energy means, specifically around the use of horse manure. I know some people have called the HST things related to horse manure, but I would speak more specifically about the definition relating to energy sources and specifically whether or not manure, compost, those kinds of things, would be covered under this

section in the

definitions.

Hon. C. Hansen: Only if it was pelletized and was included in the solid fuel burning domestic appliance regulation. But I'm not sure that many people would actually want to use that as a residential source of energy.

[1530]

S. Chandra Herbert: I asked because I know there's a demonstration project that they're looking at starting at the Hastings Park racetrack. They've got a lot of manure there, and they're trying to figure out if they can use that to power the track, in a sense. So I'm just wondering: is there any thought around ensuring that that kind of an opportunity would be covered in this section?

Hon. C. Hansen: In the case of an operation like Hastings Park, it's a commercial activity. Whatever GST they pay today, they actually get reimbursed as an input tax credit, and whatever HST they pay, they'd be able to get reimbursed as an input tax credit. That's why this

section here, under "energy product," applies specifically to the residential use of that product.

If, for example, horse manure was at some point developed into a product that would be used in residential energy, then certainly the flexibility is here for it to be considered.

S. Chandra Herbert: I know that in some cases, in other parts of the world, horse manure mixed with other kinds of…. It could be yard clippings. It could be those kinds of things. They have been used in anaerobic digesters or aerobic digesters to produce energy. In fact, I think that in some places that goes back as early as the late 1800s.

The question is…. If a community wanted to do something like that to power the homes in a small residential area, for example, this could be considered, as it's not pelletized but would be more of just a general amount of waste.

Hon. C. Hansen: Basically, in this definition

section there is

section (

j) that says: "other prescribed products in prescribed circumstances." But this section, in terms of an energy product, is to look at what is purchased by the homeowner for the generation of residential energy. If a product is consumed by, say, a municipally owned facility to generate heat which, in turn, would be used by homeowners, then it is the heat that the homeowner has purchased, and it would qualify under this definition.

B. Ralston: In the definition

section both in

section 1 and the other one at the end, unless I've missed it, there's no definition of input tax credit. I understand from some of the review I've done of the statute that there are a number of concerns about the possible

interpretation of things such as telecommunications services, for example, or Internet access.

The prediction of one lawyer at a seminar I attended — I think the minister spoke at this seminar — was that Internet access will be litigated for years to come in terms of classifying it as an input tax credit. So I find it somewhat surprising that there's no definition of input tax credit in this section. Obviously, as the minister has pointed out, this is an important part of the proposal.

Can the minister explain why there's no definition of input tax credit in the definition

section and where that definition might be found? Or is it intended to define that important aspect of the legislation by regulation?

Hon. C. Hansen: The input tax credits under this new system would be administered by the Canada Revenue Agency, so those

definitions would be included in federal statute.

[1535]

B. Ralston: I think the minister might have misspoken, because he said "income tax credit" and I think it's "input tax credit." Certainly, the view was at the seminar I attended that there would be a host of litigation and that the definition was not clear. We'll perhaps come back to that a bit later.

Can the minister, then, just explain once again…? As I understand it, the

definitions in

section 205, then, come into force two months from now, and these

definitions, assuming that the guillotine comes down at five o'clock tomorrow and the Lieutenant-Governor is in the chamber shortly after that…. This may become the law.

[ Page 4984 ]

However misadvised and however much that flies in the face of the sentiment of the people of B.C., it'll be law.

Can the minister explain why, if these

definitions are provisional for only two months, the amendments that are contained in

section 205 at the end of the statute weren't organized in a more logical way in order to assist the public to understand the statute?

Hon. C. Hansen: I think, as I indicated earlier in answer to one of the member's previous questions, these

definitions are required for the implementation of the act for the period from May to July. The other, further

definitions in

section 205 will be required as of July 1, and those

definitions will be consolidated with these

section 1

definitions and presented in an alphabetical order.

Section 1 approved on division.

section 2.

B. Ralston: The reference here is to taxable supply —"Taxable supply made in British Columbia." Can the minister explain the significance of adopting

section 144.1 of the federal act that attempts or defines a taxable supply made in British Columbia and the significance of that for the act? I think that in a tax statute that might be obvious, but a number of questions do flow from that.

