British Columbia Committee Hansard (Blues) — Monday, March 12, 2018 p.m. — Number 101 (HTML) (41st Parliament, 3rd Session)
20180312pm-CommitteeA-Blues
British Columbia — Debates (Hansard)
Third Session, 41st Parliament
(2018) OFFICIAL REPORT
OF DEBATES
(HANSARD)
Monday, March 12, 2018
Afternoon Sitting
Issue No. 101
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
CONTENTS
Routine Business
Speaker’s Statement
Commonwealth Day
Introductions by Members
Statements (Standing Order 25B)
Nowruz celebrations
B. Ma
Foster parents
L. Throness
Dolores Huerta
R. Chouhan
Kitamaat Open Basketball Tournament
E. Ross
Social workers
M. Dean
Beekeeping
M. Morris
Oral Questions
Carbon tax and gas prices
J. Johal
Hon. G. Heyman
P. Milobar
Real estate speculation tax
A. Weaver
Hon. C. James
J. Thornthwaite
L. Throness
S. Bond
T. Redies
Impact of employer health tax on businesses
J. Isaacs
Hon. C. James
J. Martin
Tabling Documents
Elections B.C., report of the Chief Electoral Officer, provincial general
election, May 9, 2017
Petitions
A. Olsen
Orders of the Day
Committee of the Whole House
Bill 8 — Supply Act (No. 1), 2018
Hon. C. James
S. Bond
Report and Third Reading of Bills
Bill 8 — Supply Act (No. 1), 2018
Second Reading of Bills
Bill 7 — Miscellaneous Statutes Amendment Act, 2018
Hon. D. Eby
M. Lee
A. Weaver
Hon. D. Eby
Committee of the Whole House
Bill 2 — Budget Measures Implementation Act, 2018 (continued)
Hon. C. James
S. Bond
T. Redies
M. de Jong
A. Weaver
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Education (continued)
T. Stone
Hon. R. Fleming
R. Sultan
J. Isaacs
S. Furstenau
L. Larson
D. Barnett
J. Thornthwaite
D. Davies
MONDAY, MARCH 12, 2018
The House met at 1:34 p.m.
[Mr. Speaker in the chair.]
Routine Business
Speaker’s Statement
COMMONWEALTH DAY
Mr. Speaker: Hon. Members, as you know, today is Commonwealth Day. In honour of
this day, you will find on your desk the Commonwealth Day message from
Her Majesty the Queen, Head of the Commonwealth, on this year’s theme,
“Towards a common future.”
[1:35 p.m.]
In addition, the Royal Union flag, also known as the Union Jack,
is being flown on the precinct today from sunrise to sunset.
Introductions by Members
J. Isaacs: In the House today, we have three members joining us from the Pacific
Hepatitis C Network. Deb Schmitz, administrator, Daryl Luster, president,
and Dr. Alnoor Ramji are meeting with members from both sides of the House
today to discuss important work that they do in British Columbia. Founded in
2007, the Pacific Hepatitis C Network works with stakeholders throughout
B.C. to get the best possible care and treatment for the nearly 80,000
British Columbians living with chronic hepatitis C. Would the House please
help make them feel welcome.
Hon. M. Mark: I’m pleased to introduce our House guests for Technology Skills
Appreciation Week. Technologists and technicians work across all major
sectors in B.C.’s economy. These sectors range from everything from forestry
and food through to clean tech, transportation and energy.
I’d like to welcome from the Applied Science Technologists and
Technicians of B.C. Association, Mr. John Leech, the CEO; M.J. Whitemarsh,
the manager for strategic partnerships and Technology Education and Careers
Council board member; and Tina Bos, the Vancouver Island community
representative.
The work of technologists and technicians has a huge impact on the
lives of British Columbians. These highly skilled professionals may often
work behind the scenes, but their contributions to technology in applied
science and research and development are greatly valued. This week is an
important opportunity to celebrate the important contributions that they
make to our quality of life, our environment and our economy. Would the
House please join me in welcoming our guests.
R. Kahlon: I’d like the House to join me in introducing and welcoming Jason Beck,
who is here with the B.C. Sports Hall of Fame. Jason has brought some sports
memorabilia from some of our Paralympic athletes, and he’s showcasing it
downstairs here in the Legislature. He is joined here today with his wife,
Nicole. They’re going to watch question period. I think they’re here
somewhere. May the House please join me in welcoming them.
M. Stilwell: I would like to welcome my friend and fellow athlete Darla Montgomery
to the House today. She’s a farm girl at heart, growing up in the plains of
Calgary before discovering her athletic talent, first in gymnastics and then
in that crazy sport of skeleton, sliding her way onto the Canadian national
team. That sport came to an abrupt end after sustaining a brain injury.
Since then, Darla has utilized her knowledge and her experience to raise
awareness, advocating for change in the sport, and has rebuilt her life here
in Victoria with her husband, Jon, and their 18-month-old son, Jaxon. Would
the House please make them feel very welcome.
Hon. K. Conroy: Today is the start of Social Work Week in British Columbia, an
opportunity to recognize and thank social workers in our province for all
they do to make a difference for children and families.
I am very pleased today to have with us a wonderful group of social
workers joining us in the House. They are representative of MCFD offices and
delegated Aboriginal agency offices from right across the province and will
also be joining me in my office right after question period for a
celebratory tea, where I will get a chance to actually say thank you to them
in person for all the good work they do on all of our behalves. They are
accompanied today by the provincial director of child welfare, Cory
Heavener, and ADM Teresa Dobmeier. Please join me in making them
welcome.
[1:40 p.m.]
I’m going to say their names: Joan Seymour, Charlene Harasymchuk,
Stevie Anatole, Jillian Henry, Sandra Wilson, Jennifer Kayzer, Patricia
Griffin, Cristina Bonilla, Teri Goodrick, Briann Delfs, Amanda Gates, Gwen
Bellamy, Jamie Peck, Sarah Udy, Aaron Leslie, Raylene Bryce, Claudia Hui,
Erin Stellingwerff, Tina Francis, Melanie Voth, Bonnie Avey, Cheryl Haywood,
Romy De Kok, Vindy Dosanjh, Carey McDonald, Ally Henrikson, Sarah Gallagher,
Charlene Dumalski, Robyn Fidanza and Selina Fisher.
I saved one for last. Kristin Brattebo is actually from my
constituency. She grew in up Castlegar, just up the street from my mom and
dad, and went to school with my kids. It’s a real great opportunity for me
to welcome someone from my constituency, as well as all of you amazing
social workers in the gallery.
Please join me in making them welcome.
L. Reid: I’d ask the House to join me today in welcoming someone who’s
world-renowned for his philanthropy. Howard Blank is with us. He has done
countless fundraisings with many, many non-profits across British Columbia,
probably thousands by now, in terms of uplifting their bottom line. He
continues to do very good work in our province. He’s joined by Tom Bell. I’d
ask the House to please make them very welcome.
Hon. B. Ralston: Joining us in the members’ gallery this afternoon are members of the
Consular Corps of British Columbia. The Consular Corps, based mainly in
Vancouver, is the official body representing all consular officers resident
in the province, representing 86 countries and three international
organizations. They are here today to participate in briefings by the
government.
Today we have representatives from 40 different countries and
international organizations. I would particularly like to recognize the dean
of the Consular Corps and the consul general of Portugal, Ms. Maria João
Boavida Urbano. Would the House please extend a warm welcome to all members
of the Consular Corps present today.
A. Olsen: It’s my pleasure today to introduce Jim and Wendy Abram from Quadra
Island. They sponsored a petition that I’ll be introducing after question
period today. I served alongside Jim when I was a Central Saanich councillor
and he was a regional district director. I know him to be a very passionate
individual. It’s my pleasure to introduce him today. Could the members of
this House please make him feel welcome.
M. Dean: It really is a true honour for me to be here today and to introduce my
team from my constituency office. They go above and beyond. Please welcome
Lawrence Herzog, Andrew Barrett and Leslie Mahoney, and also my assistants,
who are in the precinct, Kim Manson and Solenn Madevon. I’m extremely
grateful for all of their work. Would everyone please make them very
welcome.
Hon. L. Beare: I’d like to acknowledge two special guests today who are taking time
out of their spring break to come join us for question period. Emilio and
Mateo Carreras are two students from my riding of Maple Ridge–Pitt Meadows.
Mateo is a 17-year-old math genius and a competitive swimmer, and Emilio is
a 13-year-old computer prodigy and, probably self-proclaimed, gaming expert.
They are joined by their mother, Korleen Carreras, who’s my executive
assistant and who is an absolute invaluable member of my team.
Not only are these two young men my constituents, but they’re good
friends, and I’m glad they’re joining us. Please help me make them feel
welcome.
Hon. C. Trevena: I also would like to add my welcome to Wendy and Jim Abram, neighbours
on Quadra. I know Jim is here to have a petition presented, on his behalf,
about B.C. Ferries. Jim is also my regional director. I’m his
representative; he’s my regional director. Wendy is a very, I’d say,
long-suffering and passionate supporter. I hope the House will make the two
of them very welcome.
Hon. A. Dix: I want to join my colleague across the way in welcoming Deb Schmitz,
Daryl Luster and Dr. Alnoor Ramji from the Pacific Hep C Network. The
network started in 2007, and if one considers the extraordinary changes that
have happened in the treatment of people dealing with hepatitis C since that
time, it’s a real tribute to their work. I know that members all across the
House would want to express their appreciation.
Just as a small teaser, because it’s Monday, we’ll be making a little
bit of an announcement tomorrow about supports for people with hepatitis C.
I know it reflects very much the work that this group has been
doing.
[1:45 p.m.]
G. Kyllo: I see that we’re joined today by our legislative pastor, Jason
Goertzen, who advises us and provides inspiration on all things godly. To
his right, not a stranger to this House, is Lynn Klein.
Lynn, in all that white, you almost look angelic sitting up there
today. I’m very glad to see you here. I know that your attendance in this
House is probably better than some of us. It is good to see you here
again.
Will the House please make them both feel very welcome.
