2013 Legislative Session: Fifth 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, February 20, 2013

Afternoon Sitting

Volume 41, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Routine Business

Introductions by Members

Introduction and

First Reading of Bills

Bill 10 — Seniors Advocate Act

Hon. M. MacDiarmid

Bill 8 — Miscellaneous Statutes Amendment Act, 2013

Hon. S. Bond

Bill M202 — Fall Fixed Election Amendment Act, 2013

B. Simpson

Statements

(Standing Order 25B)

Aboriginal Student Centre at Capilano University

J. Thornthwaite

Morden Colliery Historic Provincial Park

D. Routley

Shuttle service between Burnaby North and Hastings area

R. Lee

Youth advisory council for Delta South MLA

V. Huntington

Downtown Maple Ridge Business Improvement Association

M. Dalton

Energy conservation initiative in Rossland

K. Conroy

Oral Questions

Balanced budget and budget priorities

A. Dix

Hon. M. de Jong

Budget revenues from sale of government assets

B. Ralston

Hon. M. de Jong

Budget revenues and financial reporting by B.C. Hydro

J. Horgan

Hon. M. de Jong

Budget provisions for health care services

M. Farnworth

Hon. M. de Jong

Budget provisions for services to vulnerable children

C. Trevena

Hon. S. Cadieux

Budget provisions for community living services

N. Simons

Hon. M. de Jong

Petitions

K. Corrigan

Reports from Committees

Select Standing Committee on Health, report for the fourth session of the 39th parliament

M. McNeil

M. Farnworth

Tabling Documents

Final Report of the 2010 British Columbia Judges Compensation Commission

Point of Privilege

(Reservation of Right)

D. Routley

Orders of the Day

Budget Debate (continued)

B. Ralston

Hon. R. Coleman

N. Macdonald

Hon. N. Letnick

H. Lali

Hon. R. Sultan

C. Trevena

[ Page 12923 ]

WEDNESDAY, FEBRUARY 20, 2013

The House met at 1:35 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

H. Lali: Today visiting us in this House is a good friend of the Legislature, a former MLA. He was MLA for almost 13 years, and he also served as the longest-serving government Whip in the entire Commonwealth. He finished his career as minister of small business. It's my good friend from Port Alberni, the former member from Alberni, Gerard Janssen, and his better half, Florence. They are visiting us here on the floor of the Legislature. Will the House please make them welcome.

K. Corrigan: It gives me a great deal of pleasure today to introduce Angela Liu. Angela has recently joined my office and the member for Burnaby-Edmonds. She's had a wonderful day here today. There's been a smile from ear to ear as she has looked at this wonderful building and met many MLAs from both sides of the House, research people and so on.

Angela, may your smile whenever you come to this place continue.

Will you please make her feel very welcome.

Hon. S. Bond: It's not often that we get to introduce guests from the faraway place that we live, but I'm very delighted today to have in the gallery someone who was elected to his first term as mayor of the village of Valemount in the last municipal election. Mayor McCracken is here to meet with a number of ministers on important topics, particularly the economic circumstances that we have in our wonderful Robson Valley. I would ask the House to make Mayor McCracken welcome on this special trip to the Legislature today.

D. Horne: It's with great pleasure that I introduce 25 students from Gleneagle Secondary School, who are in the gallery behind me, led by their teacher, Chris Turpin. They have had the opportunity to tour through the Legislature today. Also with them are two chaperones, Chris's mother, Marilyn Turpin, as well as Eiman Borat Torabi. I wish the House would make them welcome.

Hon. N. Letnick: They say good things come in threes. I would like to announce that after three years working in the Legislature for the Ministry of Agriculture, Heidi Scott, my administrative assistant, today is 30 years of age. I'd like the House to join me in congratulating her.

J. Trasolini: It is my pleasure to introduce Bruce Ferguson, president, and Manuel Alvernaz, executive board member, of the Construction and Specialized Workers Union Local 1611, also proudly known as the Labourers Union. CSWU represents 6,000 men and women in British Columbia and the Yukon.

The Labourers Union has been a part of organized labour in B.C. since 1937. Members have been involved in all aspects of building this province, from dams for hydroelectric power, gas pipelines, mines and roads, as well as all types of buildings. Can the House please join me in making them welcome.

[1340]

M. McNeil: In the gallery today is a good friend of mine, Catherine Mustafa. She is someone that I grew up with in Vancouver, but she now resides in Victoria. We actually went to high school together, so that's around ten years ago. [Laughter.] I'm really thrilled to be able to welcome Catherine and hope you'll join me as well.

J. Kwan: I have the pleasure of introducing an old friend, someone who was an effective member of a small research team for the NDP caucus during the period of 2001 and 2005. She's visiting here today with her family — Sarah Hilbert-West. I want to say that she lives in Vancouver–Mount Pleasant, but she doesn't. To the delight of the Attorney General — I know she'll be pleased to hear this — she actually is from Prince George.

She's here with her entire family. Isaac is also in the gallery today. And in the precinct somewhere is her husband, John; her daughter, Hannah; and her other son, Jacob. So I ask the House to please make them very welcome.

M. Coell: I have two guests for question period today, Julia Phillips and Eddie Zhao. Will the House please make them welcome.

V. Huntington: I'm really pleased to be able to introduce five students today from Delta South, young people who act as advisers to my office. Would the House please make welcome Alex Gaio, Antony Tsui, Ben Laird, Dylan Kruger and Katy Weartherly.

G. Hogg: A few weeks ago a gentleman came into my office who said he wanted to learn more about what we

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were doing over here. He didn't have an active interest or understanding of a lot of things but wanted to come here and learn. He joins us today, so would you please give Jack Procter a rousing welcome to the Legislature.

D. Black: It gives me a great deal of pleasure today to introduce people from my family — my aunt Mabel Bestwick, who's visiting here from Nanaimo. She's been a lifetime resident of Nanaimo in my hon. friend's constituency. In fact, in 1939 she was the May Queen in Nanaimo. That was an honour that she celebrated and that they celebrate on and on again in Nanaimo when they bring all the May Queens together every year.

She was my aunt who took me under her wing and always made sure that I had an opportunity to visit my family in Nanaimo. I lived on the Mainland. She's a very special person in my life, so I take a great deal of pleasure in having her here today. Accompanying her is my cousin Diane Bestwick. Would the House please make them very welcome today.

R. Austin: It's my pleasure today to introduce someone visiting from Kitimat. Rob Goffinet is a retired teacher. I believe he spent 35 years in that profession, but he's not resting on his laurels. He's a twice-elected city councillor for the district of Kitimat. He's a good friend and, I would say, a political mentor. I'd like to thank him for all of his sage advice over the years, and I ask the members of the House to please join me in welcoming him.

D. Routley: It gives me great pleasure and honour to introduce two dear friends of mine, Mel and Thelma Schmidt, currently residents of Barriere. Mel grew up in Barriere and came to Vancouver Island in 1955. He was a logger and then worked in mills, finally working in the Crofton pulp mill. Mel is the sort that no moss grows on that rock. He's always moving and energetic. He's a fantastic volunteer in the community.

As an NDP member, he organized a long-running dinner called the Heritage Dinner, which featured such meats as bear, cougar, moose and such. So that was a real highlight in central Vancouver Island. After retiring from Crofton mill, Mel and Thelma established Clean Warmth Services.

[1345]

Thelma is from near the Legislature here but moved to Barriere when she married Mel. Both these two fine people are lifetime members of the NDP. They are stalwarts in the community wherever they are, always active, and I'd like the House to help me make them welcome to their Legislature.

Joining them today is my CA, Patti McNamara. Everyone knows how important the work is that CAs do — everyone in this House. Not everyone in the community knows until they enter one of our offices, and then they find out that what CAs do — for anybody who is listening — is build relationships throughout the public service.

There was a cartoon a while back of CAs starting their day. They were standing with blindfolds, with a dart, throwing it at the wall. On the wall was every possible issue that you could confront in British Columbia, from health care to seniors care to small business issues — whatever.

They need to be experts in all of those things. So our communities are lucky to have these people doing the work they do, and we are especially lucky to have them doing the work they do. I think their competence has to be rivalled by no one in this House — seriously. Well, CA — I mean, it kind of rhymes with "cover assets."

I'm very pleased to introduce my fine CA, Patti McNamara.

L. Reid: I have a friend who watches this place each and every day. She's somewhat of a captive audience at the moment because she is wearing a very large cast. I'd ask the House to join me in wishing well Alice Mann as she recovers.

Introduction and

First Reading of Bills

BILL 10 — SENIORS ADVOCATE ACT

Hon. M. MacDiarmid presented a message from Her Honour the Lieutenant-Governor: a bill intituled Seniors Advocate Act.

Hon. M. MacDiarmid: I move that the Seniors Advocate Act be introduced and read now for a first time.

Motion approved.

Hon. M. MacDiarmid: Our population in British Columbia is growing and aging. Over the next 20 years the number of seniors in our province will almost double to about 1.3 million people. This means resources need to be in place now to help the growing number of seniors live safe, healthy, active and independent lives. We want to make sure the voices of B.C. seniors continue to be heard and that their needs and concerns continue to be addressed in a timely fashion.

This new legislation paves the way for the creation of a seniors advocate. This will fulfil the commitment that government made in the seniors action plan to establish an office of the seniors advocate.

Once the legislation is enacted, British Columbia will be the first jurisdiction in Canada to have a seniors advocate. The seniors advocate will be a voice for seniors. The advocate will monitor seniors services and promote awareness. The advocate will also work collaboratively to identify solutions to systemic issues facing seniors and

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make recommendations to government to improve the welfare of seniors in our province.

I move that the introduction of the Seniors Advocate Act be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 10, Seniors Advocate 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 8 — MISCELLANEOUS STATUTES

AMENDMENT ACT, 2013

Hon. S. Bond presented a message from His Honour the Administrator: a bill intituled Miscellaneous Statutes Amendment Act, 2013.

Hon. S. Bond: I move that Bill 8 be introduced and read a first time now.

Motion approved.

Hon. S. Bond: I'm very pleased to introduce Bill 8, Miscellaneous Statutes Amendment Act, 2013. The bill will amend the following statutes: Child, Family and Community Service Act, Clean Energy Act, Forensic Psychiatry Act, Forest Act, Integrated Pest Management Act,

Interpretation Act, Liquor Control and Licensing Act, Medicare Protection Act, Provincial Symbols and Honours Act, Representative for Children and Youth Act, School Act and Statute Revision Act. The bill also makes validating provisions and consequential amendments to other statutes.

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

Bill 8, Miscellaneous Statutes Amendment Act, 2013, 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.

[1350]

BILL M202 — FALL FIXED ELECTION

AMENDMENT ACT, 2013

B. Simpson presented a bill intituled Fall Fixed Election Amendment Act, 2013.

B. Simpson: I move that a bill intituled Fall Fixed Election Amendment Act be introduced and read for a first time now.

Motion approved.

B. Simpson: British Columbians have lost confidence in pre-election budgets, and there are growing calls to change our fixed election date to the fall. As evidence of this, in an effort to restore confidence in this year's pre-election budget, the government spent taxpayers' money to obtain an independent assessment of the process they used to arrive at this year's revenue projections. But confidence will not be restored as long as pre-election budgets are never debated, never subjected to the scrutiny of opposition members and B.C.'s independent officers and never passed into law.