Hon. C. Hansen: This provides certainty with regard to when a supply takes place in British Columbia and, hence, would be subject to the act. This provision clarifies that for the purposes of the point-of-sale rebates, which are administered by the Canada Revenue Agency and the residential energy program, the federal place-of-supply rules apply to ensure that both are coordinated with the harmonized sales tax.

B. Ralston: Looking at

section 144.1 of the federal act: "…a supply is deemed to be made in a province if it is made in Canada and is, under the rules set out in

Schedule IX, made in the province, but is deemed to be made outside the province in any other case and a supply made in Canada that is not made in any participating province is deemed to be made in a non-participating province."

I think the last clause might be obvious. But can the minister give an example of a purchase where the vendor is in British Columbia and the purchaser is in Alberta and whether that would be deemed to be, for example, supply in British Columbia?

Hon. C. Hansen: To give a specific example, if somebody was ordering, say, a household generator, a backup power generator, and they were ordering that from Alberta and it was being shipped into British Columbia to a British Columbia resident, then the vendor of that product in Alberta would have to charge the 7 percent B.C. provincial portion and remit that to the Canada Revenue Agency.

[1540]

B. Ralston: That does pose obvious practical problems, and I think it refers back to the tax leakage and the underground economy question that I referred to earlier.

But for those citizens and businesses that are operating very close to Alberta — whether in Dawson Creek, Fort St. John in the Peace; or in Fernie, Cranbrook in the East Kootenays…. If a purchaser is from Alberta and the goods are sold in British Columbia and either shipped or sent to Alberta, I take it that the HST would be required to be paid, whatever the competitive disadvantage it might put that vendor in, in relation to a sale of an identical good across the border in Alberta.

Hon. C. Hansen: No, the member is not correct. If a store in British Columbia has a purchaser from Alberta and it would be shipping a product to Alberta, to an Alberta purchaser, it would only have to charge the 5 percent federal portion of the HST.

B. Ralston: I'm always happy to be corrected, because I think that might be good news for some businesses along the Alberta border.

In that particular case, then, is the requirement that the goods be purchased and then immediately shipped to Alberta? If a purchaser comes to a retail outlet in one of those towns in the East Kootenays or in the northeast, in the Peace country, and the purchase is made by a resident of Alberta, is that not considered supply in British Columbia in accordance with

section 144.1?

[C. Trevena in the chair.]

Hon. C. Hansen: Actually, I think maybe the example that I gave the member earlier was…. I should rephrase it. The example I used of a portable generator is probably not a good one, because this

section only applies to the point-of-sale rebates.

For example, if someone were to buy a children's car seat from Alberta and have it shipped into British Columbia, then the vendor in Alberta would be able to apply the point-of-sale rebate that applies for those products to ensure that the B.C. purchaser would not have to pay the additional 7 percent provincial portion of the HST. The scope of this particular

section only pertains to those items.

B. Ralston: I confess to finding that a surprising

interpretation. I can see, in

section 4(2), which I'm sure we'll get to in due course, which speaks specifically of

[ Page 4985 ]

rebates…. "For the purposes of this Part, a person is resident in British Columbia if the person is deemed to be resident in British Columbia under

section 132.1…of the federal Act."

I would have thought that that was the

section that governed the issue of residency for the purposes of supply in British Columbia, for the purposes of a rebate. Certainly,

section 2 seems to be the general

section which applies to the whole act. It's certainly not qualified in any way in

section 2. It simply refers to: "For the purposes of this Part…." It doesn't restrict it. There's no dependent or subsequent

section or subsection that delimits the scope of this section.

I just want to make sure, for the purposes of those people who may be reviewing it and those judges and lawyers who may be wanting to interpret this in the future, that the answer that's given here is accurate. At first blush, it doesn't seem to me to bear the weight of that kind of

interpretation.

[1545]

Hon. C. Hansen:

Section 2 is there to determine where a transaction is deemed to have taken place,

whereas the other

section that the member referred to,

section 4, actually pertains to when an individual is deemed to be a resident of British Columbia.

B. Ralston: Well, I appreciate that distinction, but the broader question is whether this

section applies to the whole of the act or simply to the issue of the point-of-sale rebates that are referred to in

section 4, which we have yet to deal with but will deal with, presumably, fairly shortly.

Once again, I just want to be sure that what the minister is saying is that

section 2 applies — and that definition applies — only to those point-of-sale rebates that are set out in

section 4 and any that may be added by subsequent amendment of the federal-provincial agreement.