Statements
(Standing Order 25B)
NOWRUZ CELEBRATIONS
B. Ma: March 21, 2018, marks the day of Nowruz. In the Persian language,
Nowruz literally translates to “new day.” I’m sure it’s of no surprise
to anyone that Nowruz marks the first day of the first month of the
Iranian calendar. Although Nowruz is commonly referred to as the Persian
new year, and it does have Iranian origins, Nowruz is celebrated by
people from many different communities around the world.
Nowruz is a remnant of the very first years when human
civilization took shape. It removes the religious, cultural, lingual and
national boundaries and connects the hearts of millions of people who
want to take
part in a unique and unparalleled ceremony marking not only
the beginning of a new year but the end of a harsh winter and the
arrival of the delightful spring. It’s a source of honour for Iranians
who observe and celebrate it and an opportunity for the congregation and
solidarity of all the peace-loving nations around the world.
Haft sin is a traditional custom for Nowruz. While each
haft sin might contain different elements and be decorated
differently, some of the common items you’ll see on the haft
sin are an apple for health; grass for the rebirth of nature;
seed buckthorn for wisdom and regeneration; vinegar for old age and
satisfaction; samanu , a germinated wheat paste, a symbol for
power and bravery; sumac for patience and tolerance; garlic for health
and contentment; coins for wealth. Also, it’s very common to see a
mirror, fish, candles and books. You’ll be able to observe a haft
sin up front very soon, with one being displayed right here in
the public area of the Legislature on Wednesday.
هر روزتان نوروز، نوروزتان
پیروز
[Persian text provided by B. Ma.]
May every day be a new day for you, and may every new day bring
you prosperity and success.
FOSTER PARENTS
L. Throness: On Friday, I spent an enjoyable hour with 15 foster parents in
Chilliwack. It wasn’t a special meeting called for that purpose. It was
their regular meeting — a group of positive, close-knit friends
gathering to share a meal and receive training, encouragement and advice
from veterans in the field.
They described their lives to me. Foster parents live in a
fishbowl, always under critical scrutiny by family and friends,
community, government and the press, especially if anything goes wrong.
Yet they are, by nature, people who are giving, sacrificing a lot to
open their homes to other people’s children.
There is disruption to family life and a risk to their own kids.
There are behavioural issues to deal with and extra costs of sports,
lessons and school supplies not covered by government support payments.
There’s the extra time spent not only with foster children but with
teachers, with government staff and with courts. Through it all, they
need to be the mature ones, the unflappable parents to which our society
turns to care for children experiencing the greatest crises of their
lives.
Foster parents worry about the future. Their numbers are rapidly
diminishing, and they told me that the average age of the foster parent
is 54. In Chilliwack, four information sessions were recently held,
attended by 60 interested couples, but only one applied to be a foster
parent.
This House needs to pay attention to their future. The well-being
of 7,000 children in government care depends on the health of the foster
home.
With all the scrutiny, disruptions to family life and financial
burdens, I asked them: “Why do you still do it, some for decades?” “It’s
because we love it,” they said unanimously. “We fall in love with our
foster children. We have powerful feelings of fulfilment and
reward.”
Foster parents need to know that we in this House appreciate their
indispensable contribution to family life across this province. We are
committed to their success.
[1:50 p.m.]
DOLORES HUERTA
R. Chouhan: Three weeks ago, on February 18, I had the honour to speak after a
film called Dolores , which was shown at the Kwantlen University
Documentary Film Festival in Vancouver.
Dolores Huerta is an American labour leader and civil rights
activist who was the co-founder of the National Farm Workers
Association, which later became the United Farm Workers. She helped
organize the Delano grape strike in 1965 in California and was the lead
negotiator in the workers contract that was negotiated after the
strike.
I first met Dolores in 1981 at Cesar Chavez’s house in Delano when
I was organizing farmworkers here in British Columbia. As an advocate
for farmworkers rights, Dolores has been arrested 22 times for
participating in non-violent civil disobedience activities and strikes.
She has received numerous awards for her community service and advocacy
for workers, immigrants and women’s rights.
She was inducted into the National Women’s Hall of Fame in 1993,
the first Latina inductee. Dolores is the originator of the phrase
“Si, se puede.” This phrase was adopted by President Barack
Obama when he said: “Yes, we can.” She championed for women’s rights and
empowerment in feminist campaigns during her time of union work. She
championed for ethnic diversity in her campaigns.
At age 87, she remains active in progressive causes and serves on
the boards of People For the American Way, Consumer Federation of
California and Feminist Majority Foundation. Dolores was an honorary
co-chair of the Women’s March on Washington on January 21, 2017, the day
after the inauguration of Donald Trump as President. Viva la
causa.
KITAMAAT OPEN BASKETBALL TOURNAMENT
E. Ross: Fourteen years ago Joe Ianarelli wanted to start an annual
basketball tournament in Kitamaat for First Nations but wasn’t quite
sure how to do it. So Joe reached out to me and fellow Haislas for help.
After much discussion, we agreed to be the founders of the Kitamaat
Basketball Tournament that would take place in Kitamaat Village and
Kitimat townsite.
It was a partnership of sorts, but we also wanted to include all
players from all over, not just First Nations. The interest was
immediate, including corporate sponsorship and players with all levels
of skill who travelled to Kitamaat for three days of
basketball.
My team competed for the first couple of years, but as word spread
of the guaranteed prize money, my team quickly sank to the
battle-of-the-basement rounds. But it didn’t matter. The event was so
well organized and so much fun, it was great just to be able to
participate.
As those first few establishment years passed, I excluded myself
from it fully, and very capable, enthusiastic volunteers from Kitamaat
Village and the district of Kitimat built it into what Joe Ianarelli
envisioned in the first place — a basketball tournament that encourages
all walks of life to come together in a basketball tournament that
promotes cultural warming.
Joe passed away on December 13, 2009, and left his mark in many
ways. His idea of a cultural-warming basketball tournament is still one
that I’m reminded of annually in the first week of April in Kitamaat
Village and the district of Kitimat.
SOCIAL WORKERS
M. Dean: “If it hadn’t been for Andy, my social worker, sticking up for me
and making sure I got help with my football training, I wouldn’t be here
today.” That’s just one of the stories that I’ve heard over the years
from young people who have come to the attention of social
workers.
This is Social Work Week in B.C., March 11 to 17, a fitting time
to thank social workers for all they do. We have high standards and
expectations of our thousands of social workers who listen, support,
comfort, collaborate and solve a myriad of problems on the
fly.
We’ve come a long way from the roots of social work, being the
relief of the poor, to a modern, professional service with a code of
ethics and conduct. Social workers hold a range of responsibilities and
work across disciplines. The profession attracts people from all walks
of life with a common aim — to give people the opportunity to live their
best lives.
Social workers play an incredibly challenging and critical role in
our society. A spotlight shines on their work when things may have gone
wrong, yet they often don’t get that same attention for the daily
positive, patient efforts they make to connect with kids.
[1:55 p.m.]
As research shows, for the kids in the care system, it is the
relationship with their individual social worker that makes a
difference. The thousands of social workers who work tirelessly to
strengthen families and keep children safe deserve to be celebrated.
This week and every week please join me in thanking them for their
compassion, resourcefulness and commitment to building stronger
communities and a better British Columbia.
BEEKEEPING
M. Morris: A few years ago I wanted to enhance the production of my vegetable
garden at home and decided to enter the world of apiculture. I ordered
my first package of honeybees, along with all the necessary equipment,
and so began the fascinating life of beekeeping. My garden flourished,
and because bees travel up to a three-kilometre radius from the hive,
many of my neighbours’ gardens have flourished as well.
As I speak, the five colonies of bees are clustered within their
hives, buried under nearly four feet of snow. The internal temperatures
of the clusters are somewhere around 35 degrees Celsius — the
temperature generated and maintained by the bees vibrating their wing
muscles. The bees survive on stored honey and are waiting for the first
opportunity to stretch their wings and search out their pollen and
nectar sources to begin another season of honey production.
Each colony has a single queen, several hundred male drones and
between 20,000 and 80,000 female worker bees. We harvest an average of
200 pounds of honey each year from our colonies, while ensuring that at
least 50 pounds of honey per colony remains to get them through the
winter.
My life as a politician has impacted my time and my beekeeping
responsibilities, which have been graciously taken over by my wife and
neighbours, who join approximately 2,600 British Columbia beekeepers.
Collectively, in 2017, B.C. beekeepers maintained over 40,000 colonies,
which produced over 3.5 million pounds of honey with a value of $17.2
million — pretty significant contributors to the B.C. economy. A
by-product of honey producers is beeswax, widely used in waterproofing
materials, furniture polish, leather protector, candles,
pharmaceuticals, crayons and a host of other uses.
Bees are an integral part of our biodiversity, a vital component
of our food supply through pollination. The best
part is that anyone
anywhere, whether in urban or rural B.C., can become a
beekeeper.
Oral Questions
CARBON TAX AND GAS PRICES
J. Johal: All British Columbians are going to pay a lot more tax under the
NDP government, including a higher carbon tax. In two weeks, the NDP
will increase the price of gas in Metro Vancouver at a time when it’s
the most expensive in all of North America.
Surely the Minister of Finance has assessed what all her tax
increases will do to our economy. Will the minister release her analysis
so British Columbians can learn how many jobs are at risk?
Hon. G. Heyman: Thank you to the member for the question. As the member knows, I’m
sure, when the carbon tax was first introduced to British Columbia in
2008, the emissions went down and the economy did very well. I’m sure
the member also knows the carbon tax will be rising and implemented
across Canada as part of the pan-Canadian framework.
As British Columbians and businesses across British Columbia have
made clear, what they wanted to know from the B.C. government, once it
was apparent that the federal government was implementing a pan-Canadian
carbon tax, was exactly what the
schedule would be in British Columbia.
We have let them know that.
We have let emissions-intensive industries know that there will be
measures to ensure that they remain competitive and do not cost jobs
through carbon leakage. And, unlike the previous government, we have
made a point of ensuring that accompanying the carbon tax increase will
be real rebates for low- and moderate-income people so they don’t
suffer.
[2:00 p.m.]