Spring fixed election dates also mean that every four years government ministries and dependent agencies do not get spending authority until halfway through the fiscal year, and the Ministry of Finance is forced to prepare multiple budgets. This adds a high and unnecessary degree of uncertainty to the functioning of government every fourth year. This short pre-election session is the ideal time to change B.C.'s fixed elections to the fall, starting with the next election after this one, in October 2017.

Making the change now does not offer an advantage to one political party over another, as voters, not polls, will determine the outcome of the May election. Changing fixed elections to the fall is one part of the independent MLAs' agenda for democratic reform. It's our sincere hope the government and opposition will support this necessary reform in this session so we can restore confidence in the province's budgeting process every year, and prevent future budgets and interim finance bills from being used solely for political purposes.

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

Bill M202, Fall Fixed Election Amendment Act, 2013, 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)

ABORIGINAL STUDENT CENTRE

AT CAPILANO UNIVERSITY

J. Thornthwaite: As anyone who has pursued a post-secondary degree can appreciate, a healthy learning environment is important. That's why I'd like to take this opportunity to highlight Capilano University's Aboriginal Student Centre, where I attended the official opening at the beginning of this month. Known as Ḵéxwusm-áyaḵn — "a place to meet" — the centre will support a positive, safe, supportive environment.

It's a welcoming place where students can meet, socialize, study and share their experiences as a community or even share a meal. The centre also includes regular activities such as weekly drumming circles and visits from

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First Nations elders.

Since the opening of the Capilano campus 40 years ago the number of aboriginal students attending has increased, and their success in their studies has also increased by 45 percent. To ensure that this number keeps growing, DeDe DeRose, the superintendent of aboriginal achievement, has been doing a great job for this province's K-to-12 students. Just last week it was announced that more aboriginal students completed high school than ever before, and I know that many of these students will continue on to pursue post-secondary education.

Capilano University, along with our government, is working collaboratively to preserve and promote the culture and history for all of the aboriginal students who attend and graduate. The university is offering programs that focus on aboriginal learning, including an indigenous film-making program, a tourism management cooperative diploma, courses in aboriginal law, the Squamish Nation language and cultural certificate. On the traditional territory of the Squamish and the Tsleil-Waututh nations of the Coast Salish people, the Aboriginal Student Centre really is a home away from home.

MORDEN COLLIERY

HISTORIC PROVINCIAL PARK

D. Routley: I rise today to share with the members some information about the Morden historical park. Morden mine historical park is truly a valuable asset to central Vancouver Island. One might ask: what is the value of history? The value of history is manyfold, of course — to academics, to appreciate our history, as tourist attractions for our local economies.

In B.C. we have no Parthenon. We may have a sort of coliseum, in a sense, that we stand in here, but we have no lasting memory of so much of our history. So much of the First Nations history melts into the landscape, as did the early history of logging and mining, which either, similarly, melted into the landscape or was knocked down in order to be replaced.

When we save it, it pays back. The Kettle Valley trestles and the Kinsol Trestle here on Vancouver Island are both fine examples of how these artifacts pay back to our economy and to our communities.

[1355]

The history of the Morden mine is that it's a mine-head tipple, which is the elevator that took the coal from the ground up and then loaded it onto railway cars. It's unique in that it was an advanced form of concrete construction at the time — one of the first examples of reinforced concrete construction in North America. It's one of only two such structures. The one in West Virginia is very well taken care of by the U.S. federal government and very highly valued.

Portland Cement came up with the technology. They were located in Tod Inlet, here in Victoria, which is now Butchart Gardens. The material was delivered to South Wellington, where Morden is, by railway car.

The Friends of the Morden Mine do diligent work in preserving this site and working to advocate for its preservation and restoration. This is a non-partisan issue, and I hope both sides of the House will recognize the value of Morden historical park and invest in restoring and preserving this wonderful site.

SHUTTLE SERVICE BETWEEN

BURNABY NORTH AND HASTINGS AREA

R. Lee: The beautiful, diverse community of Burnaby North is where I call home. There, we pride ourselves on sustainability. We bike. We take transit. We buy local.

For the Burnaby Heights and Capitol Hill neighbourhoods, a connection to the Hastings corridor is essential. Citizens rely on this busy street for everything from groceries to health care.

For the past 13 years community shuttles have provided transit service, linking local residents with Hastings, the Kootenay bus loop and a commercial area with more than 350 businesses and 40 medical facilities.

When the shuttles were first introduced, they significantly lowered costs and reduced traffic congestion. Over the years they have become a vital and treasured service for the families, students and more than 2,000 seniors living in the community.

Unfortunately, the service is somehow in jeopardy. TransLink has proposed a reconfiguration of the C1 and C2 routes, as well as a reduction in frequency from shuttle service every 30 minutes to every 60.

Any change would greatly impact residents and businesses. Shoppers rely on this service for access to businesses. Seniors rely on it for access to medical care. These shuttles connect our region and provide a sense of community. Changing the route will make it more difficult for residents to access local businesses and services and create a separation between neighbourhoods.

This is an essential service. On behalf of my constituents, I look forward to working with TransLink to keep transit user-friendly for Burnaby North.

YOUTH ADVISORY COUNCIL

FOR DELTA SOUTH MLA

V. Huntington: During introductions I acknowledged five of the young people who volunteer their time and intellect to provide their MLA a point of view this House so often lacks — the energy, perspective and personal experience of our youth.

The genesis of the Delta South Youth Legislative Advisory Council was accidental. Over the last four years a number of high school students had made appointments with me to discuss various issues. Many were do-

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ing school assignments. One was making a video for his graduation ceremony. Another pursued a discussion started during my visit to his civics class. Each student was a self-starter, intelligent, articulate and engaged.

Some time ago my office contacted these young people to ask if they would participate in a discussion of issues not only important to youth but to others, from the perspective of youth. Some of these students were now in their first year of university. Others were in grade 12. They all said yes, and they all came to my office on a Friday evening. They stayed late, and we ate a lot of pizza, and we had an extraordinary conversation.

By the end of the evening we had decided to create a standing council of youth, and I was a proud and very impressed MLA. The students created a Facebook page to ease communication. Together they decided that the name of the advisory group should be the Delta South Youth Legislative Advisory Council — to which name, I hasten to add, the Clerk kindly consented.

Our first discussion surrounded the critical issues of democracy and education. Out of the discussion came advice on school curricula that is truly valuable and which I hope to share with this House. It is an honour to thank my youth legislative advisory council for the contribution they are making to our society.

[1400]

My office has a full agenda for them today, and I think they will enjoy this exploration of the parliament of their province.

DOWNTOWN MAPLE RIDGE

BUSINESS IMPROVEMENT ASSOCIATION

M. Dalton: Driving through downtown Maple Ridge a few days ago with my wife Marlene, we remarked on its positive transformation over the past few years.

This hasn't happened by accident. A great deal of the credit goes to the Downtown Maple Ridge Business Improvement Association, or BIA. Created in 2007, the BIA exists to encourage and promote business in the downtown area through cooperative projects such as festivals, safety initiatives, street design, cleanup, graffiti prevention, street lighting, facade upgrades and holiday decorations. Our BIA provides regular merchant networking, trading opportunities and mural projects, and they even loan umbrellas to shoppers.

Maple Ridge's BIA has 700 members, and their participation has made it a very effective organization. The BIA won western Canada's Best in the West Award a couple of years back, and it was runner-up in three categories last year. Many thanks go to the board, including current president Phillip Hartwick, who devote countless volunteer hours for the benefit of members and the community. For the past six years Ineke Boekhorst has provided superb direction as its executive director.

The BIA movement in B.C. began in Gastown in the 1970s, when property owners, businesses and developers worked hard to revitalize the area. Since then, many dozens have sprung up across the province to enhance business and the communities.

The Downtown Maple Ridge BIA is a great example of their success. In conjunction with the district, the downtown core has become a vibrant place to be, with over 70 events and festivals. There is always something happening, whether it's Caribbean days, the lantern festival or a farmers market. As visitors and residents are drawn to Maple Ridge's centre, local merchants become more prosperous, employment increases, and our community becomes more connected. It's a win-win for everyone.

ENERGY CONSERVATION INITIATIVE

IN ROSSLAND

K. Conroy: The city of Rossland has been on a diet — an energy diet — and the results have been an unqualified success. Rossland is a community of just over 3,500 nestled high in the Monashee Mountains, home to the famous Red Mountain Resort, recently designated by the New York Times as one of the top ten spots in the world to visit. In December it was crowned, along with the city of Nelson, the best ski town in North America.

Cold winters and lots of snow initiated the drive behind the energy diet. Here are some of the stats. Two hundred and fifty-seven homeowners signed up to participate, and 135 invested in significant home improvements and accessed rebate programs through LiveSmart. That's about 24 percent energy savings per household, reducing greenhouse gas emissions by 2.5 tonnes annually. Thirty-five small businesses received free lighting retrofits. FortisBC says each business will save about $800 a year.

In a December snowstorm over 230 people exchanged incandescent lightbulbs for energy-efficient ones, and over 1,400 energy-efficient mini-kits were distributed to households by the Girl Guides. It is estimated that the residents of Rossland invested $1.6 million and created 20 to 30 jobs over the six-month period of the campaign.

In order to make this happen, there were a lot of people and groups involved. The initiators of the diet were the Rossland Sustainability Commission and local residents Steve Ash, Aaron Cosbey, Ann Damude and Terry Miller. Their tenacity and enthusiasm were a big part of what made this program so successful.

The mayor, council members and staff are also very supportive, along with the Columbia Basin Trust and the Nelson and District Credit Union. And of course, there's FortisBC and the incredible FortisBC Kootenay team, who managed all the details and coordinated the efforts — Shelly Hastay, Suzanne Stansbury and Doug Lamminen. Your dedication, whether in answering questions or arranging energy assessments, was and is really appreciated throughout our region.

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I hope this example inspires more communities to get on board with future energy diets. It's good for the environment, the economy and the sustainability of healthy communities — although not, unfortunately, with the support of LiveSmart.

Oral Questions

BALANCED BUDGET AND

BUDGET PRIORITIES

A. Dix: Yesterday the Minister of Finance rose and acknowledged that there may be "some skepticism" among members of the public about whether this is in fact a balanced budget. Actually, hon. Speaker, I don't think the public is skeptical at all. They know this isn't a balanced budget.

[1405]

In fact, it's the Liberals' fifth deficit budget in a row: $150 million pushed into a prior fiscal year; the second annual budget that depends on one-time revenues from the Little Mountain Housing sale — perhaps a new Liberal tradition; one-time asset sales of $450 million; forcing B.C. Hydro to borrow money to pay the province a dividend; unfunded commitments by the Premier. If all that's not troubling enough, budgets that contain unsustainable cuts in the basic services required by people — seniors, families, people with disabilities that depend on those things, which the government will not detail and will attempt not to detail in advance of the election.

How can the Minister of Finance go out and spend taxpayers' dollars on a partisan Liberal ad campaign claiming a balanced budget when this budget isn't balanced at all?

Hon. M. de Jong: I'm grateful, but I'll resist the invitation from the hon. Leader of the Opposition to repeat what I said at length yesterday in introducing the budget.

Tough decisions. Balancing the budget is not easy. It is a concept that members opposite are eminently unfamiliar with, I grant you. But this budget, as I said, does withstand scrutiny. It withstands scrutiny of an economic forecast council, upon which the revenue projections are based, and the added scrutiny of an eminent economist who was brought in to review those projections and actually added value by pointing out an area where improvements needed to be made and were made.