Hon. C. Hansen: It applies to all of the act.

B. Ralston: I'm glad the minister has made what I would suggest is a correction. I think that's helpful, and that's certainly how I would have understood it.

The minister has talked about the participating provinces and non-participating provinces. As we know, there are non-participating provinces, where there is no HST — Alberta, Saskatchewan, Manitoba. This definition,

section 144(1) — how would that be impacted by the decision, unlikely as it might be, of Alberta to join the HST scheme and enter into an agreement with the federal government?

Hon. C. Hansen: It would not be affected at all.

Section 2 approved on division.

section 3.

B. Ralston: This

section is part of the phasing out of the social service tax to make way for the HST. Can the minister confirm that the repeal of this tax act doesn't take effect until July 1, 2014?

As much as members opposite on the government side would want to create the impression that the Social Service Tax Act is disappearing on July 1, the minister can confirm, I hope, that it will be there until July 1, 2014. There'll be a series of consequential amendments which will diminish its effect as the HST comes into force on July 1, 2010, assuming that we get to those amendments before the guillotine comes down at five o'clock tomorrow.

Hon. C. Hansen: The social service tax that is imposed under this act ceases as of July 1 — as of midnight on June 30, to be precise. But what this allows for is the continued audits. There are usually a number of years that officials, that ministry staff, will be involved with doing PST audits to ensure that we collect the appropriate amount of PST that needs to be assessed for the period up to and including June 30, 2010. This

section provides for that.

[1550]

B. Ralston: Well, given that the PST will still be in effect, in some respects, until the date of July 1, 2014, can the minister then advise who will be conducting the work that he's just referred to in his answer — audits, assessments?

Will that be federal employees, formerly provincial employees transferred to Canada Revenue Agency, who will be undertaking that work on behalf of the province on a contract basis? Is that part of the agreement to transfer that work, or will there be, specifically, provincial employees who will retain the authority and the obligation to carry out that work on behalf of the province?

Hon. C. Hansen: Just to be clear, the PST ceases to exist on July 1, but what will continue are the powers to do the audits and the assessments and the appeals. To answer the member's specific question, those audits, assessments and appeals will be administered by provincial staff in the Ministry of Finance.

We have an agreement in place now for the transfer of the revenue staff from the provincial Ministry of Finance to the federal government, but that is staged in a way that allows for the appropriate number of staff to be retained in the ministry until such time as these audits and assessments and appeals can be concluded.

B. Ralston: Can the minister advise how many employees are expected to be retained by the provincial government to carry out this work over…? I believe it's a

[ Page 4986 ]

four-year period, but I could probably ask a subsequent question about that.

Hon. C. Hansen: I'm going a bit from memory here, but I believe that the total number of employees impacted by this transfer is about 320. There is a minority of that number that will be retained by the ministry until the audit process and assessment process is completed.

B. Ralston: This may be covered in later specific transitional provisions, but my understanding is that there is a four-year limitation period after the obligation to file a provincial sales tax return is triggered, and after that four-year period expires, then no further collection action can be taken.

Is that the rationale, then, for the four-year period before the act ultimately has no longer any force at all?

Hon. C. Hansen: The date of this repeal for July 1, 2014, is because the standard assessment period is four years. This has to do with the assessments, not necessarily with collections. But if the assessment is completed within the four years, then there are still the provisions that the province could continue to pursue collections if they were still outstanding at that time.

B. Ralston: Just so that I'm clear, then. The director that we referred to earlier, and that the minister deferred questions on, appears to have some authority to conduct the assessment. So I take it — and perhaps the minister can indicate, although this would be stepping outside the self-imposed bounds on answers that he's placed on himself — that that director would continue, if he or she chose to, to direct assessments, enforcement action, collections during that four-year period.

What I'm taking the minister to say is that upon the expiration of that four-year period, if there had been a completed assessment and it had not been collected, it would still be open to the province to continue to try and collect that outstanding revenue even after the expiration of the four years. Just so we're clear there.

Hon. C. Hansen: I think the member referenced the director that we had talked about earlier. It wouldn't necessarily be the same person. There is the commissioner, who is responsible for the administration of the Social Service Tax Act, and it is that individual that would have that responsibility. But aside from that, the member was correct.