J. Johal: On April 1, the NDP will send gas prices even higher. Val Litwin
of the B.C. Chamber of Commerce has referred to NDP increases to the
carbon tax as being part of a dogpile of NDP taxes — higher property
taxes, higher business taxes and higher gas taxes. We’re in an era of
big NDP government.
Did the minister do any analysis of the dogpile of her punitive
taxes, yes or no?
Hon. G. Heyman: British Columbians expect a government that will be leaders on
climate change. British Columbians expect a government that can give
them some predictability about how the federally mandated carbon tax
increases will be implemented. We are doing just that. While doing that,
we’re ensuring that there will be measures to allow emissions-intensive
industries to remain competitive.
I will quote the president and CEO of the Mining Association of
B.C.: “We look forward to working with the government to ensure the
competitiveness of B.C.’s trade-exposed industries, like
mining.”
That’s the kind of leadership we’re showing on this side of the
House — maintain jobs, maintain competitiveness and ensure that we have
real rebates to low- and moderate-income British Columbians.
Mr. Speaker: The member for Richmond-Queensborough on a second
supplemental.
J. Johal: I can assure the minister that nobody believes that increased
taxation is good for the economy. Under the NDP plan, the price of gas
is going up nearly five cents a litre. That’s $7 every time somebody
fills up their car, $14 every time somebody fills up their pickup
truck.
With British Columbians now paying the highest gas prices in North
America, does the minister really believe this is the right time to be
raising carbon taxes?
Hon. G. Heyman: This is the right time to give British Columbia families and
businesses certainty in the face of a pan-Canadian climate action plan,
and that’s exactly what we’re doing.
I don’t know where the member opposite gets his numbers, but I
know that when the carbon tax goes up, British Columbians can look
forward to a rebate that helps them and helps their families maintain
competitiveness. We will not be assigning some sort of supposed revenue
neutrality to a series of tax credits that existed before the carbon tax
was implemented. We will put money in the pockets of real B.C. families.
We’ll work with industries to ensure that they hold jobs in B.C. and
remain competitive.
That’s our commitment. That’s what we said to British Columbian
industries. That’s why we have representatives of B.C. industries on our
climate council. And that’s how we’re going to move forward with the
expectations British Columbians have that we make life better for them
and maintain a prosperous economy while we address climate
change.
P. Milobar: On January 30, the Environment Minister triggered a completely
unnecessary trade war when he overreached on behalf of his Bowen Island
buddies. Now it appears this squabble between the two NDP governments is
not over, with Alberta threatening to double gas prices in the Lower
Mainland.
My question to the Environment Minister: given gas prices are
already the highest in North America and Alberta could raise them even
further, does he really think now is the time to raise the
non-revenue-neutral carbon tax and increase prices at the
pumps?
Hon. G. Heyman: British Columbians would like the members opposite to join us in
defending B.C.’s right to regulate, to protect our environment and to
protect the coastal economy. That’s what we’re doing. Reputable
commentators across the country believe that Alberta has no lawful right
or reason to increase prices on gasoline in British Columbia by
withholding supply.
[2:05 p.m.]
Instead, British Columbians believe that everybody in Canada who
has a dispute should deal with it the way we are on this side of the
House. We referred the issue in contention to the courts. We’re not
making inflammatory statements. We’re not acting unreasonably or
unlawfully. We are simply proposing regulations to defend B.C.’s coastal
economy and defend our interests.
Mr. Speaker: The member for Kamloops–North Thompson on a
supplemental.
P. Milobar: Well, $2 to $3 a litre gasoline is not in anyone’s interest. The
minister should be taking this seriously. He was forced to admit a
mistake to get himself out of the wine war. But clearly, this is not
over, and it could cost us all at the pumps. The minister can avoid this
increase in gas prices in two weeks. Will he delay his carbon tax
hike?
Hon. G. Heyman: I look forward to the day when I can come into this House and
members of the opposition will not be fearmongering among British
Columbians about events that clearly will not take place.
British Columbia is part of Canada, and we’re part of a
pan-Canadian framework to address climate change. Part of that framework
is a nationally mandated price on carbon. We, in British Columbia,
rather than pretending that that doesn’t exist or that it isn’t an
appropriate way to address climate change, have said very clearly that
we’ll raise it $5 a year, beginning in 2018, until we reach the
federally mandated price of $50 a tonne.
We’ve gone further. We’ve invited industry to work with us to
protect jobs and unforeseen impacts on emissions-intensive industries.
That’s our commitment, a commitment that industry repeatedly told us
they failed to get from the members opposite when they were in
government.
REAL ESTATE SPECULATION TAX
A. Weaver: There’s no doubt that we need to take bold action to address the
drivers in our housing crisis. A fundamental component of this is
clamping down on speculation. But the government’s botched speculation
tax doesn’t in fact target speculation.
A speculator is someone who buys a property solely to flip it. A
speculator is someone who parks offshore money in our real estate,
hoping to protect themselves from the turmoil in global markets. A
speculator is someone who uses bare trusts to avoid paying property
transfer taxes, thereby allowing multiple sales and resales with no
change in title. A speculator is not someone who pays taxes here and
owns a vacation cottage. These folk are not trying to capitalize on our
out-of-control housing market.
My question to the Minister of Finance is this. The minister has
said that her aim is to make sure she gets speculators out of the
market. Does the minister consider British Columbians with vacation
homes to be speculators? Or will she ensure that they are fully exempt
from this tax? If so, how will she do it?
Hon. C. James: Thank you to the member, the Leader of the Third Party. I
appreciate the question, and I appreciate his support for a speculation
tax.
We were left, in this province, with a crisis when it comes to the
housing market because the other side ignored the issues and the crisis
that people were facing around affordability. We’ve seen rents
skyrocket. We’ve seen families who can’t afford to live in the community
that they work in. So our goal is to ensure that British Columbians can
afford to work and live in their own province.
We’re including measures in the speculation tax that will protect
British Columbians. We are looking at getting people out of the market
who are using our housing market as a stock market. The specifics will
come. We’re continuing to listen to the issues that people raise,
including the member at the end. We will make sure that housing is
affordable for British Columbians. That’s our aim, and that’s what the
speculation tax will do.
Mr. Speaker: The Leader of the Third Party on a supplemental.
A. Weaver: The government has had years to consult with British Columbians.
Instead, it brings in a poorly thought-out tax measure whose
interpretation seems to change every time the minister or Premier is in
a press scrum.
[2:10 p.m.]
As far as I can understand from the tax information sheet still on
the government’s website, British Columbians with second homes have to
pay the tax, and then they get a non-refundable tax credit after the
fact. Low- or moderate-income British Columbians will, in many cases,
not even be able to use the tax credit. But if you’re very wealthy, you
get the full benefit of the credit. That doesn’t make any sense. It
penalizes people with moderate and low incomes and further entrenches
the idea that home ownership is reserved only for the
wealthiest.
My question to the Minister of Finance is this. Will the minister
reconsider this tax credit model to ensure that British Columbians with
vacation homes are actually protected from the effects of this
speculation tax?
Hon. C. James: I would say to the member, once again, that we introduced the
speculation tax as part of our 30-point plan to address affordable
housing in British Columbia. I said in the budget lockup and on budget
day that the details would be coming. We are listening to British
Columbians, including the member and other people who have put forward
ideas. We have been working on those issues since we introduced the
speculation tax.
The specific concerns that the member raises are issues that are
already on the table, which we are reviewing and looking at as we
implement the tax. As I’ve said all along, details will come. The aim is
to make sure that we get speculators out of the market.
I would say to the member that if you are an individual who owns
four empty houses and you’re leaving them vacant in Vancouver, you are
speculating in the housing market. We will be addressing that, and we
will be addressing affordable housing for British Columbians.
J. Thornthwaite: My constituent Karen has written to the Finance Minister to “tell
you how upset and disappointed I am.” Karen’s parents built a cottage in
1964. It’s still in the family, with the original turquoise bath
fixtures, funny old lamps and bunk beds. To quote Karen: “Our children
and grandchildren absolutely treasure the place. We do not want to sell
the cottage, ever. This is a family heirloom, not an
investment.”
Did the minister intend for her so-called speculation tax to
impact Karen’s family?
Hon. C. James: As I’ve said before, our aim with the speculation tax is to
address speculation. It’s to address affordability for members in
British Columbia so that they can actually live in the community that
they work in.
If it hadn’t been for the other side and the mess they left when
it came to affordable housing, we wouldn’t be faced with this challenge
in British Columbia. But we are faced with this challenge, Member, and
we are going to address it through a speculation tax.
We are doing the responsible thing, which is taking the time to
make sure it’s implemented well — that we address the issues that are
there. It is a bold tax. It is a new measure. We’re proud of that, and
we’re going to make sure that we address affordability for housing for
British Columbians.
Mr. Speaker: The member for North Vancouver–Seymour on a
supplemental.
J. Thornthwaite: Karen is a sixth-generation Canadian and a North Vancouver teacher
close to retirement. She wants the Finance Minister to know: “You need
to think this through. This type of tax could devastate some
communities. I feel you have lost your way.”
Again to the minister, did the minister plan for Karen to pay this
so-called speculation tax, yes or no?
Hon. C. James: I would say, once again, that we are aiming the speculation tax at
people who are speculating in our housing market. The intent is to make
sure that we provide affordable housing.
I would certainly hope that every member in this House believes
that whether you’re a teacher, a carpenter or a small business owner,
you should have the ability to live in the community that you work in. I
would hope that’s the goal of everybody in this House, and if that is
the goal, we are bringing forward a 30-point plan.
The details will come on the speculation tax. We are listening to
British Columbians. We are taking the time to implement it responsibly —
details to come, legislation in the fall. We are going to begin to
address the crisis that was left in this province.
[2:15 p.m.]
L. Throness: Christopher Bruce has written to us to express his concern with
the NDP’s half-baked speculation tax, and I want to quote from his
message. “I have recently inherited the family cottage that my father, a
70-year resident of B.C., built himself over 20 years of weekends and
holidays on property he purchased in 1967, in Nanoose Bay.”
As a retired Canadian living out of province, this large annual
tax could prevent Christopher from maintaining and keeping the cottage
and honouring the wishes of his deceased father. Does the minister think
this is the right way to treat Christopher and his family?