It is a budget that will withstand scrutiny on the spending side, based on a track record, particularly since the Great Recession hit a few years ago, of spending that shows we can exercise discipline. But balancing the budget is dependent on one thing, first and foremost. That is the political will to do it, and we have that will.

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

A. Dix: Well, I think the minister misunderstands what is tough in this budget. It's not tough to spend $16 million you said you wouldn't spend on partisan ads. It's not tough to spend $11 million on an awards pageant on the eve of the election. That's not tough.

Who this is tough for is adults with developmental disabilities, who will face, in this budget, cuts — all of them — to their supports. Page 130 of the budget — just so we're referencing these things. That's who it is tough for.

This is 2009 all over again, where the government claimed a deficit of $495 million — maximum — a week before the election and proved to be multiple times that afterwards. This is the same as 2009, when the government said, "No cuts to health care here," and then after the election imposed cuts to services to people that mattered.

If it's a tough budget, it should apply to the government too. Will the minister withdraw his ad campaign — not spend that money — claiming a balanced budget, which does not exist, in fact?

[1410]

Hon. M. de Jong: There's something else that's difficult. That is moving beyond a pattern — at least a four-year pattern — of nothing but criticism and moving to reveal at a crucial time in advance of the next election the Leader of the Opposition's option, vision, because we hear it in bits and pieces.

We have disclosed ours in detail, are answerable for it and, in fact, are proud of delivering a balanced budget. But what do British Columbians have upon which to base their decision from the opposition thus far? The hon. opposition critic opining, "Well, we might get around to balancing the budget in four or five years" — four or five years. "Tomorrow, tomorrow, we'll balance tomorrow." It's Little Orphan Annie fiscal policy from the opposition.

We heard the member for Victoria–Beacon Hill this morning, when asked a direct question in an interview: "Well, what's your policy on taxation as it relates to corporations?" "Well," she said, without daring to want to commit to anything, "you know, we've talked about 2 percent."

The time for that kind of airy-fairy speculation is over. I understand they're not going to support our balanced budget, but let's hear their version.

Interjections.

Mr. Speaker: Members.

The Leader of the Opposition has a further supplemental.

A. Dix: I'm surprised to hear the minister talk about corporate taxes. I'm surprised. I understand….

I recall his speech — I'm sure he does — when I said 18 months ago what we were going to do specifically on

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that question, and all the things he said. "It would drive investment from the province." And now the only things they can find to staunch their credibility gap are some of my plans. So I think it's probably the case in a few months that the public will tell them to get out of the way and have us implement what we're planning to do.

But to present, as they did in 2009, a budget so disrespectful of people who require services in B.C., a budget where they fail to detail the extraordinary cuts to adults with developmental disabilities, the extraordinary cuts to health services, just like they did in 2009, is simply unacceptable.

So the Minister of Finance would like to answer questions? Here's a question: why don't you cut the public advertising that is designed to promote the Liberal Party? Why is it okay to reduce the funding for adults with developmental disabilities and not cut Liberal Party propaganda?

Hon. M. de Jong: Well, I must confess I am always obliged to the hon. Leader of the Opposition for the advice he is prepared to offer. It is, I must confess, sometimes confusing and often inconsistent.

He offered this advice back in November on some program called The World Today . "There is a role for government advertising, typically around a government's budget. They inform the public around what's in the budget. These are normal advertisements that the government does."

[1415]

I understand that that was then and this is now, and 2001 was then and this is now.

This is a budget that I am already, as I'm sure many members are, receiving positive feedback about on the fact that we have had the courage to stand up and give the straight goods to British Columbians about the money we have and the money we don't have, and how we are allocating that in defence of families and advancing the cause of families and young children and ensuring that, through a $1,200 grant, they will have the resources they need to advance their skills training and education when they graduate.

That's the power of savings. That's contained in this budget, and that is going to serve British Columbians well in the future.

BUDGET REVENUES FROM

SALE OF GOVERNMENT ASSETS

B. Ralston: It's interesting to hear the Minister of Finance reflect upon advertising. Premier Campbell, when he was in power, directed that there be no government advertising four months before the election. Oh, how times have changed on the other side.

Former senior bank economist Don Drummond said when speaking of asset sales: "Do not count chickens before they are hatched. If assets are to be sold, never incorporate any revenue from such planned sales into a budget before the fact." That's in fact exactly what the Minister of Finance has done in crafting his bogus budget.

He's booked over $800 million in asset sales in the coming fiscal year, which could be delayed or blocked for any number of reasons. Why won't the minister simply admit that his budget is, in truth, deeply in deficit?

Hon. M. de Jong: Dare I refer back, again, to records of other performance? The document I have is the budget for '97. What's the line I'm looking at? Oh my, asset dispositions — in fact, to an amount that would exceed $250 million.

The point is this. An operation the size of government, holding the number of assets that it does, sells them from time to time for very sound, appropriate reasons — particularly when they are surplus. Those sales are recorded. They are disclosed so that the public knows what has been sold. In this case we have actually brought that together and disclosed in group in an open and transparent way.

The properties that I talked about yesterday…. The member may think it makes sense to hold on to a property that was purchased in Surrey for a hospital that is now being built elsewhere. We on this side of the House think the private sector deserves to have access to that property to generate jobs and economic activity in British Columbia.

Mr. Speaker: The member has a supplemental.

B. Ralston: The $300 million sale of the Little Mountain housing project land in Vancouver has served a double duty. It served as a line item in two previous budgets, and in November it was moved into this fiscal year, which can signify only one of two things. Either the government is shifting revenue from last year into this year to help balance the so-called bogus budget, or it's proof that their key asset sales take longer than the government ordinarily is prepared to admit and will not result in revenue in the fiscal year that we're talking about.

Will the minister agree that the $800 million budgeted for asset sales means, in fact, the budget is deeply in deficit?

[1420]

Hon. M. de Jong: Not only will I not agree with the member's proposition; I will hasten to point out to him that the budget that was tabled yesterday includes a projected surplus of just below $200 million, a forecast allowance in excess of $200 million, a contingency fund in excess of $200 million. It was based on prudent financial projections at a level that will withstand any reasonable scrutiny.

If the member wonders why I'm having a little bit of difficulty taking his criticisms seriously, it's because when

[ Page 12930 ]

he is asked a direct question — based on all of the available data, based on all of the work that I'm certain the opposition has done over the last number of months — the best answer he can give today to a fundamental question about when he and a government he is part of would balance the budget is: "Maybe in four or five years."

That's not good enough. It's not good enough for British Columbians.

BUDGET REVENUES AND

FINANCIAL REPORTING BY B.C. HYDRO

J. Horgan: Bogus budget 2013 books a net income for B.C. Hydro of $545 million. In his report B.C. Hydro: The Effects of Rate-Regulated Accounting Auditor John Doyle said: "Over the last decade the impact of deferrals has been to consistently increase Hydro's reported net income." He went on to further say: "It creates the appearance of profitability where none actually exists."

When he did that report, the deferral account stood at $2.5 billion. As of the third quarterly report released yesterday, it's now $4.2 billion. We know we have 5,200 gigawatts of energy that we bought at $125 a megawatt hour, and based on the material assumptions in the minister's budget, we can sell it on the spot market for $29.

What conjurer's trick are you using to book $245 million of dividend from B.C. Hydro when clearly none exists?

Hon. M. de Jong: Two aspects to this question. First of all, I have heard, at various times and in various ways, the criticism that relates to the transference of dividends as an artificial means of adjusting upwards the bottom line. I think the member knows that is simply not the case — that that is simply incorrect to say.

I have also heard and read some of the reports that the member refers to around the use of deferral accounts, particularly the need to have a plausible plan in place going forward to retire those deferral accounts. The use of deferral accounts is a longstanding and, I am advised, accepted accounting practice.

I also understand that there is another narrative at play here — an opposition who are looking at the calendar, thinking before the population has even had an opportunity to cast a vote that they are preordained to move to this side of the House.

British Columbians deserve to make a choice based on a complete set of information. They have our information. They have our plan. Let's see what the opposition has to offer.

Mr. Speaker: The member has a supplemental.

J. Horgan: Certainly, the public would prefer to have accurate information to base those judgments on, and clearly, bogus budget doesn't cut it.

Again, a direct question specific to the dividend from B.C. Hydro. How is it possible to increase the debt of B.C. Hydro to well over $14 billion, to go from zero to $4 billion in eight years in deferral accounts and to create the appearance of profitability where none exists? You've got a massive amount of energy you can't give away, and somehow you want us and the people of B.C. to believe that you found $245 million in a dividend.

It makes no sense, Minister. Try and explain it. Use small words, if it'll help you. Go ahead. Give it a try.

[1425]

Hon. M. de Jong: British Columbians understand this. They understand that the B.C. Hydro corporation has served the interests of the province well. They understand that B.C. Hydro has developed generating capacity in this province in a way that not only serves our needs but provides us with the ability to export in a way that benefits all British Columbians.

They also understand that there are debt-to-equity requirements in place that govern the degree to which dividends can be paid out of the corporation. And they also understand this — that in order to make a proper decision next coming May, they need a complete set of information not just from the government but from the group that purports to want to replace the government.

We know where we stand — a balanced budget that has withstood scrutiny from any number of sources. But the opposition, for some perverse and bizarre reason, has their plan locked away in a vault and doesn't want to share it with British Columbians.

BUDGET PROVISIONS FOR

HEALTH CARE SERVICES

M. Farnworth: What the people of British Columbia remember is bogus budget 2009, and now they're really concerned about bogus budget 2013.

In bogus budget 2013 the Liberal government has cut the projected increase in spending on health care by $233 million, a quarter-billion-dollar effective cut to health care. It will mean cancelled surgeries, less innovation, longer wait-lists and more.

Health care costs money, and the impact of this government is going to mean less services for the people of British Columbia — absolutely.

Interjections.

Mr. Speaker: Members.

M. Farnworth: That's been the record. How can the Health Minister defend a budget that will negatively impact the health care of the people of British Columbia?

Hon. M. de Jong: I am actually grateful to my friend

[ Page 12931 ]

the critic for raising the issue, because I think it's an important discussion to have. I think it represents an important point of delineation.

The member, perhaps going back to his days as a former Health Minister, seems to equate health care and a successful health care program purely and exclusively with how much you spend. That is a false analysis, and what proves that is health outcomes here in British Columbia.

We have taken spending that has grown in health care from 6 percent, which everyone acknowledged was unsustainable. I'll bet I can find quotes where the hon. member says that growth at that rate was unsustainable, and we have taken it down. Each time we have, people have said: "You can't do that."

The budget for health care over the next three years goes up $2.4 billion. Now, I'm going to sit down, and I'm going to listen, because I know that my learned friend over there is going to explain to me and convince me how a $2.4 billion increase actually represents a cut.

Mr. Speaker: The member has a supplemental.

M. Farnworth: It's not me he has to try and convince. It's the public that this government burned once before in 2009, when they said: "Oh, don't worry. Our health care budget will meet the challenges of health care in this province." What happened after the election? It was cut in service, cut in service, cut in service to the people of the province of British Columbia.

What this budget fails to acknowledge is realities in health care: the realities of demographic change, the realities of tech change, the realities of just basic inflation, never mind any agreements with nurses — all the cost pressures on this budget.

[1430]

This budget is unrealistic, and this government knows it. How can they table a budget that they know will result, after an election, in cuts, cuts, cuts?