[1555]

B. Ralston: Can the minister briefly, then…? During this four-year transitional period until 2014, it seems as though there will be some of the apparatus of the provincial sales tax still remaining in the provincial government. The minister has made reference to a commissioner. There's a statutory definition of a director, and there are some staff. That unit will continue, then, until 2014. Is that correct?

Hon. C. Hansen: Yes.

B. Ralston: As part of the transitional features that will be engaged by

section 3, can the minister advise: what is the obligation of a director of a company? There are specific obligations placed on directors of companies where a provincial sales tax is owed. What is the ongoing obligation after July 1, 2010, of a director of a company that owes a provincial sales tax? And is there a limitation period on the potential liability of that director to pay provincial sales tax should it still be owing?

Hon. C. Hansen: With this act, those liabilities and obligations with regard to provincial sales tax collected up to and including June 30, 2010, continue. In the case of…. The obligations and liabilities that a director would have today are for two years. That would remain the same.

B. Ralston: Similarly — although the legislation, should

section 3 pass, will be repealed — what's the continuing obligation of directors in terms of their own personal liability for unpaid source deductions? The minister has mentioned a period of two years. Upon the expiration of two years, if a director has liability for unpaid source deductions, does that then end? In other words, if you can dodge it for two years, does your obligation to remit end at that point?

Hon. C. Hansen: Source deductions are not covered by the social services act or this act that's before us. They are covered by the Income Tax Act, unless he's referring to some other type of source deduction.

B. Ralston: Similarly, during the period that we're speaking of — the four years — should there be a dispute resulting from an assessment…. Is the appeal mechanism that's available now under the Social Service Tax Act — I believe it's to go to the B.C. Supreme Court — still available if there's a dispute — as a way of settling such a dispute between the government and a person who is alleged to owe outstanding provincial sales tax?

Hon. C. Hansen: Yes.

B. Ralston: When would that avenue of appeal expire? Would that expire in 2014, or is that something that ends after two years?

[1600]

Hon. C. Hansen: Anyone that would like to appeal has 90 days from when the notice of assessment goes out, and that doesn't change as a result of these provisions.

[ Page 4987 ]

B. Ralston: Just so I'm clear, then: when does the legal authority of the branch to send out a notice of assessment about a disputed provincial sales tax end? Does it end on July 1, 2014, or before?

Hon. C. Hansen: We fully expect that all of the assessments and audits would be completed well in advance of 2014 so that any individual who received such an assessment would still have the 90-day provision for their appeal well within the timeline, before the act was formally repealed in 2014.

B. Ralston: As the minister knows, there are a number of exemptions under the Social Service Tax Act. Can the minister advise when, assuming this

section passes, those exemptions will expire? There are some which might pose ongoing…. In the sense that they would straddle, if they're periodic payments on the purchase of production machinery and equipment…. For example, there are, as the minister well knows, a number of exemptions for production, machinery and equipment under the Social Service Tax Act.

Can the minister then advise when those exemptions will apply? If it's better dealt with under

section 4, then we can pursue it there.

Hon. C. Hansen: Where the exemptions apply under the transitional rules, those exemptions would be available.

B. Ralston: Then that's a question that's governed entirely by the transitional rules, and the minister is not going to give an answer beyond that, at this point, I take it? Is that fair to say — point 1?

And secondly, it would seem to me — perhaps we could pursue this under

section 4 — that there are a number of point-of-sale rebates and exemptions, relatively few, that were negotiated as part of the deal with the federal government, but all the other exemptions under the Social Services Tax Act fall away and are no longer available.

I think it's important that at some point in the debate the minister engage in a discussion. Certainly that's my intention — to engage in some discussion about that. Given the minister's answer here, is he agreeing that we can pursue it under

section 4? If not, then where in the act does he wish to engage that discussion?

[1605]

As the minister knows, the government has chosen to limit debate on this committee stage part of the bill, and the guillotine will fall at five o'clock tomorrow. Even if there are important areas and questions that should be addressed, they won't be able to be addressed. I think that's an important area. There's a lot of public interest in that.

The minister has kind of shrugged his shoulders when asked about the disappearance of those exemptions. In one radio interview he simply said that they were nice to have, but we won't have them anymore, and that's that. So I think it's important that at some point we engage in some discussion about that.

Obviously, that's part of the specific result and the intention of

section 3, so I would have thought it was better dealt with here in broad terms and maybe some more specifics in

section 4. But the minister doesn't appear to agree with that.