Hon. C. James: I believe the right way to treat British Columbians is to make
sure that housing is affordable for families in our province. I believe,
when I think of the people who I’ve met in my constituency office, who
come in — the seniors who have been evicted or who run the risk of
homelessness, people in communities who are moving elsewhere because
they can’t afford to live in their communities….
We are going to address this issue. We are doing the responsible
thing and listening to British Columbians, including people, as the
member says, who are raising concerns. We will make sure we address
those issues, and we will implement a speculation tax to address
affordability.
Mr. Speaker: The member for Chilliwack-Kent on a supplemental.
L. Throness: The Minister of Environment just said we’re part of Canada. Let me
ask this. I’d like to quote Christopher further: “Although I am a
foreigner by the proposed definition, I am retired and living in
Calgary. The fact that I have chosen to honour my father’s wishes by
continuing to maintain the cottage that meant so much to him and our
family does not, I think, make me a speculator.” Again, does the
minister really believe Christopher is a foreign speculator?
Hon. C. James: I believe that British Columbians deserve to be able to live in
the communities that they work in. I believe that bringing forward a
30-point plan to address housing is more than the other side did in 16
years to address the issue of housing. I believe that people who are
homeless and middle-income families who can’t afford to find a place to
rent deserve a government that’s going to work on their behalf. We are
doing that on this side.
S. Bond: Well, the minister can continue to ignore and dismiss, but let’s
be clear. This government’s half-baked tax policy has angered thousands
of British Columbians by targeting their family cabins. Information
sheet, for the minister’s reference, 2018-001 on the Ministry of Finance
website reads: “A non-refundable income tax credit will help offset the
tax for B.C. residents.”
British Columbians deserve a straight answer from this minister.
To the Finance Minister, a very simple question. Is this document still
government policy?
Hon. C. James: I’m not sure what the member didn’t hear about consulting,
listening, taking the time to implement properly. As I said on budget
day, as I said in the lockup, we are putting out the principles of the
speculation tax. We are letting people know we are moving on this. We
are working on the details for implementation. They will come —
legislation in the fall. The speculation tax will begin to address
affordability, unlike anything the other side did.
Mr. Speaker: The member for Prince George–Valemount on a
supplemental.
S. Bond: Let’s be clear. The fact sheet about the speculation tax confirms
that a B.C. resident with a family cabin will pay the so-called
speculation tax, but apparently, the Premier disagrees with that. He
said that B.C. residents “would not fall in with the out-of-province
speculation tax.”
Now that the NDP has caused total confusion, who is correct about
British Columbians paying the speculation tax? While the Premier might
think it’s funny, British Columbians don’t. Who is correct — the Premier
or the minister’s very own website?
[2:20 p.m.]
Hon. C. James: We are listening to British Columbians. We are working to ensure
that the tax is implemented correctly. We are going to make sure that
the issues are addressed. That’s why we’re taking the time, as I said,
responsibly, to put out the principles of the tax in February, to put
out the implementation details as we go along and to make sure that the
legislation is introduced in the fall. Details to come,
Member.
T. Redies: The Finance Minister clearly did not think these taxes through
before introducing them, but people are making decisions about their
future today.
To the Minister of Finance, can British Columbians rely on the
information on the minister’s website, yes or no?
Hon. C. James: I would say, again, that there are people who, for the last number
of years, have been struggling each and every day with trying to find
affordable housing in this province. I would remind us, again, that
there are families who are not able to find affordable places to rent,
never mind even dream of owning a home.
We are addressing that with a 30-point housing plan to be able to
address affordability. We are ensuring that the details are there. That
will be coming in the next few weeks. The legislation will come in the
fall. People will have all the details, and we will be addressing
affordability in housing.
Mr. Speaker: The member for Surrey–White Rock on a supplemental.
T. Redies: The Finance Minister’s credibility is being damaged as a result of
introducing this half-baked tax policy. To quote the Vancouver
Sun : “The only winners from the government speculation tax
appear to be speculators.”
A. Weaver: Exactly. Exactly.
T. Redies: Thank you.
Will the minister just admit that this is not a speculation tax —
that it’s an out-and-out housing tax on British Columbians?
Hon. C. James: The speculation tax will be targeting those who do not pay taxes
in British Columbia and who treat our housing market as a stock market.
That’s where the tax will be targeted. If someone owns two, three, four
empty houses in Vancouver, they are speculating in the market. We are
going to address that. We believe that’s the right direction to go.
Details will be out, and we will be addressing affordability for
families.
IMPACT OF EMPLOYER HEALTH TAX
BUSINESSES
J. Isaacs: The Retail Council of Canada has written to express their concerns
with this Finance Minister’s half-baked tax policy. “Retailers are
wondering why government has chosen to punish stores which employ
British Columbians.”
Will the minister admit her error and scrap this tax?
Hon. C. James: I will say, again, that the housing crisis in this province has to
be addressed. I’m sorry it wasn’t addressed by the other side. We are
going to address that issue, hon. Member. On behalf of families, on
behalf of seniors, on behalf of individuals who have been calling for
action on housing, we are going to bring forward action on housing, a
30-point plan. The details on the speculation tax are being addressed,
the concerns that are there. We are going to address them and get on
with it.
Mr. Speaker: Coquitlam–Burke Mountain on a supplemental.
J. Isaacs: Half-baked NDP tax policies are going to kill jobs and increase
prices for consumers. The Retail Council writes of significant negative
impacts, highlighting one small retailer who faces a $292,000 additional
annual cost. I’ll quote from the letter again. “There is the real,
near-term prospect of closure for many independent stores.”
[2:25 p.m.]
Does the Finance Minister think small, independent retailers
should increase prices to consumers, lay off hard-working staff or just
simply shut down?
Hon. C. James: I believe that giving individuals $900 a year and families $1,800
a year will help small businesses in British Columbia as those dollars
are circulated. I also believe that eliminating MSP premiums saves $2.6
billion for British Columbia businesses and individuals, one of the
largest tax breaks that has been given in this history. It is a fair way
to ensure that we get rid of a regressive tax — the lowest payroll tax
in this country in British Columbia, more money in people’s pockets,
helping the economy in our province.
J. Martin: Westeck Windows in Chilliwack does a thriving business with 240
employees. The employer health tax will cost Westeck a net $322,000 next
year, a huge hit to their bottom line that has come right out of the
blue.
Does the Minister of Finance think that Westeck Windows should
raise prices for consumers or lay off hard-working staff?
Hon. C. James: We know what we want to do on this side of the House, which is
ensure affordability for families. We know that as government, we’re
saving families $1,800, $900 for individuals.
I would ask the member: what is the member’s idea? Does the member
want to leave in place MSP premiums? Does the member want to increase
personal taxes? What would the member on the other side of the House
do?
Mr. Speaker: The member for Chilliwack on a supplemental.
J. Martin: I’m so glad you asked.
The employer health tax also affects the competitiveness of the
industry. Allow me, please, to quote Casey Kerkhoff of Westeck Windows:
“We need to be very competitive. This becomes progressively more
difficult with manufacturers from Washington state that export into B.C.
They do not have many of the input costs that we have, such as the
employer health tax.”
When will the minister admit that she was wrong to make B.C. less
competitive and end this attack on family businesses?
Hon. C. James: Only the members on the other side would call a regressive tax
progressive. Only the members on the other side would think that MSP was
a good approach.
I’m presuming by the member’s non-response about what he would do
that the members would stick to their agenda, which is to double MSP
premiums on families. We don’t believe in that. We’re making life more
affordable.
[End of question period.]
Tabling Documents
Mr. Speaker: Hon. Members, I have the honour to present a report intituled May
9, 2017, Provincial General Election from the Chief Electoral
Officer.
A. Olsen: I seek leave to ask to present a petition.
Leave granted.
Petitions
A. Olsen: I have a petition here with 16,055 names. The petition is prepared by
Jim Abram. B.C. Ferries provides an essential service for our province. This
petition is calling on the government to return the ferries back into the
ministry.
Orders of the Day
Hon. M. Farnworth: I call Committee of the Whole on Bill 8. In the Douglas Fir Room,
Committee A, I call continued debate on the estimates of the Ministry of
Education. When they are done, it will be the Ministry of Environment estimates
up for debate.
[2:30 p.m.]
Committee of the Whole House
BILL 8 — SUPPLY ACT (N o . 1),
The House in Committee of the Whole (Section
B) on Bill 8; L. Reid in
the chair.
The committee met at 2:34 p.m.
section 1.
Hon. C. James: I’ll just introduce my staff. Rebecca John, director with the
performance budgeting office, Treasury Board staff, and Fisnik Preniqi,
director with the fiscal planning and estimates branch, Treasury Board
staff, are here.
[2:35 p.m.]
S. Bond: As we had a discussion about Bill 8, the Supply Act, previously, I
think most people would understand that this bill delivers on exactly
what the title talks about. It’s to ensure that there are appropriate
funds for the government to continue during the period of discussion of
the estimates.
To the minister and her staff: could she explain exactly the
period of time that we’re talking about the supply being granted for?
We’ll start with that.
Hon. C. James: As with practice, the estimates are granted for two months, while
we continue the estimates process, so for the months of April and
May.
S. Bond: I just want to clarify for the record. I understand that the
actual purpose of the Supply Act is to set aside the amount, not
necessarily the time. I understand that it’s based on 2/12 of the
funding supply. So in essence, this should be about the amount of money.
Is that correct?
Hon. C. James: The member is correct. We try and match it to the time period.
That’s why it’s two months, because that’s the rough time period if you
look at the amount that’s in that section.
S. Bond: The amount that’s captured in
section 1 reflects 2/12 of the…. So
the math’s been done. I just want to be sure that the amount that we’re
talking about in this bill reflects 2/12 of the supply
necessary.
Hon. C. James: That is correct.
Section 1 approved.
section 2.
S. Bond: I would just appreciate it if the minister could walk through
section 2. In our conversation earlier, she talked about the way that
the allocation is constructed and that it is not necessarily evenly
distributed. If the minister could walk through exactly how this is
calculated and perhaps explain the comments that we had the discussion
about, related to not being evenly distributed.