Hon. M. de Jong: I can't say I'm shocked today to learn that the opposition, via the critic, have decided that a $2.4 billion increase in the health care budget is insufficient. I'm not shocked about that. What I guess my question is, is: if not $2.4 billion, then how much — $3 billion, $3.4 billion, $4.4 billion?

We look at the outcomes we have achieved in British Columbia. We look at the innovation that has been put in place. We look at the use we are now making of nurse practitioners, in ways that weren't envisioned just a few years ago. We look at the cost savings that have accrued as a result of smarter procurement around generic drugs.

What the member and his colleagues apparently have convinced themselves to ignore is that the only way to achieve better outcomes for healthy British Columbians is to spend more money.

Mr. Speaker, I'll tell you this. You can continue to advocate growth in the health care budget at some rate that the member refuses to disclose, and it will impact on every other public service that British Columbians expect and deserve.

We say no. We say that you can employ technology, you can employ innovation and you can bring some control to a health care budget and still deliver the best health care in the country.

BUDGET PROVISIONS FOR

SERVICES TO VULNERABLE CHILDREN

C. Trevena: It seems like this government is also saying no to the most vulnerable children as well. We've had two years of flatline budgets for the Ministry of Children and Families.

Last week the Minister of Children and Families accepted all the recommendations from the children's representative report into the tragic case of the tasering of an 11-year-old boy. She said that she would immediately move to open six beds for children with complex special needs and provide other services.

My question is this. If she promised to create six beds and provide those extra services, where exactly is this money going to come from in this bogus flatline budget and what other cuts are going to come in its place?

Hon. S. Cadieux: I'd like to thank the member opposite for raising this. I did immediately accept all of the recommendations in the rep's report, because that was a tragic situation that clearly not one member of this House would accept.

I said that we would move immediately to open six new beds at the Maples Treatment Centre for children with complex behavioural needs, and we're going to do it.

We are moving forward. We've found the money. And do you know why? Because we're redesigning how we deliver residential services for children in our care. We are doing that because there is a better way to do things, and we're doing it within our means. Frankly, without the opportunity to grow the economy and without the opportunity to ensure that our budget is balanced, that we can maintain our credit rating, there is absolutely no way we can invest more money in the services that we all feel are absolutely essential.

BUDGET PROVISIONS FOR

COMMUNITY LIVING SERVICES

N. Simons: Last week I think people in the community living sector were disappointed when the throne speech had no mention of how this government was going to try to repair the credibility gap that they created with CLBC. Then with the budget, that disappointment has turned to shock when we see actual day programs, residential pro-

[ Page 12932 ]

grams and personal support initiatives all being cut over the next three years. If this is the government's response to the crisis in community living, it's shocking.

[1435]

When the Minister of Finance says, "I'm sorry. I can't afford it…." I'd like the minister to tell that to the family watching these ads, these partisan ads repeated over and over, when they are struggling to get by on a day-to-day basis.

This budget beats up on the families of people with developmental disabilities, and that side knows it. When will this government respect the fact that these people need support and stop spending money on useless ad campaigns?

Hon. M. de Jong: It's unfortunate that the member assigns, apparently, such little value to some of the initiatives that were included in the budget. If he thinks back, I think he will acknowledge that I said at the outset that given our commitment to achieve balance in the budget, the new spending was admittedly modest, and certainly modest by pre-election standards in this province dating back some decades.

But to suggest that the funds that are being advanced and allocated to assist families with early childhood learning, daycare, the education skills-training initiatives…. That represents real money that people can put to work on behalf of their children. Apparently, the member dismisses them as being insignificant. I don't. We don't.

As I am learning from correspondence and contact around the province, families are grateful, accept the fact and applaud the fact — applaud the fact — that the government is managing the provincial books in precisely the same way they have to manage their households.

[End of question period.]

Introductions by Members

D. Hayer: I have 55 grade 5 students visiting from Pacific Academy. One part of the class was here earlier. The second class is here right now. They are from Pacific Academy, one of the best schools in Canada, in my riding of Surrey-Tynehead.

They're here to learn about how government works, because some of them might want to run for politics. A couple of them said they want to run for Prime Minister or Premier or an MLA, or one said for mayor.

They're here with their parents, and they are joined by their teachers Rick Bath and Nancy Bakken and 33 parent volunteers who have taken time away from their families to join them here. Would the House please make them very welcome.

K. Corrigan: I rise to present a petition.

Mr. Speaker: Proceed.

Petitions

K. Corrigan: This is a petition sponsored by Better Schools B.C., signed by 173 concerned citizens calling for a comprehensive and accountable child poverty reduction plan.

Reports from Committees

M. McNeil: I have the honour to present the interim report of the Select Standing Committee on Health for the fourth session of the 39th parliament.

I move that the report be taken as read and received.

Motion approved.

M. McNeil: I ask leave of the House to suspend the rules to permit the moving of a motion to adopt the report.

Leave granted.

M. McNeil: I move that the report be adopted, and in doing so, I would like to make some brief comments.

The Select Standing Committee on Health's interim report summarizes the committee's work from June 22, 2011, to October 31, 2012, as it examined the projected impact on our health care system of an aging population. The committee concluded that the demographic trends are only one of the many cost drivers in health care.

On behalf of all the committee members, current and past, I would also like to recognize the work of the former Chair of the committee, the current Minister of Agriculture. Without his dedication, passion and enthusiasm, this report would not have been possible. I would also like to thank the committee members who gave their time to contribute to the production of this report.

M. Farnworth: It's my pleasure to rise and speak to the report and to thank the committee Chair for her remarks, as well as to thank previous Chairs of the committee — the member for Vancouver-Quilchena and the member for Kelowna–Lake Country.

[1440]

It was a very interesting experience. I think the committee found it really useful and very informative. In fact, I think one of the key findings of the report is the impact of the aging of seniors on our health care system of about 1 percent a year.

This is just the first stage. There's a lot more work to be done, and I hope that we are able to do that in the future.

I just want to thank the members of the committee for making such an effort to put out this report.

[ Page 12933 ]

M. McNeil: I move the adoption of the report.

Motion approved.

Tabling Documents

Hon. S. Bond: Mr. Speaker, today I am tabling the Final Report of the 2010 British Columbia Judges Compensation Commission . As members may recall, the assembly first addressed this report in May of 2011 by unanimously endorsing the response brought forward by government. Following a judicial review of that response, I am obliged to table the report again.

Pursuant to the Judicial Compensation Act, I also advise the House that under

section 6(3) of that act, if the assembly does not resolve to reject any of the recommendations contained in the report within the timelines established in the act, then the judges will receive the salaries and benefits recommended in the report. Accordingly, the government intends in the coming days to table in this House its response to the report.

Point of Privilege

(Reservation of Right)

D. Routley: Mr. Speaker, I'd like to rise and reserve my right to raise a matter of privilege.

Mr. Speaker: Okay.

Orders of the Day

Hon. M. de Jong: I call debate on the budget.

Budget Debate

(continued)

B. Ralston: Before I begin, perhaps I can just wait a moment until members have the opportunity to….

Interjection.

Mr. Speaker: Continue, Member.

B. Ralston: I wish to continue my remarks, which I began yesterday, and make some comments about the budget that was presented in the House yesterday.

The Finance Minister makes a claim — certainly, it's on the front cover of the budget — that it's balanced, and I propose to examine that claim in some detail. I expect to come to the conclusion after the analysis that I've done that the budget is not balanced. In fact, it's the fifth consecutive deficit budget that this government has tabled here in this House.

I think it's important to begin with that context because it clearly sets the challenge that the government faces both in terms of making the claim and in terms of the credibility of that claim.

[L. Reid in the chair.]

The projected deficit in the third quarterly report, which was tabled with the budget yesterday — that is the third quarterly report which reports on its projection of the deficit to year-end, March 31, next month — is approximately $1.2 billion. The claim that's being made on the other side is that we have gone from…. We are expected or asked to believe that we've gone from a $1.2 billion deficit to around a $200 million surplus. That is a momentous shift in the finances of the province.

That might have been credible if we were back in the time when we were at the top of the resource supercycle back in 2006 or 2007, when world markets were humming and resource prices were at all-time highs and resource revenue, on which the province still depends very much, was rolling in. Clearly, those economic circumstances have changed, and we're no longer in that position. So it makes it difficult to accept, particularly in the current context.

[1445]

Now, I'll discuss somewhat further the economic situation of the province. There are economists — respected economists such as Jock Finlayson — who've talked about the economic circumstances of the province in recent months. I've attended some of those presentations, and there are some comments that I'll offer arising out of those presentations.

I'd like, first, to begin with the issue of asset sales. The government in its budget last year…. The previous Minister of Finance, who continues to be the member for Surrey-Cloverdale, presented a budget in which he projected in the three-year fiscal plan $475 million in revenue for the fiscal year coming up and slightly over $200 million in the subsequent fiscal year.

In a plan that he talked about on page 53 of last year's budget, he said that he expected the province would net approximately $700 million over the fiscal, planned period on the disposal of a portion of those properties and assets. The fiscal, planned period is a period of three years, and in fact, that number of $700 million appears to have grown. The number now projected for this year is $800 million, including the Little Mountain sale — a movable feast which was previously slated to be counted as revenue in the previous fiscal year and, indeed, in the year before that.

So it's not clear. It's not publicly disclosed why this asset is moved forward. Obviously, these are complex negotiations, but certainly, that maybe had something to do with the relationship between the developer and the province and the sense of when the sale will be recognized. It may have something to do with the rezoning process in Vancouver. I'm not entirely sure, because

[ Page 12934 ]

there's not a great deal of public information on that file.

Nonetheless, the result is that in the last quarterly report the disposition of the proceeds of that sale were moved into this fiscal year. Whether it will result in a sale or not, such that it can be recognized properly in the coming fiscal year, remains to be seen.

At that time, the then Minister of Finance talked about 100 properties, and he disclosed three. The list, he said, was confidential for proprietary reasons. I'm not entirely clear why, although he did say that the list had been disclosed in its entirety to the rating agencies in New York that spring. So approximately a year ago the rating agencies were given the list and some of the, I suppose, likely sale prices or an estimation of sale prices.

What then took place was that the government, out of contingency, allocated $5 million to begin the process of appraising and preparing the properties for sale and, I suppose, commissioning studies of the value of the properties and assessing their suitability for sale. Apparently, that process is ongoing.

What we did then receive in this budget is a further statement of what those properties are. There's a bit more disclosure, although we're far from a list of 100 properties. Apparently, the list continues. Approximately ten properties are styled, in the note on page 43, as on the market or where 2013-14 agreements are in process.

One assumes that for properties that may have been sold, the completion date for the purposes of recognizing the revenue is beyond April 1. It's not clear when the interim agreements were signed. There's not that level of disclosure.

The minister says it's open and transparent, so perhaps that's forthcoming. I haven't seen it yet. No one has provided it to me. No documents have been tabled in the Legislature. No news releases have been issued. So it's not entirely clear what the timing is on those transactions.

[1450]

Certainly, given the wish of the vendor, the province, to have those sales recognized in the fiscal year coming, one can well imagine that that's a completion date that could be pushed forward months for the fiscal convenience of the Minister of Finance's budget. Perhaps that's what was done. I don't know. That will be disclosed when the documents are released, I'm sure.