I'm asking the minister, then, to identify where in the debate he's prepared, if anywhere…. He's also said to some questions that he won't entertain an answer here in the chamber at all. So can the minister indicate where he's prepared to entertain those questions?

Hon. C. Hansen:

Part 17 is the

section that deals with the transition provisions for the Social Service Tax Act, and that would be the appropriate section.

B. Ralston: I'm just looking at

part 17. So that's sections 86, 87, 88 and 89 and thereon.

Perhaps the minister can, beyond that part, indicate at which point he's prepared to entertain that series of questions. Or is it simply scattered throughout the next number of sections including

part 1.2, "Transitional Rules"?

Hon. C. Hansen: I'd be quite prepared to field those questions under

part 1.2 — as the member suggested, I think — the

section titled "Transitional Rules."

B. Ralston: Just so that we're clear, then. The minister is not prepared to answer questions about the effect of the repeal upon exemptions from the Social Service Tax Act at this point, although the

section here says simply that the Social Service Tax Act is repealed. It obviously has legal consequences to all those exemptions.

In my view, subject to any ruling of the Chair, it's in order. I appreciate that the minister has a broad discretion, but when something is in order, I think it really is more appropriate than not to attempt to answer the question.

Is the minister saying that he simply will not answer those questions at this point under this section?

Hon. C. Hansen: I'm quite prepared to answer the questions when we get to the appropriate sections, which is the way the committee stage works.

But if I can share this with the member, maybe that might help — at least in a high-level sense — give him the information he's looking for.

"If PST is payable under the transitional rules outlined…any applicable exemptions under the social service…act will continue to provide relief from the PST payable. If the HST is payable under the transitional rules, the exemptions under the Social Service Tax Act will not apply.

"However, purchasers will not be required to pay HST on goods and services that are exempt or zero-rated under the Excise Tax Act of Canada, nor will they be required to pay the provincial component, the 7 percent, of the HST on motor fuels and other

[ Page 4988 ]

items designated for the point-of-sale rebates. In addition, the provincially administered credit on residential energy will provide targeted relief from the 7 percent provincial component of the HST on the purchases of residential energy, similar to the current PST exemptions on residential energy."

[1610]

B. Ralston: I thank the minister for that answer. The fact that exemptions will disappear is obviously the subject of some considerable public debate.

The minister will recall that his predecessor, Carole Taylor, in this House made a speech in 2008. In that budget speech she spoke of a number of sales tax reductions to aid the consumers and the public to make choices that would be for the good of the environment.

For example: "PST relief will be introduced for electric bicycles, scooters and electric motorcycles." I'm reading from her speech. "Relief will be provided for short-term passenger vehicle rentals." This one addresses the co-op car rental issue that has been brought forward this past fall.

"If you do decide to renovate your home, a tax exemption will be provided on insulation for hot water tanks, pipes and duct work. Energy Star–rated fridges, freezers and washing machines will also be exempt from PST, completing and complementing the rebate programs offered by utilities and, in some cases, by local and regional governments."Again, quoting from the minister, Carole Taylor.

One can begin to understand the level of her distress at what she's described as an ideological and factual shift of tax onto consumers when one looks at what was brought forward in that budget, which is now going to disappear.

Let me quote again from her budget speech, and this would be, as a result of this section, directly relevant to what happens if this

section is passed: "This budget provides a PST exemption on production machinery and equipment used by local governments for power production and cogeneration, and we're investing $5 million to expand solar power initiatives."

There were a number of initiatives pursued in that budget, and the policy avenue that was chosen was PST exemptions. I think conventional economic wisdom, as controversial sometimes as it might be, was to provide an economic incentive for people to make those kinds of choices.

My colleague from Saanich South has been engaged in a very spirited campaign, with a lot of public support, about removing the exemption on bicycles. That is a PST exemption that was brought in by Hugh Curtis back in the 1980s, when he was Minister of Finance. These are longstanding public policy choices that have been made for the good of the province.

By doing away with the Social Service Tax Act, the number of exemptions has been drastically narrowed. The minister has agreed to that in his negotiations with his colleague Mr. Flaherty, the federal Finance Minister. When questioned about it, he has really just shrugged his shoulders and said that those policy choices are gone — too bad, so sad seemed to be the attitude.

I think that's a very dismissive and an unfortunate way of dealing with important public policy initiatives that there have been a legacy of since at least the 1980s, in the case of bicycles.