Hon. C. James: The calculation is a third of the totals of appendix C and D, and
that’s been practice. The number was higher a number of years ago, but
that’s been a practice that seems to have worked. It seems to be the
right amount that’s there.
Then we talked a little bit…. I think the member is referring to
second reading, where the member said that she was interested in where
the disbursements are not evenly distributed throughout the year and
what that might mean, what an example of that would be.
That’s mainly
schedule C, where it’s capital projects, where it’s
very hard to determine when the final payment will have to be made.
There may be weather issues. There may be other construction issues.
This number gives the flexibility so that if those payments come at a
different time, we have the ability to be able to address
those.
S. Bond: I appreciate the answer from the minister. And it was specifically
related to capital. So this takes into consideration the building
schedule and whether there are any unexpected delays and whether or not
that disbursement is required earlier or later in the
project?
Hon. C. James: The member is correct. Weather issues or they run into something
in construction that they didn’t expect, so the payment that was going
to have to come at a certain time may come later or earlier, as the
member describes. That’s exactly the kind of example that this
section
refers to.
Section 2 approved.
section 3.
[2:40 p.m.]
S. Bond: If the minister could just quickly walk through what
section 3
does.
Hon. C. James: As this
section speaks to, it refers to taxes that we collect and
pass on. An example would be collecting the fuel tax and passing it on
to B.C. Transit — that would be one of the kinds of examples — or funds
that we collect from the federal strategic investment fund that are for
capital projects for post-secondary institutions.
There’s no impact on the surplus, there’s no impact on borrowing,
and there’s no impact on debt from these transactions; it’s collecting
the money and passing it on to the purpose that it was collected for.
It’s traditional to request that 100 percent of these revenue transfers
collected by government are then flowed to other entities. So this is
ensuring that that process can continue to happen.
S. Bond: In essence, it is basically just another piece of the government
continuing to do its work and making sure that people who are recipients
of that flow-through are not impacted during that period of time. Is
that accurate?
Hon. C. James: I think the member has given, perhaps, a good description of what
this process is in the supply bill. It really is making sure, as the
accountability that needs to occur on estimates process happens and
ministers have to justify their budgets, that we ensure that the routine
operations of government continue to occur. That’s what this process
does as well.
Sections 3 and 4 approved.
Preamble approved.
Title approved.
Hon. C. James: I move that the committee rise and report the bill complete
without amendments.
Motion approved.
The committee rose at 2:42 p.m.
The House resumed; Mr. Speaker in the chair.
[2:45 p.m.]
Report and
Third Reading of Bills
BILL 8 — SUPPLY ACT (N o . 1),
Bill 8, Supply Act (No. 1), 2018, reported complete without
amendment, read a third time and passed.
Hon. D. Eby: I call second reading of Bill 7, Miscellaneous Statutes Amendment
Act, 2018.
[L. Reid in the chair.]
Second Reading of Bills
BILL 7 — MISCELLANEOUS STATUTES
AMENDMENT ACT,
Hon. D. Eby: I move the bill be now read a second time.
Bill 7 amends a number of statutes. An amendment to the Crown
Proceeding Act is required to fix an oversight that occurred when the
Crown Proceeding Act was previously amended in 2004. The proposed
amendment will ensure that the current practice used to prepare and
table a report detailing the money paid out to satisfy judgments and
settle claims against the government is in line with the law.
Amendments to the
Interpretation Act are proposed for the purpose
accessible to those who apply them and those who are subject to them.
The
Interpretation Act applies across the statute book. Ambiguity or
unnecessary complexity in it has a rippling effect through the statutes,
and in the case of the rules respecting the calculation of time in other
legal instruments, leads to misunderstandings and disputes.
The amendments clarify the provisions that establish the time of
day at which statutory appointments take effect and terminate, ensure
consistent policy in relation to changes made to legislation that is
incorporated by reference into B.C. legislation and clarify how the
beginning or end of a statutory or other period is to be
determined.
An amendment is also being made to the Ministry of Provincial
Secretary and Government Services Act. The amendment is required to
correct an oversight that occurred when amendments to the Museum Act
were brought into force in 2003. A numbering error in the 2003 amending
statute prevented the removal of a reference to government providing
access to archives. The amendment will reflect the practice since 2003
of the Royal B.C. Museum having responsibility for government
archives.
The Cooperative Association Act will restore rights of members who
have had their membership in a housing cooperative terminated for
financial default. These rights require that the cooperative provide
notice of the appeal process and comply with prescribed requirements,
specifically the requirement to pay court filing fees in certain
circumstances, making the rules the same regardless of whether a
membership is terminated for financial default or for another cause. It
will enhance clarity for cooperatives and fairness for
members.
Finally, Bill 7 also makes amendments to the Building Act, Fire
Services Act and Fire Safety Act. These amendments will provide that
provincial building and fire regulations, such as the B.C. building code
and B.C. fire code, will no longer be subject to the Regulations
Act.
These highly technical regulations are largely composed of model
codes that are developed nationally, with a small portion of unique B.C.
content. Currently, the Regulations Act requires legislative drafters in
the office of legislative counsel to examine the model national codes
and integrate the B.C. content. These amendments will remove that
requirement and are expected to result in a more streamlined B.C. code
development process, greater administrative efficiency and more
effective use of legislative drafting expertise. The amendments would
still require that notice of any changes to these regulations must be
published in
part 1 of the Gazette .
M. Lee: This bill, as the Attorney General just outlined, is really
covering a number of housekeeping items. This possibly is the least
glamourous work of the work that we do in this House, but it certainly
does gain a lot less attention than other activities in this House. But
the updating and changing of these regulations and statutes is key to
ensuring that our government is functional and running, and they do
allow us to update the legislation to reflect the changing times and the
evolution of our society.
Basically, miscellaneous statute bills ensure that our House is
running — spring cleaning, if you will. Having said that, it is rather
disconcerting that here we are, four weeks into this legislative
session, and we continue to be seeing only primarily housekeeping
bills.
[2:50 p.m.]
This government has, so far, in what is their first full session,
introduced no legislation of substance. We have the mandatory budget
implementation act, which, while containing a great deal of concern to
myself and my colleagues, is required for the budget. We have numerous
other technical and housekeeping bills but nothing that actually comes
close to filling any of the great promises that this government has
made.
This bill, while important, is not really part of the government’s
agenda. I will have a number of questions in the committee stage of this
bill, but for now, I’ll provide comments on the changes.
The Crown Proceeding Act is changed to transfer to the Attorney
General the responsibility for preparing the report that currently is
being required under sections 13(4) and 14(4), and to lay that report
before the Legislative Assembly “as soon as possible.”
Another important set of changes is to consider the alterations to
the
Interpretation Act.
Section 25 is important for the functioning of
our government. It is very commonly used. Certainly, in my prior career,
I’ve utilized that
section in the
Interpretation Act,
section 25, many
times. The clarities that the government is proposing here are important
to work through, particularly as it comes to the
interpretation of the
end of weeks, months, holidays. It’s a large piece of the
Interpretation
Act and an important one. It’s something, I believe, that we’ll need to
walk through, those changes, at the committee stage.
What’s also interesting in this miscellaneous statutes bill are
the changes, as proposed, to
section 26 of the act itself, the
Interpretation Act. That will look to define Pacific Standard Time and
Pacific Daylight Saving Time and provides that references to those times
are to Pacific Standard Time, unless the regulation prescribing the
period for daylight-saving time is applicable at that time.
It’s great that this government is looking to make those changes
and to take the time to do so. But as you know, Madame Speaker, my
colleagues and I — in particular, the member for Boundary-Similkameen —
were hoping for more definitive action. We were hoping that the
government would take action to eliminate daylight-saving time —
something that, as we all lost an hour’s sleep just yesterday, over the
weekend, we can appreciate. The government missed an opportunity to do
that — for once, to take decisive action. Most British Columbians want
this change.
The amendments to
section 36 of the Cooperative Association Act
have also expanded to make more inclusive the definition of “member” and
look at the particular rights in respect of termination of members,
which I think are going to be important to review in terms of the
notification requirements, to look at ensuring that those guidelines are
more efficient and effective as opposed to vague, as the language has
previously been, perhaps, in that legislation.
Finally, there are questions as to the Building Act changes, in
terms of the requirements, to look at the national regime. I think we’ll
want to be looking at, again, the implications of those changes at the
committee stage, and I look forward to having that discussion when we
get to that stage as well.
A. Weaver: I rise with great pleasure to speak to Bill 7, the Miscellaneous
Statutes Amendment Act. These are typically acts that we don’t debate
very often, hon. Speaker, as you will know, as they’re housekeeping acts
— acts that typically have highlighted a number of problems that have
arisen and legal challenges, etc., through the years.
In this particular case, we’re fixing a few things in the
Interpretation Act — important things, defining where a time starts and
ends for various measures — and little additions to the Crown Proceeding
Act, as well as the Cooperative Association Act, the Building Act, the
Fire Services Act and, of course, the Ministry of Provincial Secretary
and Government Services Act.
Now, obviously, I speak in support of these changes. These changes
are the culmination of a lot of hard work done by civil service
legislative drafters, trying to ensure that our bills and laws are as up
to date, as succinct and clear and easy to interpret as
possible.
[2:55 p.m.]
But on the broader question…. The broader question is really this.
We are now halfway through this session. We are going to end at the end
of this week. As it stands, the members of the opposition have brought
in more bills to debate than has government. In fact, the government has
only brought in four bills. What is government doing?
We’re here to debate the Miscellaneous Statutes Amendment Act.
When I sat on the other side, I used to listen to member after member in
the opposition then and now government hurl abuse at the B.C. Liberals
about the fact that all we were debating was miscellaneous statutes
amendments acts. Sometimes there were three such acts. Here we now have
a government that’s been in power for nearly eight months. What are we
debating? We’re debating Bill 7, Miscellaneous Statutes Amendment
Act.
Where’s the Family Day amendment act? We know that the Premier has
stood up and said that Family Day is going to change. It’s one line that
needs to change in that act. Why aren’t we debating that? We had the
members opposite, when they were in opposition, bringing in bill after
bill after bill for years. Where are all of those bills?