The other columns. There are about ten properties there that are in that list of "currently on the market" or where 2013-14 agreements are in process. Then there is talk of other properties to be marketed — the Pearson-Dogwood health centre, North Saanich Middle School, a six-hectare vacant lot in the Panorama neighbourhood in Surrey, the parking lot across the street from the Legislature and a seven-acre site north of Kelowna that was tentatively held for the new correctional facility.

That last reference is one of the three properties that was disclosed back in last year's budget. It's being, I suppose, redisclosed or disclosed again or listed again, but apparently, it hasn't moved into the category of a property that's on the market or where there's a 2013-14 agreement in process.

Those are the properties. Relative to what took place and was announced a year ago, there is relatively slow progress, it would be fair to say, given the fact that there has been a year to engage in this process. As part of the budget preparation process, this process began in the fall of 2011 in order to be ready for the budget in February 2012. We're now a year from that date, and we have a disclosure of ten properties and another five that are being considered.

That very timetable illustrates the problem inherent in this process. It's certainly routine for government to acquire property and to sell property. No one is disputing that. But what is unique about this program is its claim that it is going to specifically provide revenue for a 12-month window in the fiscal life of the province that is next budget year. It's one thing for the government to enter that number into the budget. It's quite another thing to realize. Given that we're very close to an election, I suppose there's not a great deal of anxiety about the reality of that or not.

It's notable that the deputy minister and secretary to the Treasury Board, Mr. Milburn, is obliged by the Budget Transparency and Accountability Act to list his qualifications or, I suppose, comments on the budget as a whole. He says this about the sale of surplus corporate assets. That's what he calls it. "Revenue to be realized on the sale of surplus corporate assets is dependent on a successful marketing program, a continuation of current market condition and completed sales."

What he's saying is that it'll work if you sell property, but if they don't, it won't work, which is, I would have thought, a tautology, an obvious fact. But it doesn't really inspire a great deal of confidence, in the sense that his reservation is almost completely qualified and he doesn't hold out any certainty in that statement that the program will be realized.

[1455]

Given the careful and precise choice of language by the deputy minister, that suggests to me that there is some justifiable skepticism at the senior level in the Ministry of Finance as to whether this $800 million marked in the budget can actually be pulled off, so to speak. So that is, I think, an important qualification, given that $800 million is a substantial amount in anyone's fiscal life and, really, almost key to the realization of the alleged balance in the budget.

The other thing that's worth noting is that in the ori-

[ Page 12935 ]

ginal list of real estate assets to be sold, listed by the minister back in 2012 on the note at page 53 in that budget, it's also added that the government "has recently announced its intention to sell the liquor distribution warehousing facilities and associated distribution services to the private sector."

That's in the note. I'm quoting from the budget. Obviously, that sale has been abandoned. From the note and the very sketchy information that has been revealed so far, it's not clear whether some money was allocated in the column for the sale of surplus assets, the $475 million, in the first year or the $230 million in the second year — whether any of that was attributed to the sale of the Liquor Distribution Branch. The budget is silent on that issue.

Given the lack of disclosure in detail about the list of assets…. We only have 15 of the 100 assets now, while we're, if the preparation time is counted, over 15 months into the process — so not the most open and transparent government in the history of British Columbia, despite the claim that's sometimes made.

This issue is important enough and pivotal enough to the budget that, really, I think it's incumbent upon the government to make a fuller disclosure. Don't be shy. Tell us what's going on. But so far, that hasn't happened.

Let me further talk about the Pearson-Dogwood redevelopment project in Vancouver. This is a major piece of property in the city of Vancouver. It's about 25 acres. It's a block and a half or maybe two blocks from the Canada Line station at 49th and Cambie. There are highrise apartments — Langara Gardens, I believe they're called — that have been there for some time. So this is ideally situated for major redevelopment and certainly subject to the zoning process in Vancouver — a potential vast increase in the value of the property.

There is a note in this year's fiscal plan which is interesting. It's somewhat ambiguous. It says: "The 25-acre redevelopment project will potentially result in a complete community that could offer a range of complex care, residential care, supported- and assisted-living options, community amenities, and affordable and market housing." It's not clear whether it's intended to sell this to the private sector and then have these facilities built or not.

One looks to major pension funds like the Canada Pension fund. There's a corporation that manages the investment assets of the Canada Pension Plan. There's also one that manages the $90 billion or so in pension assets here in British Columbia. They invest long term for the future benefit of those who would receive pensions. They invest long term in real estate. Real estate assets — those are part of their portfolio.

One would think that a prudent government, looking to the future cost of health care, might see this strategically located 25-acre site of possible redevelopment in the city of Vancouver….

[1500]

One might think that they might reserve that to the government or an agency of the Crown or a partnership of which the controlling interest was held by the province to redevelop and reap the long-term benefits in the increase in value that would result from an upzoning and a potential stream of income well into the future that could result in long-term funding to assist with some of the costs of government and, particularly, of health care.

That doesn't appear to be the plan here, although again, it's very sketchy. The government doesn't seem to want to provide a lot of detail. That may be because they haven't thought that far ahead. It may be because they have no intention of doing that.

But certainly, the opportunity to take that property, to develop it, to hold it in a real estate trust with its income being for the benefit of the province or the ministry in the long run as a stream of income — much as a pension plan would hold key real estate assets; much as BCIMC, the Investment Management Corporation, does or the Canada Pension Plan does or the Alberta pension plan does….

They invest in real estate properties just like that for the benefit of their pensioners, so it would seem to be a logical and rational future investment decision that the province could make, rather than simply lining up and selling this off. Without a strategy on that, at least to capture the value that would be created by the rezoning, it seems very shortsighted indeed to take the property in that direction.

But there may be those on the government side who will clarify this issue for me. I'm always hopeful. Even after seven years here I'm always hopeful that when I ask a question like that, it will be clarified for me. Sometimes that happens. Most of the time it doesn't. But I'm hopeful that that will happen.

I think the key thing here is that the so-called balance that is spoken of is dependent upon the sale and realized sale in a 12-month span of time of $800 million in real estate assets. That is reasonable. I think it's eminently reasonable to be skeptical about that, and that shows the relatively unstable and unpredictable foundation on which the so-called balanced budget is built. It's certainly something that the public, when I talk to them, really are skeptical about.

We shall see, doubtlessly — perhaps in the time that remains. I don't know. Maybe there'll be government ads that'll be talking about selling government property. I don't know. Maybe that's part of a marketing plan. Maybe they'll tie it in with the television commercials and use market property as well to help to sell the budget — maybe even pay for the ads. I don't know. One could think of some commercial possibilities there that I'm sure are being thought up over there. But we'll see.

Now, I want to leave this topic just on that note — that this is a very shaky foundation. This is not something that withstands a lot of scrutiny. It's a faith-based exercise. It's:

[ Page 12936 ]

"Trust us; believe us." And frankly, without any detail, given that amount of money, most people don't believe this assertion in the budget. For that reason alone, this budget is not balanced.

Interjection.

B. Ralston: Go ahead. Applaud. That would be nice.

I thought that there was applause on the other side there for a moment, Madam Speaker. I know that things are a little rocky inside the caucus over there, but open applause for the Finance critic? That would be unprecedented. But you never know. It's a changing time.

M. Farnworth: The truth shall set them free.

B. Ralston: Yes. Or May 15 will set them free.

Now, I want to talk, also, next about the report of Mr. O'Neill, who was hired to come in and offer an opinion. He did two weeks' worth of work, received a payment, I think, of $25,000, which is a tidy sum for a couple weeks of work, and offered an opinion on revenue.

[1505]

But I think one should be clear about what…. There is an effort by some of those in the government, MLAs, and some in the media, who perhaps didn't read the full report, to characterize this as something that it's not.

First of all, clearly — and he says this up front — it is not an audit. There's an aversion on that side to the results of audits. We know that's why they stepped in and fired the Auditor General. But this is not an audit, so that was apparently an acceptable form of financial examination to them.

He looked at the modelling, or the way in which the standard system, by which it's a computer program, by which results of the budget are modelled in the B.C. economy.

He talked to some of the ministries and their specialized forecasting units — because one can imagine that different resource ministries monitor the expected or actual price of the commodities that they administer, whether it's the Ministry of Natural Resources on gas prices or the secretary of state for mines — and he looked at some assumptions about revenue.

He didn't examine in any detail Crown corporations. The only reference to Crown corporations is in a table on page 15 of the report, where they talk about revenue change from the budget.

But in terms of digging into the sources of revenue or the variables that would affect revenue in, for example, B.C. Hydro, B.C. Lotteries, the Liquor Distribution Branch or — there's one final one — ICBC…. Those big four Crown corporations last year generated over $2.8 billion in revenue. He didn't look at those. That wasn't part of his mandate.

He looked at a fairly conventional array of mainstream indicators of economic growth or not — prices and things like that.

But one thing that he did say, which I was struck by. One always hates to say I told you so, but I have done this, perhaps irritatingly, on the issue of natural gas prices for some time. I'm sure members of the Legislature will want to indulge me on this point.

What was evident in his report…. He said very clearly — I'm quoting from page 19: "On the other hand, prices have been significantly overestimated in each of the last four years and in six of the last nine years." That's the price of natural gas.

Now, I raised this issue with the previous Minister of Finance, the member for Surrey-Cloverdale, back in the spring. Of course, I was roundly thumped and dismissed and told that I was advocating political interference in the revenue estimates of the ministry.

I raised it again with the current Minister of Finance before the Finance and Government Services Committee — the same suggestion that my simple queries from a lowly member of the opposition about the accuracy of these forecasts were somehow really beneath answering. They were an attempt to politically interfere with the good work of people in the Ministry of Finance.

I was pleasantly surprised when this independent economist actually confirmed everything that I'd said, and more besides. So there's doubtlessly some benefit from bringing in the occasional outside expert to assist the minister and lift him from his narrow set of preconceptions about what revenue might be in this sector.

Natural gas is, of course, a notoriously difficult sector in which to predict the price, and it's very volatile. Changes that have been brought about by the fracking technology have revolutionized the natural gas extraction industry around the globe.

[1510]

It is not surprising that in that environment it's difficult to predict the price. That's simply the point that I was trying to make and have finally confirmed, although there was a downgrade of the revenue projections by the Finance Minister in the last quarterly — I think, actually, in the second quarterly — based on the observations that I'd made. That was incorporated into the budget, and quite properly so.

That aside, it's a very conventional analysis and really doesn't, I don't think, add a great deal to the broad consensus on the fairly ordinary measures of the economic activity in the province. It's, I think, an effort to…. With all due respect to Mr. O'Neill, who is certainly the former chief economist with the Bank of Montreal, now retired but consulting — a very respectable, well-regarded, mainstream economist.

The terms of reference that he was given were to focus on some very conventional heads of revenue. He didn't look at expenditure, and it's pretty clear. Apparently, the government's explanation of that was: "Well, expenditure

[ Page 12937 ]

is more or less in the control of the government." How true that is. How true that is.

We've certainly seen some of the evidence of that in the budget, and I'll deal with that later. That's why he didn't deal with that. At least, that was the explanation of the government. This issue of the predictions that are supported by him, I think, is really no surprise.

Now, what the government also goes on to talk about in the budget, and another source of what they claim is another layer of fiscal control or fiscal prudence, is what they call expenditure management. Certainly, there was an imperative created with the collapse of the world economy in 2008, Lehman Brothers in September 2008. Governments around the world were obliged to respond, and the B.C. government was no different.