As the minister may know, the member for Saanich South has broad support among bicyclists, environmentalists and bicycle shops throughout the province. Of course, the member for Comox Valley was very dismissive of those efforts here in the Legislature and, I think, will encounter a fair degree of public opprobrium as a result of that.

This decision to reduce and limit the public policy options available to the province by repealing this piece of legislation is something that we on this side of the House certainly strongly oppose, and the campaign of the member for Saanich South is a very good example of the public support that exists for our position.

I expect that the minister is not willing to comment at this time, but it's certainly open to him if he chooses to.

[1615]

Hon. C. Hansen: I think the most simple way that I can sum up the purpose of this particular

section is that it ensures that every product in British Columbia and all services in British Columbia will be exempt from the provincial sales tax.

[1620]

Section 3 approved on the following division:

YEAS — 42

Horne

Letnick

McRae

Stewart

I. Black

Coell

McNeil

Chong

Polak

Yamamoto

Bell

Krueger

Stilwell

Hawes

Hogg

Thornthwaite

Hayer

Lee

Reid

Thomson

Falcon

Penner

de Jong

Hansen

MacDiarmid

Abbott

Lekstrom

Coleman

Yap

Cantelon

Les

Sultan

McIntyre

Rustad

Cadieux

van Dongen

Howard

Lake

Foster

Slater

Dalton

Pimm

NAYS — 35

S. Simpson

D. Black

Fleming

Farnworth

James

Kwan

[ Page 4989 ]

Ralston

Popham

B. Simpson

Austin

Karagianis

Brar

Hammell

Lali

Thorne

D. Routley

Horgan

Bains

Dix

Mungall

Chouhan

Macdonald

Corrigan

Chandra Herbert

Krog

Simons

Gentner

Elmore

Donaldson

Fraser

B. Routley

Conroy

Huntington

Coons

Sather

section 4.

B. Ralston: I want to turn to the definition of "qualifying property." These are referred to in each case with the adjective "prescribed," but I take it that these are the point-of-sale rebates negotiated….

Interjections.

The Chair: Member, just one moment.

Could all members please keep their voices down. We are trying to proceed with committee.

Member for Surrey-Whalley, please continue.

B. Ralston: Yes. This is an area where there is some confusion on the part of government members, so perhaps it might be wise to listen about existing exemptions.

[1625]

These are existing exemptions under the provincial sales tax act — (a), (b), (c), (d), (

e) and (f) — and they are now part of the negotiations engaged in with the federal government. They form the 5 percent of the GST sales tax base that's provided for point-of-sale rebates after the legislation passed by the federal government and the provincial government, should it come into force.

Can the minister confirm that these are the only exemptions that he was able to negotiate, given the restriction placed on entering into those, and that a number of other exemptions in the present sales tax act, Social Service Tax Act?

I'm looking at

section 70, exemptions in relation to food, clothing, shelter;

section 71, health and safety;

section 72, in relation to publications and school supplies; agriculture and fisheries; fuel, energy and conservation; transportation; industry and commerce. And other general property and service exemptions,

section 77; exemptions for purchases or lease intended for resale or lease,

section 78; and other exemptions in

section 79 that….

Unless they are specifically set out here in this section, those exemptions are no longer available to purchasers of any of that range of goods that is set out in the present Social Service Tax Act.

Hon. C. Hansen: As I've mentioned on other occasions, everything that is currently exempt from the goods and services tax continues to be exempt from the 7 percent portion of the HST, the provincial portion, after July 1. These items….

I think the member made reference to the 5 percent threshold of the goods and services tax base. In terms of those products that would be subject to a point-of-purchase rebate on only the 7 percent provincial portion and rebates that would be administered by the Canadian revenue agency, this list under

section 4, under qualifying property, are the items that total up to that total 5 percent room. It basically, totally exhausts that 5 percent allowance that the federal government allowed for.

B. Ralston: The list that's set out in statutory form in the Social Service Tax Act begins at

section 70 and continues through to

section 79(1). Those are specific Social Service Tax Act exemptions. In other words, those are provincial exemptions, and unless they're specified in this group of one, two, three, four, five, six here — (a), (b), (c), (d), (e), (f) — they're are all gone.

The availability of those exemptions, whether it's production machinery and equipment, whether it's a chainsaw on a cutblock, whether it's a skidder on a cutblock, whether it's production machinery used in a sawmill….