Obviously, I stand in support of this, as both sides stood in
support of the Supply Act to ensure that the government was paid, but
really, this is not good enough. Government has been in power for eight
months, and this is the level of our debate here. Frankly, I’m tired of
it, and British Columbians are tired of it. I think that we need to
shape up here in British Columbia and ensure that we’re actually
debating legislation about the issues that British Columbians care
about.
With that, I thank you for your time, and I look forward to
finally debating some other bills that we hope, at some point, will
actually be brought forward to this Legislature.
Deputy Speaker: Seeing no further speakers, the minister closes debate.
Hon. D. Eby: I’m glad to hear the support from the Leader of the Third Party
and the member opposite. Certainly, this is part of the work of the
Legislature. I know that not all members are rushing out to the Ministry
of Provincial Secretary and Government Services Act to see what the
numbering is, but certainly, these are changes and corrections that need
to be made. The Cooperative Association Act will make life easier for
people in co-ops.
I’m proud to introduce this bill, as I will be proud to introduce
future bills, as I was proud to introduce — I can’t remember how many
bills — nine bills last session. There were a lot. As well, I’m proud to
stand beside my colleague the Finance Minister, who started a new social
program and a new tax on speculators in her budget.
A lot of things are getting done in this government. I share the
impatience of all members to get legislation forward, but we’ll make
sure it’s right before it’s brought to the House. This legislation is
just as important in terms of the workings of government.
With that, I move second reading.
Motion approved.
Bill 7, Miscellaneous Statutes Amendment Act, 2018, read a second
time and referred to a Committee of the Whole House for consideration at the
next sitting of the House after today.
Hon. D. Eby: I call continued third reading of Bill 2, the Budget Measures
Implementation Act, 2018.
Committee of the Whole House
BILL 2 — BUDGET MEASURES
IMPLEMENTATION ACT, 2018
(continued)
The House in Committee of the Whole (Section
B) on Bill 2; L. Reid in
the chair.
The committee met at 3 p.m.
Hon. C. James: I’ll just, once again, introduce my staff. We have staff who are
here and staff who’ll be coming back and forth on different sections of
the bill, because this covers a lot of areas across
government.
There’s Richard Purnell, acting director of tax policy; David
Karp, director of income tax policy; Jordan Goss, executive director of
the consumer taxation programs branch, revenue division; Jeffrey
Krasnick, executive director of the income tax branch, revenue division;
Duncan Jillings, who is the director of property tax; and Brad Snell,
who is the senior policy analyst in the mineral, oil and gas revenue
taxation branch.
section 51.
S. Bond: We appreciate the staff joining us again today.
We had a very long discussion on Thursday about the first 50
sections. I think the minister gets the sense of frustration that some
are feeling in the Legislature. This is one of the bills that we have to
have in the Legislature. It’s what brings to life the long list of tax
measures that the minister has incorporated into her budget. I know all
of us are anxiously awaiting the rest of the legislative agenda, as we
certainly heard from the Leader of the Third Party.
Let’s talk about
section 51. If the minister could just, ever so
briefly, let us know why this amendment was necessary, in
section
Hon. C. James: Thank you to the member. I have to say, I thought it was a good
discussion we had on Thursday. I didn’t sense any frustration from
anyone around the process. I thought it was a good process and a really
good discussion. We brought forward some amendments that the other side,
in fact, had suggested. So I think it was a very collegial and a very
positive process. I expect, for the next 50 plus, we’ll continue to have
a good discussion.
What is this
section for? This is related to a new petroleum
information network — Petrinex, which is what the system is called.
Maybe I’ll just talk about why we’re putting in place this system, what
the issue is that it’s there to correct.
Right now volumes that are unaccounted for cause a delay in the
province receiving our royalties from oil and gas production. The future
royalty system — which is the system I was talking about, Petrinex — has
the ability to identify in real time if a facility operator has failed
to account for all its petroleum and natural gas volumes produced from a
well and sold. That, obviously, relates to the issue of the province
receiving our royalties.
Both Alberta and Saskatchewan are using Petrinex right now, and
they’ve benefited from this. They’ve been able to implement what they
call a provisional assessment, which is basically royalty on
unaccounted-for volumes assessed on the facility operator, who may have
put in incorrect information. This compliance tool has been very
successful in both Alberta and Saskatchewan.
We’re moving ahead on it. We believe that that enhanced compliance
will give the province to identify in real time the unaccounted volumes
to ensure that the royalties are paid and the province collects its
share as it should.
S. Bond: Thank you. I appreciate the explanation. To the minister. She
describes a new petroleum system which is being used by other
jurisdictions. This really puts in place the framework for collecting
information and, basically, dealing with volumes that are unaccounted
for. They will be assumed to have been sold.
In terms of putting the system in place, are there financial costs
or additional staffing requirements, any of those things, related to the
system that the minister has described?
[3:05 p.m.]
Hon. C. James: We have no anticipated additional staff once the program is up and
running. The cost, just to break it down for the member, is roughly $17
million for the capital, for the technology, for the infrastructure — to
put in place. There are costs for a maintenance agreement and a
development agreement, so that’s roughly $17 million to implement the
new program.
S. Bond: I’m actually surprised. So it’s going to cost $17 million to set
up the new system. Is industry required to invest in anything to be able
to have this work on their end?
Hon. C. James: No cost to industry to utilize the program. The cost is at our end
to set up the infrastructure and then start collecting the royalties
that were owed to government.
S. Bond: Once the system is put in place, is there a connectivity with
Alberta and Saskatchewan and other jurisdictions that are currently
using it? Could the minister just walk through and give us a situational
example so that we have a better sense of how this works?
That’s a significant investment. Perhaps the minister can describe
the problem that existed that we’re fixing here.
Hon. C. James: The system that we’re currently using is 28 years old, so it has
reached its lifetime, and it’s time to look at a new system. The system
that we’re putting in place…. Industry will send their data through the
Petrinex system, and then we will take a look at how we use that
information to be able to administer the provincial royalties. It’s
basically updating the old system with a new system — that’s in
place.
The servers are segregated, so they’re not connected to each
other. There may be opportunities in the future to look at connections
simply for cross-border work that takes place, but those are discussions
that would still have to come and agreements that would still have to be
put in place. Currently, the system is segregated.
It’s really bringing a new system in place that will be more
efficient, that will provide us with better opportunities to be able to
take a look at the issue of volumes and making sure that the correct
provincial royalties are put in place and collected.
[3:10 p.m.]
S. Bond: The basic principle here is that if, after a review of
information, it looks to the royalty collector that there is a quantity
of petroleum or natural gas unaccounted for, this would make the
assumption that it could be treated as that quantity has been sold. What
happens today if that’s discovered? How big a problem is
this?
I can understand antiquated systems needing to be replaced, but
the issue that we’re trying to fix is…. When there is a quantity of
petroleum or natural gas that hasn’t been accounted for, we’re going to
make the assumption that that has been sold. Is that current practice? I
understand the technological update, but I’d like to know more about the
practice that will impact the producer.
Hon. C. James: Currently unaccounted volumes are found through audits. That’s the
process that works right now. Once Petrinex is in place, then we’ll have
the ability to be able to track those. Just to give a comparison —
that’s really the best way to take a look at it — if you take a look
over a 15-month period that the province of Alberta put in place, the
provisional assessment, they brought in about $1 million a month in
Alberta.
If you apply that experience to British Columbia, if you take a
look at the numbers for the same time period, it would have resulted in
about $125,000 in royalties coming in per month. So that’s a little less
than 1 percent of monthly royalties but a significant dollar figure when
we’re looking at accurate royalties and accurate dollars coming into the
province.
Section 51 approved.
section 52.
S. Bond: Probably fairly straightforward. I’m assuming this is just a
change in terminology?
Hon. C. James: The member is correct.
Section 52 approved.
section 53.
S. Bond: If the minister could just explain for us…. It talks about — that
this does not apply to parts 10 and 11 of the act. So could the minister
describe what exactly the impact is on 10 and 11?
[3:15 p.m.]
Hon. C. James: This is another one of those, as we found as we went through on
Thursday, where there’s a
section that will then apply later on. That’s
what this is related to. Sections 10 and 11 are about the collection of
royalty and taxes and apply to the Ministry of Finance. We felt that it
was important to put additional clauses in, related to the Ministry of
Finance. That’s coming in the next
section — to put in the sections that
will apply to the Ministry of Finance.
Section 53 approved.
section 54.
S. Bond:
Section 54 talks about confidentiality and authorized disclosure
of information under parts 10 and 11. Could the minister describe why
those particular rules are being added?
Hon. C. James: This relates to confidentiality with the new system. I think the
member kind of raised that when she was raising the issue around Alberta
and Saskatchewan and whether information was shared. Because we’re
bringing in the new information system, we wanted to make sure that the
act was consistent with other tax statutes and that protection was
there. We’re basically clarifying so that it would match up with other
tax statutes — clarifying confidentiality rules in British Columbia for
this new system as well. That’s what these sections do.
S. Bond: I think the minister answered my question in terms of the
consistency that it has with other acts. In essence, what this does, I’m
assuming — I’ll summarize — is takes the confidentiality and
protection-of-privacy and disclosure-of-information expectations that
exist in other acts and other systems and applies that to the new
petroleum network that we’ve been discussing?
Hon. C. James: That’s correct, Member.
Section 54 approved.
section 55.
S. Bond: Similar. The way I asked the question when I was looking at it
was…. I assume this is common, again, if someone breaches the
expectations that are laid out. Is this common, then, to other acts and
processes in government?
Hon. C. James: Yes, this is a compliance tool. We’re making sure that we increase
the protection for the province through compliance in this act. Those
are the changes that are in it. It will protect our revenue and our cash
flow and ensure confidentiality and information-sharing abilities. But
it gives us the ability and the direction to be able to collect on
penalties.
[3:20 p.m.]
Then — as we talked about, I think, in a previous section, back on
Thursday — the penalties are in regulation. This gives us the ability to
be able to collect them.
S. Bond: I’m going to ask the minister to just provide a bit more clarity
there. This particular
section permits, through cabinet — in essence,
the Lieutenant-Governor-in-Council…. There are to be regulations
regarding penalties so that if someone discloses certain information and
records….