Premier Campbell went on the television and gave a speech setting out ten points as to the ways in which he was going to deal with the crisis. One of those ten points was the fact that he was going to have a television address and tell people about it. It seemed like he, maybe, was a little short of points, and he had to round it out to ten, but one sometimes understands these necessities in politics.

He and the government did unleash a program of expenditure management. These are all the conventional things that one talks about, that they teach in business school as a matter of course. Focus on reducing unessential travel. Reduce contracts for professional services, reduce accommodation and building charges, and reduce or eliminate discretionary grants.

All of those obvious steps were taken. That's the right thing to do, and that was done. That was, though, in 2009. So the government's claim in the document that's filed and the topic box that's filed with the budgetary papers is that they are continuing to do that.

I commend them for that. I think that's prudent and good public administration. But there is a practical limit to the number of times that one can find those kinds of savings in any budget. So once you've eliminated unnecessary travel, unless you decide to bring it back to better eliminate it again, it's gone as an item, as a topic.

[1515]

If you reduce down your hiring or use of professional services or management consultants, lawyers — professionals who provide services to government on a number of topics…. I know many ministries do engage professionals, and certainly, there are professional services firms that specialize in assisting government on difficult problems.

Sometimes when an extra set of eyes or an additional, more sophisticated approach — or maybe a less sophisticated approach but a different one — is required, those people come in and are hired. But if you grind that number down, after a while you can't do that again.

Similarly, with building charges. I know, for example, that TransLink, which is under some fiscal pressure, is moving its head office and the office of B.C. Transit from its existing headquarters in Burnaby to cheaper headquarters office space in New Westminster — a prudent example of good public administration. They're going to save some money.

But once you've done that and you've signed that new lease which is at a lower rate, you've made that savings. It's built into the budget, and you can't do it again.

Certainly, the same with discretionary grants. If you are in some ministries where there is that choice…. Either the budget is eliminated, or you decline to make any awards of discretionary grants, whether they might be — who knows? — in the ministry of local government, awards to municipalities.

Once you've made the decision not to do that, that's gone. Yet the government claims that they are going to hold spending to a very minimal increase over the next three years, and by that device, they claim that will assist them in reaching their budgetary targets.

So call me skeptical. Call me, perhaps, even unreasonable. I think that the focus on expenses — given simply the rate of inflation, the fact of contract settlements, the need to acquire ongoing equipment — makes those kinds of decisions very difficult to make and to keep within the budget.

I don't dispute the effort, but in my view, the item for expenditure management has been set artificially low, at 1.5 percent, to assist the government in achieving the number that's revealed in the budget. That's largely to assist them with getting over the hurdle of the election with this fiscal picture in mind.

That's the one that they intend…. As we know from the document that was provided to us, I gather from the B.C. Liberal caucus somewhere, the government intends to advertise the budget, to the tune of $4 million, over the next short while.

Perhaps that's something that they'll be trumpeting there, but that's one area that doesn't seem to have experienced the same attention to eliminating unnecessary spending.

This expenditure management, broadly spoken, also is in play — or the same principle is in play — when one looks at the increases in the Health budget. In question period just immediately past the member for Port Coquitlam did raise these very issues about the reality or not of the alleged rate of increase in the Health budget.

Certainly, in the 2012 budget, in the three-year fiscal plan, what was projected was a rate of increase in health spending of 3.2 percent, which has historically been a rate that's difficult to achieve but is, I suppose, one that is well within range in any event. But this year the rate of increase in this budget was reduced to 2.5 percent.

[1520]

As the member for Port Coquitlam, the opposition Health critic, said just moments ago, in order to accommodate reasonable change and the realities of a big ministry like the Ministry of Health, one looks to a number

[ Page 12938 ]

of factors that have to be accommodated and factored into health spending. One is demographic change. That's become a cliché. Everyone recognizes the — although slow-moving, one hopes; at least personally speaking, I do — aging of the population and the increased pressure that brings to health spending.

One also looks to the pace of the change of technology. New medical devices, new equipment, are invented and manufactured, and there is a wish in a contemporary health system to take advantage of those opportunities. That costs money. It costs money to acquire those — say, such as MRIs — but it also requires money to operate them.

In addition, beyond demographic change and technological change, there are changes in the cost of prescription drugs. The government has commendably adopted yet another policy, put forward very vigorously by the Leader of the Opposition when he was Health critic, which is to renegotiate the arrangement for the payment of generic drugs and, in fact, get the same deal that Ontario arrived at independently, which was generic drugs as a lower percentage of the cost of prescription drugs than British Columbia had obtained in its own negotiation.

In fact, that's what was done, and so there is some benefit. That is incremental and by no means explains all of the change, but certainly, that is a cost that's recognized in the health system.

Finally, the cost of hiring the people that do the work in the health sector, whether it's physicians; whether it's hospital workers who keep the hospital and care facilities clean and germ-free in an environment where that's obviously very important when people are ill and their immunity systems are lower; whether it's health professionals — dietitians, nutritionists, radiologists, profusionists — all the group of professionals who deliver services in the hospital; or whether it's nurses and practical nurses who obviously deliver care in the health system, whether in acute care hospitals or long-term hospitals.

The Ministry of Health is particularly intense in its labour costs. That's something that has to be looked at.

Really, when one looks at the budget that's put forward, it's not a question, as the Minister of Finance seemed to want to suggest, that somehow the issue was advocacy of spending more for money's sake alone — more for more's sake alone. That's not what we're advocating.

On the other hand, given the complex needs of the system and the real pressures of the system, it's difficult to conceive in the present environment that at the rate of increase that's budgeted, the services that are available now can continue to be delivered in the same way.

Certainly, there's room for innovation, and some innovations have been made, although I hear in my travels and from the people I discuss with that the level of intermediate management in the health authorities has expanded far beyond what used to take place at the hospital level years ago. I'm not able to objectively evaluate that suggestion. There may be some management savings that could be made there.

Nonetheless, the firm view of people who understand the health system is that the present budget won't accommodate the needs of the system. In an

article in the Vancouver Sun the president of the Nurses Union has said:

[1525]

"With the government's determination to limit the growth of health spending in the upcoming years to even less than the historical lows they forecast in last year's budget" — so there's a reference to reducing even from last year — "there's no improvement in store for seniors or in already underserviced areas such as mental health or home community health care services.

"Instead, the budget will force health authorities to continue to run hospitals at over capacity and push people out more quickly in order to achieve funding that comes from meeting performance targets."

Now, that's certainly one opinion. Obviously, the government is going to disagree. The minister is going to disagree.

That's from a very knowledgeable person who has enjoyed a good working relationship with the government over the last number of years and is by no means a person who is regarded as speaking in an unconsidered or unrealistic way. That's her comment on these health numbers. So one has the view, based on comments like that, that the rate of increase that's been assigned to health care in this budget is a rate that cannot be sustained, is not good for the system and will lead to some of the consequences that she speaks of.

The member for Port Coquitlam, the opposition Health critic, made reference — admittedly fleeting, given the constraints of question period — to what took place in 2009, when a similar budget was tabled, another pre-election budget. There was discussion of cutting. I think it was, in the first year, $125 million from the budget and then in a subsequent year, $250 million, and there were a number of reductions. These are not trivial reductions. These are not so-called efficiencies. These are real programs that were closed or services that were ended.

I have a long list of about 100 or so items, but let me perhaps just read a few of them just so that people who might want to be convinced of the reality of my argument get a little bit of flavour of what took place. This is to illustrate the point that what is proposed in this budget is likely to lead, if it were carried out, to similar results as took place in 2009 after the budget that was tabled then.

Let me begin. Mental health and addictions. They have cut funding for ATLAS youth supported recovery in Terrace, the only residential recovery centre for youth in B.C.'s northwest; cut funding for the award-winning West Coast Alternatives Society, where drug and alcohol programs for adults, youth and children helped 600 residents a year; cut the social work budget in the

[ Page 12939 ]

Fraser Health regional hospital, resulting in a loss of 14 positions; closed the adolescent psychiatric unit at the Abbotsford Hospital; cut funding for 11 residential care beds at Bear Creek Lodge and 11 residential care beds at Newton Regency in Surrey.

They eliminated the only recreational therapist in an eating disorders clinic; cut funding for Burnaby life, a program for adults sufferers of sexual abuse; cut mental health and addiction services at the Capital Mental Health Association in the Victoria area; cut half the staff hours at the Gaumont Residence in Kamloops, specializing in treating mental health and addictions; closed Waddell's Haven Guest Home in Mission, a residential mental health facility also providing addiction services; closed the only withdrawal management program in the Fraser Valley at Chilliwack General Hospital; eliminated psychology services for adult rehabilitation at Royal Inland Hospital in Kamloops; eliminated music therapy, with other staff cuts — including dietician, social worker, counsellor and recreational therapist — at Burnaby Centre for Mental Health and Addictions.

That's one category.

Seniors and residential care. Let me give a few examples. Closed the 36-bed geriatric assessment and rehabilitation unit at Victoria General Hospital; closed the geriatric day hospital in Vancouver; closed the 25-bed convalescent care unit and eight-bed hospice at Queen's Park Care Centre in New Westminster; closed 42 residential care beds at Peace Arch Hospital; and closed Oak Bay Lodge and Mount Tolmie Hospital in the Victoria area.

[1530]

Service for children and infants with special needs. Cut funding to help young children access early intensive behavioural and intervention autism programming at Queen Alexandra Centre for Children's Health; threatened closure of Melissa Park Lodge in Port Coquitlam, a mental health residential facility and child development centre specializing in mental health and addiction services for children and youth.

Surgeries and diagnostic and rehabilitation services. Cancelled 328 knee and hip surgeries for people living in the Interior; cut 360 elective surgeries and 3,000 MRIs on Vancouver Island; cut almost 10,000 MRIs and possibly cutting 6,000 surgeries and closing 25 percent of the operating rooms in the Vancouver health region. Cancelled 35 percent of the elective surgeries in the Fraser Health Authority, adding up to 2,000 surgeries cancelled, and 450 surgeries in the Coastal Health Authority. Eliminated speech-language pathology services in Golden. There's a further list of many more.

Community outreach and support. There's elimination of the outpatient domestic violence program at Vancouver General Hospital. Cut crisis line services in the north Island. Closed the Chimo Achievement Centre, a therapeutic day program for adults with disabilities in Coquitlam and the Tri-Cities, promoting independence, preventing deterioration and enhancing quality of life. Reduced funding and introduced new charges for Meals on Wheels in Nanaimo. Cut 50 percent of the public health dietitians. Cut speech-language pathology services at the Deaf Children's Society of B.C.

Those are only a very few examples of the resulting budget. So when the minister says, "It's not about money; it's about delivering better health care," I think I understand that in a general sense. But there is a consequence to the decision to make that kind of rate of increase. This is a budget that's very comparable to the budget in 2009, and those were the consequences that were forced through.

I think most people would say those don't sound like frills. Those don't sound like unnecessary services. Those, in fact, sound like pretty important services for people with mental illness, with addictions, autistic children, people with behavioural disorders — people who, in a public health system, deserve our support.

I realize, and one realizes, that you can't do everything, and there's not an infinite supply of money, but there is a question of priorities and choices that are being made. This is certainly an illustration of what the consequence might be when one looks at the budget. So the rate of increase, therefore, that's proposed, if it's to be taken seriously, poses a real threat. If it's something that is simply there as a…. This is rather what I suspect. It's something that is there. It's an artificially suppressed number to assist in the alleged balancing of the budget in order to get over the election hump.