That's set out, as the minister will know, in the Ministry of Finance tax bulletin:

"Sawmill machinery and equipment used on the production line, such as saws and planers are a direct and integral part of the process that transforms a log into a finished product. Therefore, the production line equipment qualifies for the exemption."

That exemption is gone.

On page 11 of that bulletin, they give further examples of qualifying production machinery and equipment which is exempt from PST now:

"Machinery and equipment used to store raw materials… machinery and equipment used on the production line — e.g., lathes; drills, saws and blades, digesters, paper dryers, sawdust cookers and lumber kilns including kiln strips; computers used to monitor the operation of production machinery and equipment — e.g., computers used by a pulp mill in its control centre to monitor pulp production; handheld tools used in the manufacturing process but not for repairs and maintenance."

Those qualify for a PST exemption now. Those exemptions, by the decision that this minister and this government has made, are gone. Now, I'm sure the minister will find that easy to confirm because I'm reading from the Ministry of Finance tax bulletin based on manufacturers under the Social Service Tax Act.

[1630]

The minister, when questioned in estimates last fall, was unable to cite any specific study about the impact of these exemptions on production machinery and equipment, which had been in existence since 2001. A ballpark dollar value of the tax forgone was about $110 million a year, so roughly a billion dollars in forgone revenue

[ Page 4990 ]

focused, in this particular case, on what economists consider important investments to make to increase productivity.

The productivity debate continues. British Columbia has the worst productivity of any province in Canada, according to Mr. Finlayson of the B.C. Business Council. There was no provincial sales tax assessed on these things. Investments were made. No effort to study that was done.

The question comes when these exemptions are no longer available. The minister, I'm sure, will say: "Well, these kinds of operations get input tax credits." Will the minister confirm that unless the operation has total sales of greater than $10 million, input tax credits will not be available for the first five years?

Those businesses that presently — a small logging operation, for example — get exemptions on a wide range of items involved in the production process won't have input tax credits available to them for five years. So they will be worse off — not better off, worse off — as a result of the actions of this government.

Hon. C. Hansen: I must say I find the member's question astounding, because clearly he doesn't understand how a value-added tax works. What will happen as of July 1 is that every product, all goods and services, will be exempt from the social service tax, the PST, not just the items that are listed on the pages that he referenced.

All of the production equipment that he talked about, whether it's used in a logging operation or anywhere else — not just those things that he indicated, but all equipment and services that are needed to be sourced by a logging contractor — will be rebated through the input tax credit program.

For example, I'll pick something that's not PST-exempt today, and that's the cost of a pickup truck for that logging contractor. Today he's going to be paying 5 percent GST on it. He gets that rebated through the input tax credit process, and he pays either 7 percent or 10 percent PST on that pickup truck. He has to build the cost of that PST into his cost of operations.

As of July 1, if he buys a pickup truck, he actually gets the entire 12 percent of the harmonized sales tax, both the 5 percent federal portion and the 7 percent provincial portion, rebated to him. That logging contractor will be far better off and have significantly lower costs as a direct result of the harmonized sales tax because of getting the benefit of the rebate of the full 12 percent of HST on all of the costs of running that company.

B. Ralston: But the minister will agree that if the revenue of the company is greater than $10 million, input tax credits will not be available for the first five years. That's very clearly set out in the transitional rules. It may benefit some companies, very small ones, but $10 million in revenue for many logging operations would not even make it as a maybe mid-sized operation. That's revenue — not profit, revenue.

Those input tax credits, the ability to seek those on all this range of production equipment, won't be available. You'll be paying 12 percent on everything. If you make more than $10 million in revenue, you won't be able to get any input tax credits. So for that transitional period, for the five years, you will be worse off, not better off, because right now, on a number of these items available for production, you don't have to pay provincial sales tax because of the production machinery and equipment deduction.

I think, rather, it's the minister that doesn't understand the legislation as it exists now, rather than myself.

[1635]

Hon. C. Hansen: Well, first of all, I think we're way off this section, but the short answer to the member's point is that companies that have revenues over $10 million a year have some very minor restrictions on input tax credits that they can use for these incremental startup years, which is interesting.

You hear lots of people saying that somehow this shift to a harmonized sales tax is a big benefit for big companies and not for small companies. It's actually because of this slight restriction of some input tax credits for large co