My question was simply: does the framework that is being suggested
here, related to the new petroleum network, exist in other acts for
other processes in terms of inappropriate disclosure of
information?
Hon. C. James: This is a unique act. It’s a unique process that’s used to collect
royalties compared to any other acts. If you look at taxes — people, how
their tax is — they’re assessed and that’s that.
This process with oil and gas is a monthly process. The data comes
in monthly from the industry. They provide the data to government. It’s
assessed monthly, and then there’s the ability to impose penalties. If
the information isn’t brought in or information doesn’t arrive, we have
the ability to assess penalties. It is, in that respect, unique compared
to some other tax acts that are simply: you file, you get assessed, and
that’s that.
S. Bond: In setting up the new system…. The minister referenced that the
system itself was in place in Saskatchewan and Alberta. Do they have a
similar provision?
Hon. C. James: Yes, it is. It’s very similar to the process that’s being used in
Alberta and similar to the process being used in
Saskatchewan.
Section 55 approved.
section 56.
T. Redies: I’d also like to welcome the staff here. This is a very technical
bill, and I’m sure the minister appreciates having the support of her
experts next to her.
With respect to
section 56, I believe — and maybe the minister
could confirm — this
section has to do with the anti-avoidance rules.
Could the minister explain how this
section actually expands the
anti-avoidance rule and to what specifically?
[3:25 p.m.]
Hon. C. James: I know we had a bit of a discussion on Thursday around the general
anti-avoidance rules and the transactions — what occurs within those
transactions. This has two changes to it. We have an anti-avoidance rule
right now that’s in place to determine the additional property transfer
tax consequences within the general anti-avoidance rules.
This is going to now apply. We’re going to expand that, and it’s
going to apply to all property transfer tax. Currently, it simply
applies to what people call the foreign buyers tax, which is the
additional property transfer tax. We’re going to expand it to cover the
property transfer tax.
Then the second piece is — again, within the general
anti-avoidance rules — we’re also expanding the application. Right now
it applies to the buyer. We’re going to expand it to apply to the buyer
and the seller. Those are the changes that are coming in this
piece.
T. Redies: Just for some clarity there…. I’m not sure if I’m understanding
this. You’re going to apply the penalty to both the buyer and the seller
in the event that the buyer is avoiding tax?
Hon. C. James: Yes, the member is correct. It currently applies to the buyer. The
buyer may not pay their tax. This situation would be that the seller is
complicit in knowing that those taxes weren’t being paid. We then have
the ability to be able to go after the seller.
T. Redies: Could you perhaps give a little bit more clarity on how you would
determine that the seller was also complicit? This seems to be quite a
broad reach of government over the threshold.
[3:30 p.m.]
[R. Chouhan in the chair.]
The Chair: Minister.
Hon. C. James: Thank you very much, Chair, and welcome to the chair.
As we talked about, I think it’s important to note that with
general anti-avoidance rules, that can be a very legal process that
people are utilizing. That doesn’t have any challenges. They pay their
taxes. They utilize this process.
It can also be utilized to avoid paying taxes. They’re complicated
procedures, often. We want to ensure, in this process, that if we
receive information — the language says “may determine” — we may go
after the seller, so to speak. Through this process, if we determine
that the seller was complicit in the process, with information that has
come in or with audits that have been done, this gives us the ability to
do that.
Again, we don’t know — as we talked about before, on Thursday — in
many of these cases, how many of those situations are there. That’s why
the reasonableness test continues to be there. That’s why it says “may
determine” to go after the seller. This provides us an opportunity. If
information that’s received leads us in that direction, we have the
ability to investigate that.
T. Redies: If you get information that a buyer is potentially avoiding tax,
are you going to investigate the seller every time? What’s the
demarcation? Is it just that you have to get specific information that
the seller has been part of that process? Could you explain, maybe, a
transaction where this might apply? Are you thinking about family
relationships or something along that line? If you could just provide a
little bit more clarity.
[3:35 p.m.]
Hon. C. James: I think it’s important to note that the seller has to be complicit
with the scheme or with the abuse. It’s not simply about going after
sellers. There has to be abuse. There has to be somebody complicit in
the scheme.
Just an example. I decide to sell you a fee simple interest, which
is taxable. That’s what I decide. I’m going to sell it to you. In order
to avoid the tax for you, I decide to sell it in a series of 20-year
leases, which aren’t taxable. I’m complicit because I know this when I’m
selling it to you. You’re complicit because you’re avoiding paying the
taxes. That’s an example. That would be an example where the seller
would be complicit in the scheme to avoid paying taxes.
That may be found through an audit. That’s the kind of example.
Information comes in, but that just gives you the kind of example that
may apply in this kind of section.
T. Redies: Sorry to belabour this point, but just to be very, very clear…. Of
course, tax issues get people very, very concerned, particularly in
buying and selling property. I just want to be clear that there’s going
to be no additional onus placed on sellers — sellers’ realtors, sellers’
lawyers — in the event that they know they’re dealing with a foreign
buyer.
Hon. C. James: That is correct, Member.
T. Redies: Has this type of a regulation been put in place anywhere else in
Canada? What have been the learnings?
Hon. C. James: We want to go back and take a look at Ontario, because that may be
one jurisdiction. We’ll get back to the member. We don’t have the
information here, but we’ll make sure we get that information
back.
T. Redies: I think you talked a little bit about this, but if you could just
provide a bit more clarity around how the definition of “tax benefit” is
being expanded and to what effect.
Hon. C. James: This just expands it past the foreign buyers tax. You’ll remember
that I talked about the additional property transfer tax. That’s where
it applies now. This is expanding it to the property transfer tax, not
simply the foreign buyers tax or the additional property transfer tax.
That’s all.
Section 56 approved.
section 57.
[3:40 p.m.]
T. Redies: I think I might start this section…. Because we are going to be
talking about more property taxes, etc. and how they’re being applied,
we’re going to just maybe make some broad questions.
What modelling has been done to determine the impact of this
property transfer tax increase, particularly when you think about the
other taxes that are also being increased like the school tax, the
speculation tax, the employers health tax proposed in this bill and in
the fiscal plan? What modelling has been done to determine the impact on
the marketplace?
Hon. C. James: I think the first piece to note is this tax is already in place.
This amendment is increasing it, but there’s already a 3 percent tax on
high-value houses. We are adding 2 percent, so it will be a 5 percent
tax. It’s about 2 percent of the properties in the province, just so the
member knows. Obviously, when you take a look at applying this, you take
a look at what percentage of homes will be impacted. It’s about 2
percent of properties that are above the $3 million — so more high-value
properties — that are here.
When it comes to economic modelling and including these pieces in
economic modelling, that occurs if the budget passes and if the measures
pass. You obviously can’t put a what-if piece in place in your economic
modelling. Our economic modelling is based on the existing
structure.
The economic modelling will include that for the first quarter,
and you’ll see if there’s any impact in the first quarter. So the robust
work that needs to be done happens once these pass. It goes into the
economic modelling. I think we had a bit of a discussion on this in
September at estimates as well. Once this passes, then it becomes part
of the economic modelling.
I think the most important pieces are the 2 percent of properties
and the fact that it’s an existing tax in place as well.
T. Redies: A couple of things. I do vaguely remember that conversation. I
find it very weird that you don’t do modelling before you put a tax in
place. One would think that you’d want to know what the implications
were going to be on the economy. So I find that very bizarre.
Going back to the 2 percent number. I think it was in the paper
this weekend that 24 percent of Vancouver properties are above the $3
million mark. So I guess you’re…. Is the minister including overall B.C.
in that mark? It would seem to be that there’s a disproportionate number
of residences in Vancouver that, if sold, will be covered by this
tax.
[3:45 p.m.]
Hon. C. James: I think it’s important to note that I’m talking about economic
modelling for changes in the budget. We do economic modelling,
obviously. We take a look at implementing and do the modelling of new
taxes coming in. But when it comes to building the budget, we put the
economic indicators in the modelling. That, then, is the information
that goes forward in each of the quarter reports, and that information,
for the budget itself, is based on the existing taxes. But modelling and
work happen on new taxes that are coming in and being
proposed.
Yes, the member is right. These are B.C. numbers that we’re
talking about. Remember that this is a property transfer tax. Unlike the
school tax, which we’ll talk about as we’re getting there, this is a tax
that applies when homes are sold.
T. Redies: I just did a little bit of a look back from the September 2017
budget update — the property transfer tax numbers in September versus
the February numbers. It’s about a $1.4 billion increase in the property
transfer tax. Is that all to do with the 2 percent increase? Does that
suggest that the minister thinks that there will be no impact on the
sale of homes in Vancouver from this additional property transfer
tax?
Hon. C. James: Perhaps I’ll give the numbers and then get some clarification. I’m
not sure where the member’s numbers are coming from.
In the ’18-19 budget, there’s $81 million expected to be brought
in on this tax. To give the member a rough idea of how that was
calculated, we took two different models. We took a model from two years
ago. We took a model from four years ago. We looked at the number of
properties that had sold over $3 million and came up with the estimate.
So that’s the rough modelling that was used for the tax.
[3:50 p.m.]
Then the ’17-18 budget had roughly $2.1 billion brought in on the
property transfer tax. For ’18-19, $2.2 billion is the
estimate.
T. Redies: It’s on page 18 of both Budget 2018 and the September budget
update. In the September 2017 update, you actually had the property
transfer tax declining. Now you’ve got it inclining, and the difference
that I could make out over three years was about $1.4 billion. So that’s
where my question was coming from.
It seemed to be before — through you, Mr. Chair, to the minister —
that you were expecting the property transfer tax to decline. Now it’s
rising. So I guess my question is: is it because of this additional 2
percent increase in the property transfer tax?
Hon. C. James: The $81 million is what we estimate and what we have in the budget
for this tax. That’s the difference. But the tax is bringing in…. That’s
what’s calculated, and that’s what’s listed in the budget. The property
transfer tax is based on both price and transactions, so there’s a mix
of both. I don’t have the…. I have the ’18-19 budget. I can get the
details for the member and get the specifics to her. I think it was
related to the historic rise that occurred, but I’ll get those details
back.
Section 57 approved.
section 58.