It's, I think, very similar to 2009 because the real budget there disclosed the deficit, not of $495 million maximum, in the words of then Premier Gordon Campbell, but $1.9 billion — much, much greater. So that's, I think, what is going on here. That's why the suspicion and cynicism and skepticism that this number attracts. It's just simply not something that the system can operate on, regardless of all the rhetoric about efficiencies and doing more with less and all the other maxims that are trotted out from time to time.

That number that results from reducing the rate of increase from the 2012 projected level to the 2013 level results in a reduction of the rate of increase of $235 million more than the alleged surplus in the bogus budget that we're debating today.

[1535]

That's clearly the purpose of it, and that's the result of it. That's why I've come to that particular conclusion.

I want to deal a little bit more with something else that's health-related, which is MSP premiums. In the budget the MSP premiums are raised 4 percent, yet the commitment of the government was — and this is only the first comment — to raise the MSP premiums by a rate no greater than the increase in the health budget itself. Well, when you budgeted an increase of 2.6 percent, you are obviously at 4 percent, not in sync with that.

[ Page 12940 ]

Maybe what was really meant was that this is a little bit of a vestigial remnant of what the real budget was. They intended a 4 percent increase. They found that they couldn't accommodate that in the fiscal plan in order to achieve the result they wanted, so they suppressed that down to 2.6 percent but still needed the revenue that the 4 percent MSP increase could generate. So they left it in there.

There is that stark contradiction with their own policy. The 4 percent contradicts the 2.6 percent rate of increase in health spending.

MSP premiums have increased, according to our research calculation, 85 percent since 2001. British Columbia is the only province, aside from Quebec, that gathers a premium this way. There are other provinces that have a payroll tax that is paid for by the employer — four other provinces, I believe.

Clearly, the note in the back of the budget says: "Well, that usually means that people are paid less." And in British Columbia, granted, employers do pay MSP premiums for some people. I think it's not quite 50 percent but somewhere around 50 percent.

The argument against the payroll tax is that it's a disincentive to employers to hire people. This increase, if employers pay it, following that logic, is a similar disincentive to employers to hire people, because if they agree to pay their premiums, that's an additional burden on the employer. You can't have it both ways that way.

Medicare, or MSP, premiums now are a substantial revenue source for the B.C. government. It's part of their readjustment of the way in which the fiscal reality of the province — over $2 billion in revenue…. The government has become increasingly dependent upon that revenue as a way of meeting the fiscal challenges.

Just as the government, which campaigned back in 2001 on no increase in gaming, has seen gaming revenue dramatically increase. It's now well over a billion dollars. I think it's $1.1 billion.

Similarly, making any government dependent upon gaming revenue in a big way…. One can't turn one's back on it easily or make a change in direction or a change in policy that would eliminate $1.1 billion in gaming revenue or over $2 billion in MSP premiums.

Notably, there are critiques of the impact of MSP premiums, whether they're from, I suppose, the right, from the Taxpayers Federation…. They regard it as an inefficient way to collect, in effect, a second tax. It has its own separate bureaucracy to collect the tax and has its own administrative costs, which they regard as being inefficient.

When Mr. Bateman presented before the Finance and Government Services Committee, I did ask him, because they advocated eliminating it entirely, whether he could explain how that $2 billion in revenue would be replaced. What he said — this is Mr. Bateman — was that he thought a shift in direction, some signal of a change of policy, was what was required. But he agreed that one could not replace that very easily, certainly not overnight.

[1540]

Similarly, the Canadian Centre for Policy Alternatives has a different analysis about the impact of MSP premiums. Below $30,000, there is some relief of the payment of the full amount of the premiums. But above $30,000 net taxable income, the payer of the premiums pays the same no matter what your income. If it's $35,000 or $105,000, you would pay the same premium as a single adult or depending on your family or whatever. The relief only applies to those below $30,000 net taxable.

It's what economists call a regressive tax in the sense that even if you have a greater ability to pay at a higher income, you don't pay more. You pay the same as someone with a lesser income and a lesser ability to pay. So there are some problems with MSP premiums.

Certainly, this is, I think, the fifth increase in the last…. There's been an increase budgeted every year for a number of years, and this comes on top of previously scheduled increases that were announced in the last budget. So not an entirely satisfactory state of affairs.

When I am having discussions with people — certainly, media questions — that's one of the first things they ask about. It does seem to attract a lot of public opposition — yet another increase in MSP premiums. But it's a marginal increase relative to the $800 million in asset sales when it comes to achieving the fiscal outcome that the government purports to have achieved in the budget.

I do want to talk now about a couple of other areas. The budget talks about what's called an early childhood tax benefit of $55 a month. I think it's important to recognize right at the outset that that would not start, if ever, until April 1 of 2015.

It is, I think, a very belated recognition by the B.C. Liberals that on this file — or in terms of assisting families with burdens and the challenges of raising young children, the fiscal challenges of daycare — they haven't done a very good job. They want to have something that they can talk about going into an election campaign. They haven't found the money for it in the budget, so they've put it off a couple of years.

No doubt, in the ads that we're going to pay for, we'll be hearing about this. And I doubt…. Maybe there will be a small asterisk in the corner on the pixels that says: "Not to start until April 1, 2015." I'm not sure. I rather expect the suggestion or the impression will be left that this is something that's imminent and available to families right now. It's not and may never be.

In any event, it's the subject of some scrutiny by those who follow these issues very closely. What is said is that, even taken as it is in this very belated recognition by government, that's a very slim list of accomplishments in this file. It really doesn't offer very much, given that it's $55 a month for daycare or child care.

That amount, even the yearly amount amassed togeth-

[ Page 12941 ]

er, would in many cases not pay for a single month of child care at the present rates in many communities. So a very belated recognition of a problem, put off into the future — not as far as the natural gas or the LNG future, but similarly, no impact in this budget and no impact before the election at all.

[1545]

The other program that the government has talked about…. I expect this will be bundled together in the advertisements with an effort to use the $4 million in ads that we'll see. I suppose.

I don't know whether they've already started. I haven't had a chance to look at the television lately. But it will be the taking of the program that was created back in 2007. At the top of the resource supercycle there was a surplus. It was put into a fund. Money was put aside — $1,000 when a child was born in B.C — for them, to be paid to them upon becoming an adult.

There's about, I think, $240 million in the fund now. What it's being converted into…. It's a no-cost program for the government. As that child comes of age, reaches age seven, it will be converted to an RESP, and the parents or guardians of the child will have conduct of an RESP, which will be funded to the amount of about $1,200.

There are certain federal tax benefits that flow to that. I think it's a maximum of $200 a year. It would be money that matches it. It's something, but again, doesn't help those who are seeking education now. It's very much in the future, and it's certainly a modest beginning to any RESP. I'm not sure it will be pitched in such modest and simple terms in the government ads that we'll hear beginning now.

I think the government felt a political need around the cabinet table. "We've got to say something on this issue. We've got to do something." These two things are really the best they could come up with, given a relative lack of commitment over the long term to these important issues of early childhood education.

So there you are. I don't think that it's something that has been widely praised, other than by the members opposite, but we'll see how it plays out in the government ads.

Now, there are a couple more topics that I wanted to comment on. It's not clear from the reductions in the budget that are scheduled for the Ministry of Natural Resources how that will impact the permitting backlog. Certainly, that was a case where you had, I think, a relatively counterintuitive proposition where members of the business community were coming forward and urging the government to hire more government employees to get on with the permitting process.

This was a mess totally created by the B.C. Liberals, completely mismanaged, and drew the ire of the mining community. Such was the ire that the government felt compelled to spend, I think, an additional $24 million to clean up their own mess and begin to unlock the backlog of permits.

A member on the Finance Committee heard from someone in Fort St. John who said that to get a permit to extract gravel — a relatively straightforward permit, he advised us — it was taking a minimum of nine months and sometimes up to a year. That's a relatively simple permit in the scheme of things, relative to some of the more complicated permits, such as notices of work, that are required to operate mines.

At the Smithers meeting of the Finance and Government Services Committee, Byng Giraud — the member for Shuswap will be acquainted with him; he's the representative of Imperial Metals Corp., which is a mining company that operates a number of mines here in British Columbia and is developing the Red Chris project up on Highway 37 — offered some advice to the government about continuing to clear this regulatory backlog.

[1550]

So it's with some real apprehension…. I'm not sure what the government is telling people like Mr. Giraud — given the reduction in the budget of that ministry, what is being said to people like that — and whether this program, which did begin to make some headway in the backlog, is going to be continued. It was an extraordinary expenditure that was required, and whether it's going to continue or not is clear.

I'm quoting from his slides that he presented on October 16, 2012, at Smithers. He's very balanced, so I want to convey that. He's not conveying this as a political partisan, at least in this context. I'm reading from his slides.

He appreciates the government's commitment to reducing the permit backlog. He also appreciates the opposition's attention to the issue. He goes on to say in the slides: "Some work has been done, but do not assume more people means better services. Quality and qualification of those people are more important. Permits are of importance to exploration and operations, but developers have unique needs. The entire process is still very long. Red Chris entered the EA" — that's the environmental assessment — "for the second time in 2002 and began construction in 2012."

That's ten years to get that project through the process. One can well imagine it would be different if there was a pro-business government sitting on the other side. It would have gone much more quickly, but that's what it took with the present government in power.

I go on quoting from the slides: "Seen too many places where delays can occur. Need empowered government project managers. Too much turnover, even within government."

He's saying it from the perspective of his industry. He's not giving it the political spin that I'm perhaps adding to it, so I don't want to misrepresent him. But there is a real concern, given the importance — and we acknowledge it; I'm sure the government likes to talk about it —

[ Page 12942 ]

that this process, getting through the permitting process properly….

He's not advocating anything improper or any regulations be changed. He's just saying: "Give us the specialized, capable people who know how to make the decision, can evaluate the project, can evaluate the application and can get it through." The budget is not there to do that.

I suppose, perhaps, the minister, when he stands up, will be able to help me with that issue. I'm not sure that that's in the budget, given that the budget itself — actually, it's not a question of a reduced rate of increase that the budget — for that ministry has actually been reduced.

I want to comment a little bit further about another aspect of the budget that, just coincidentally, helps in reducing expenditure in this fiscal year, and rather than move it forward a couple years or out to LNG-like distances off in the future, it actually moves expenditure backwards into the previous year. That's the issue of the minister responsible for local government — grants to municipalities. The grants for three years were bundled up.

I'm just going to quote from the minister in the House. My extract here doesn't give the date, but I understand this was in estimates debate. "There are no cuts in the future to local governments. The amount…they would have received over the course of the next three years will still be the amount…they would receive over the next three years. How it's being structured, in terms of it being advanced, is what we're talking about today."

What happened was the grants were allocated to the last fiscal year, rather than being allocated forward into subsequent fiscal years and divided up. Apparently, the jargon term for that is "re-profiling." It has the benefit, in my view — I would be interested to hear what the Auditor General has to say about it — of suppressing expenditure in the current fiscal year or the year coming up and putting that expenditure in a previous year.

[1555]

Since the political focus of this whole exercise is the year that we're about to enter, to create this impression of a balanced budget, it's very helpful in not having to spend that money or have it allocated in the fiscal year that's under scrutiny and have it take place in a previous year. So that was probably recognition by the government and the Finance Ministry that there might be a problem in achieving a so-called balanced budget in the fiscal year that's coming up. As a result, that manoeuvre was undertaken.

In my view, it's noteworthy, because it similarly creates a false impression about the state of the books and, certainly, this budget and adds to another level of devices that don't speak of the fiscal reality of the province.

I want to talk briefly a little bit about the report, because my colleague the opposition Energy critic has spoken of the report of Mr. Doyle, the Auditor General — The Effects of Rate-Regulated Accounting . He did quote some of that in question period just past.

I think it's important, because I know that in utility accounting there is a legitimate use of rate-regulated accounting to spread capital costs that should not be borne by the ratepayers in one year over a number of years. That's totally legitimate.

The Auditor General, in his report, recognized that there is, indeed, a legitimate use of rate-regulated accounting, but what he objected to in his report was the degree to which that was accelerating and, in his view, not consistent. He says:

"Financial management and public financial reporting have significantly different purposes. The purpose of public reporting is to serve the interests of transparency and public accountability by describing objectively the results of financial management by using an agreed-upon reporting framework.

"In our view, rate-regulated accounting as it is being practised is not consistent with this objective. Not only does rate-regulated accounting obscure financial management decisions that have been made; it allows management, sanctioned by the regulator, to determine how results will be publicly reported rather than following objective standards of presentation."

He goes on to talk about their return on equity:

"For example, to achieve its target return on equity, B.C. Hydro needs revenues to exceed expenses by a certain amount each year. For the March 31, 2010, fiscal year the return on equity of 13 percent assumed that budgeted revenues would exceed budgeted expenses, creating net income of $402 million. However, at the end of the year actual expenses exceeded actual revenues, creating a loss of $249 million before deferrals. To achieve the target return on equity, $696 million in expenses were deferred."

His concern is that the company appears to be working backwards. In order to achieve the return of equity, they decide how much to defer rather than make an objective decision about what to defer legitimately.

He goes on to say:

"This resulted in a final net income of $447 million and a return on equity that was close to the desired target.

"Expenses that would ordinarily be counted in calculating net income have been deferred to future years, allowed under rate-regulated accounting. While this practice is currently acceptable under Canadian generally accepted accounting standards, it creates the appearance of profitability where none actually exists."

That is his long-term concern.

The conclusion of the report was that he asked the Crown, the corporation, B.C. Hydro, to prepare a response as to how it will recover the net deferred costs in its regulatory accounts. So far, there's one follow-up response to that report. It hasn't met that.

So when it's raised by the Energy critic on our side, the point is simply the one that Mr. Doyle makes. While it's a technique that's used, it's concealing the financial reality of a very important Crown corporation, creating the illusion of profitability where none exists.

[1600]

There ought to be a plan to recover those in the long run — now $4.2 billion in deferral accounts — and there isn't one. Hence the concern, and hence the concern about the growing financial pressure on B.C. Hydro and on its finances.

That's the point that has been made, and that is some-

[ Page 12943 ]

thing that plays into the deficit that actually exists — or the purported surplus, which doesn't in fact exist, because part of that is a dividend from B.C. Hydro which, in the way in which Mr. Doyle expresses it, is illusory and misleading in the long run.

For the future health of B.C. Hydro, that problem has to be resolved. He's given a number of alternatives when he appeared before the Public Accounts Committee, which I chair. So far, I haven't heard that the government has taken any of them up.

I do want to talk about general economic trends in the province, because I did attend a lecture from Mr. Finlayson, who's the executive vice-president and chief policy officer of the Business Council of B.C. He did make some observations about the state of the B.C. economy which I think have to be borne in mind and are worth commenting on.

I'm quoting from his slides, and these are the headlines of his slides. This was presented on January 23, 2013, on behalf of the Business Council, to Pinton Forrest and Madden. They're an executive search firm. Apparently, they do some work in Victoria recruiting. I think they've done 100 successful searches, they said, in the Victoria area alone, and they have a much bigger business over on the Mainland.

What he does say — and I'm quoting from his slides: "Looking at the B.C. economy, job growth stalled in the second half of 2012." So contrary to what we heard from the Minister of Jobs and Tourism and industry about the success of the jobs plan, the chief policy officer at the Business Council of B.C. notes that job growth stalled. He doesn't say anything directly on that because he's not engaged in a political exercise there, but it's reasonable to draw the conclusion that the jobs plan was a failure, based on the comment of Mr. Finlayson that job growth stalled in the second half of 2012.

In fact, in the post-recession job gains are concentrated in the Metro Vancouver area, and the increase in jobs in the rest of British Columbia is at a much lower rate. It's basically only slightly above the 2007 level,

whereas in Metro Vancouver it's increased much more dramatically.

He notes: "Going forward, residential construction is flat, although non-residential construction is doing very well indeed." I think that's a good thing and a comfort to those of us who watch the B.C. economy closely. He says that consumer spending was soft in 2012. In fact, growth in the last month, October 2012, was negative in terms of retail sales and the percentage of change.

I think there is good news coming. The Central 1 Credit Union said that with the return of the PST, they expect retail sales generally will increase. They're expecting an uptick in that, so that's good news.

He talked about B.C. exports to the Pacific Rim are now equal to the United States. That is, I think, an accomplishment that the shift in the market for B.C. resources, most notably coal…. There are certainly some comments on that, but coal exports have dramatically increased.

[1605]

What he also says on the following slide is that contrary to what we heard on the other side, lumber exports to China were down in 2012. In fact, the growth in B.C. lumber exports to China last year was negative. While there was some impressive growth in '09, '10 and '11, with the slight downturn in the Chinese economy, that has turned negative, unfortunately.

He also says — and the word is underlined: "Net interprovincial migration has turned negative." That's a measure of the number of people…. This was very prominent in the rhetoric of some of the people on the other side years ago. They don't seem to want to make the same claim now. But unfortunately, for British Columbia the net migration has turned negative.

There are three indices. There are births and deaths within the province, there's international immigration, and there's interprovincial migration, and in the last two years it's been negative in British Columbia. More people are leaving British Columbia to go to other provinces than are coming here, and that's been a worrying trend.

The other thing that he noticed, and this is something I wasn't aware of, is that more immigrants are now drawn to Alberta than they are to British Columbia. No doubt, that's a function of the relative health of the Alberta economy and probably the fact that Calgary, in particular, is becoming a more cosmopolitan city, as probably symbolized by its new mayor. But that's a worrisome trend in that sense — that immigrants are now bypassing British Columbia and heading to Alberta.

[D. Black in the chair.]

He notes, also, that overall B.C. population growth has fallen. It's now 1 percent,

whereas it was as high as 1.5 percent annual growth as recently as '08, '09 and '10, so it seems to be heading downward. He does have a catalogue of strengths and weakness which I think is helpful when we look forward to the future.

He says the positive story…. He talks about wood products; energy, particularly LNG; transportation and logistics; all parts of the non-residential construction industry; engineering, scientific, technological and environmental services; mining, particularly if the global economy strengthens. A less favourable outlook: tourism; film and TV production; relatively labour-intensive components of manufacturing; printing, publishing, newspaper manufacturing; residential construction; and real estate.

I think that's a pretty fair

summary of where we're at. He has some conclusions and a

summary, which I won't read, which basically confirm that outlook. So there are real strengths in the B.C. economy, and there are areas of concern that Mr. Finlayson has pointed out.

I want to conclude by talking a little bit about some

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I'm drawing from a B.C. Technology Industry Association report. This sector employs about 84,000 people, twice as many as are employed in forestry, and has more workers across the province than all of the resource industries combined. Now, because it's relatively disparate and in different subsectors of that sector, it doesn't perhaps get the attention. In the budget there was not very much mention of this.

Certainly, in its advertising and in its jobs plan the government only very belatedly talked about the high-tech sector and, really, chose to focus on what is understandably still the focus of much of a policy of the B.C. government, which is the natural resource sector. But this is a sector that has a huge potential, that employs a lot of people and that could be even bigger and more important in the B.C. economy.

[1610]

Its gross domestic product is over $9 billion, with revenues over $18 billion. It's ranked fourth among provinces in GDP revenue and business counts. B.C. has the third-largest clean energy sector in the world behind California and Germany. B.C. has more than 600 digital media companies which employ about 16,000 people. B.C. is also a global video games hub with over 85 development studios. These are good jobs. Generally, the average wage in this sector is higher than the B.C. average wage.

It's geographically dispersed. It isn't just in metropolitan Vancouver; there's Thompson-Okanagan. In Kelowna there's a business accelerator which focuses to some extent on the high-tech sector. It's also, certainly, on the Island and in the Kootenays as well. It's a growing sector, but it's underperforming in some ways because, perhaps, it hasn't met some of the challenges.

Some of those challenges are…. I just want to talk about those. Improving access to capital. Certainly, this is an effort where the government has taken some steps. But now, I think, most notably in 2003…. That's some time ago — the angel investor credit. That has not been reviewed, refreshed or renewed.

In venture capital, the Renaissance Fund has been focused…. The way in which it was restructured permitted those operating the Renaissance Fund to invest in companies outside of British Columbia — which, for developing access to capital for B.C. companies, is a little counterintuitive.

There is a need to expand the talent base. The labour study reports shortages in labour supply in the tech sector, a need to expand access to customers. Small tech firms typically lack the scale and capability to successfully access foreign markets and customers abroad.

Building company capacity. This is the capacity at the managerial level to take companies from startup, from small companies, and make them into bigger companies. Only 3.5 percent of all B.C. tech companies have more than 50 employees. The vast majority of firms are startups employing fewer than four people.

It's spoken of sometimes in a generic sense in discussions I've had with various people in the sector that there's no middle class. There are the competitive high-growth firms, which can grow into being major firms. There's that missing…. There are a lot of very small startup firms, and there are a few very big firms, but in the middle there's a gap.

That's, I think, something that should be a focus of government policy. It's not really something that's in the budget at all. Certainly, in the throne speech it's completely absent. Everything has been bet on an LNG future which may not come to pass.

Certainly, on this side, we have supported a future LNG sector and made that very clear. But the ultimate decision will be made by the companies involved. And there's an

article today in the Globe and Mail pointing out that no individual company has yet reached the stage where they have secured the necessary long-term contract of 20 or 25 years to supply LNG to an offshore customer. That's required before the huge capital investment that's required to build a plant can be made.

Those decisions are at least a couple of years out, notwithstanding. That's not a decision that the government can particularly influence, although there is a sense from the representative of the Canadian Association of Petroleum Producers, speaking today, that some of the discussions that have been mooted about an export tax have now entered the discussion with LNG companies and been factored into their decision. And I'm not sure that's something that has been helpful. That certainly seems to be the view of the industry.

The report that was spoken of was commissioned by, I think, Ernst and Young. I have not yet…. The Premier spoke of it last week, but I don't believe it has been released publicly. It's difficult to make an evaluation, sitting from the opposition side, when the government has a report that they've commissioned, paid for by public money, but are not prepared to share with the public. Perhaps that'll be provided to me. I hope so. I am concerned.

[1615]

To conclude, then, in summing up this budget, it's a budget based on very dubious assumptions. Its claim to be a balanced budget is not correct. It's false. It's a bogus budget, and that's a reason why we on this side of the House will be voting against this budget when the time comes.

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Hon. R. Coleman: I appreciate my opportunity to enter into the debate. I have some comments that I will touch on through my speech with regard to some of the comments from the member for Surrey-Whalley. But I w