M. de Jong: Part of this was covered a moment ago, but what we are talking
about in terms of
section 58 is the creation of a new tier of tax as
part of the property transfer tax structure. If the minister can confirm
that and also the fact that once the threshold has been met and the
negotiated sale price exceeds $3 million, we can be talking about a
significant amount of additional tax measured in the tens of thousands
of dollars.
Hon. C. James: This is not a new tax. This is a new amount coming in, but not a
new tax. In fact, if the member looks at the previous section, (a), (
b) and (
c) identify what’s already there. One percent of the taxable
transactional fair market value does not exceed $200,000. So that gives
the 2 percent. This is the tax payable. Two percent is paid on the fair
market value that exceeds $200,000 but does not exceed $2 million, and 3
percent of the market value that exceeds $2 million. That’s in existence
already.
The new
section that is being added in does add 2 percent, so it
creates 5 percent for a value above $3 million. Anything below $3
million doesn’t change and fits with the existing tax structure that’s
there.
M. de Jong: Hon. Chair, the minister may not have heard my specific question.
I asked whether this represented a new tier of tax within the existing
property transfer tax.
Hon. C. James: Yes, it adds a fourth level to that bill for residential property
above $3 million.
[3:55 p.m.]
M. de Jong: Does the minister agree that at that percentage and at those
amounts, the amount being collected, depending, again, on the final
purchase price…? But at, for example, $3.5 million, we are talking about
amounts of additional tax measured in the tens of thousands of
dollars.
Hon. C. James: I’m sure the member knows these numbers as well. But just to be
clear, if it was a property worth $3.5 million, as the member has
described, it would be $10,000 on the sale of that property, on the
$500,000. So $20,000 per million — that’s the calculation.
M. de Jong: Which, I would submit to the minister, is not an insignificant
amount.
I want to confirm, as well, that the new tier of tax that the
minister is referring to and purports to introduce via this
section of
the bill in the budget applies to Canadian citizens, Canadian residents
of British Columbia. It is a tax of general application that applies to
British Columbians and Canadians.
Hon. C. James: It applies to everyone.
M. de Jong: Then what I wanted to do was just draw the connection between
section 58 and
section 117, which describes when the tax is intended to
take effect. I simply wanted to confirm that the minister’s intention,
pursuant to the commencement provisions and the way
section 58 is
worded, is that the tax, in effect, takes effect immediately — in fact,
takes effect on the day that she introduced the budget. Put another way,
a transaction that was negotiated back in December or January which was
closing on February 22 would discover and be obliged within that 24-hour
period to pay the additional tax referred to in
section 58.
Hon. C. James: The member is correct. There is no grandparenting on this section.
The tax is in place already at the 3 percent. We are increasing that tax
by 2 percent.
M. de Jong: The reason I was curious about that…. It was actually one of the
minister’s colleagues that sparked my interest, because they were —
during the course, I think, of the budget debate, or maybe second
reading debate on this bill, but I think it was the budget debate —
pontificating about a different approach.
To be fair, when I got the OIC 65 signed on by the minister, I
noted that with respect to yet another new or expanded tax — that is,
the changes to the foreign buyers tax — the minister chose to take a
very different approach.
[4:00 p.m.]
This is a tax, by the way, that applies to foreigners. I just
wanted to make sure that I was reading this correctly — that in the case
of a tax that the minister and her government have chosen to apply, a
tax that applies to foreigners, they are provided with upwards of three
months, if not more, to address whatever obligations might fall to
restructure an agreement. They are given three months to consider the
impact of the government’s new taxation policy, and British Columbians
confronted by a significant expansion of an existing tax are obliged to
absorb that, perhaps, within 24 hours.
Have I correctly summarized and identified the two differing
approaches that the government has taken, one with respect to British
Columbians and Canadians and a very different approach with respect to
foreigners?
Hon. C. James: There are a few differences. I’ll just identify them as we’re
going through this.
The tax that is there, the higher property transfer tax on homes
worth $3 million, is an existing tax. People are paying it. They’re
paying the 3 percent. Yes, we are increasing that tax, but that is
already built in — an increase in the amount over $3 million. Therefore,
we have not given a transition time period.
On the transition of the new tax, increasing the foreign buyers
tax to other areas, that is going from no foreign buyers tax to 20
percent. The issue is supporting local sellers who are in communities,
who are selling those properties, and ensuring that they are supported.
There is a transition opportunity there for those local
sellers.
M. de Jong: I think I heard the minister say that in the one instance, the
property transfer tax represented an existing tax to which a significant
new threshold and new amount owing was added but that that didn’t
require any kind of notice because that’s an existing tax.
It may be that I’m biased, but the foreign buyers tax also strikes
me as having represented an existing tax that has been increased and
expanded. Is that the justification that the minister wishes to offer to
British Columbians for why they are obliged to absorb a significant
increase immediately and foreigners are given upwards of three or four
months to adjust their behaviour to accommodate an expanded
tax?
[4:05 p.m.]
Hon. C. James: The member can present it in a number of different ways, but the
response continues to be the response. There was an existing tax of 3
percent in place. We did not provide a transition because the tax was
existing. We have increased it by 2 percent, as I said, to 5
percent.
On the foreign buyers tax, it has gone from zero to 20 percent.
There is no transition, for example, in Vancouver, on 15 to 20 percent.
Again, it’s an existing tax in place that is being increased so there’s
no transition in that instance. But in the instance where it has gone
from zero to 20 percent, there is some transition to support, as I said,
local sellers who are making those transactions over this time
period.
M. de Jong: Well, I’m obliged to the minister for confirming on the record
what I thought was the case. I think British Columbians will be curious
to see the differing approaches that the minister, I think very
purposely, has taken with respect to a significant tax increase that
applies to British Columbians and Canadians versus one that applies to
foreigners.
I note, in both instances, that she and the government have chosen
to adapt or amplify or expand approaches that, to be fair, predate their
government. I’m mindful of that when I hear the minister, as she is wont
to do, stand up and comment on the fact that her predecessors, to use
her words, “did nothing.” If that were so, she wouldn’t be in a position
to expand the application of the foreign buyers tax.
I suspect I make these comments in vain. But as one who is perhaps
still interested in dispensing accurate information to the public, the
Finance Minister may wish to be mindful of that the next time she makes
that comment. I will thank her for confirming the difference of opinion,
difference of approach, she and the government have taken to tax
increases for British Columbians versus tax increases for
foreigners.
S. Bond: Actually, my co-critic and I have a number of questions on this
section. Obviously, it has a significant impact, and I appreciate my
colleague’s intervention.
I want to just begin the discussion. We’ve had a lot of
conversation in this House — and much of it has been dismissed — about
the layering-on impact of the taxes. So I’d just like to begin the
conversation. I know that my co-critic has a number of other questions
as well.
It would be really helpful if the minister would describe
especially the impact of raising this particular tax from 3 to 5 percent
when, in fact, it is applied two to three times during the development
process. It would really be helpful if the minister could explain to
British Columbians how this relates to an affordability
agenda.
Obviously, the PTT applies when development land is purchased,
when service lots are sold to builders and when units are sold to
homebuyers. Has the minister done modelling or given any thought to the
fact that this layers on, at three particular points in time — the fact
that this cost will be transferred to British Columbians?
[4:10 p.m.]
Hon. C. James: The 3 percent tax has always applied to those transfers. That is
no different than the existing tax of 3 percent that applied over and
above the $3 million. Yes, we have increased that tax to 5 percent.
We’ve added an additional 2 percent.
We believe that people are able to contribute towards an
affordable housing strategy for all British Columbians, and we believe
that this is one of the tools in our 30-point plan to be able to address
that.
S. Bond: Where development sites are particularly expensive…. Virtually all
of them are over $3 million in Metro Vancouver. The added tax is going
to be applied in most cases where sites are purchased, including those
which are being included for purpose-built rental.
To the minister: is she at all concerned that in an attempt to
look at how we…? We hear constant reference to a 30-point housing plan.
Did the minister give serious consideration to the fact that adding an
additional 2 percent when it comes to purchasing the property…? The
development land is purchased, then the service lots, and then the units
are sold to homebuyers. Could the minister explain how that contributes
to an affordability agenda?
Hon. C. James: Yes, we recognize that this is an additional cost. As I said, the
tax has always applied. We have increased it. But we also believe if you
take a look at the 30 points in our housing plan, if you take a look at
the comprehensive plan, that we have a number of other areas where there
are opportunities for developers. Whether it’s looking at…. We talked
about the revitalization zones earlier in the discussion, on Thursday,
where there, in fact, will be a waiving of the school tax to provide
incentives.
We certainly hope that there will be opportunities when you’re
looking at transit and partnerships that can be there for
municipalities. We’re in discussion with municipalities about other
opportunities to spur on development. We believe the comprehensive
approach is the route to go. We believe that that will, in fact,
encourage purpose-built rental properties.
As well, the resources that we are putting into the budget for
developers…. It is one of the areas that we have been encouraged to take
a look at — building purpose-built rental housing. That has not occurred
in this province for decades. We are looking at actually building
purpose-built rental housing, resources to be able to do that, and
developers are very keen to take up that opportunity.
S. Bond: Where to begin. The minister continually refers to the need to
look at residential development. We’ve walked our way through this bill.
When you look at increasing taxes…. The school property tax will also
apply to most residential development sites. The PTT increases will
apply to residential and to development sites. I have a hard time
understanding how the minister can disconnect the fact that this
layering on of taxes is going to have an impact on potential homeowners,
particularly in areas of the province where it is most
critical.
I’m sure the minister and I might agree on one thing, which is:
virtually all development sites in Metro Vancouver are over $3 million.
Ultimately, did the minister look at the layering on? Yes, there are
incentives being provided, but where the crisis is most significant,
from the minister’s perspective and from all of her comments, there is a
continued layering on of taxes.
Was there modelling done that looked at the potential,
particularly related to development sites in Metro Vancouver?
[4:15 p.m.]
Hon. C. James: As the member knows, when you take a look at the comprehensive
housing strategy that we have put together, we focused on three areas —
but two particular areas that really have to do with our modelling, have
to do with the work that we’ve done when we put the comprehensive
strategy together. That’s both supply and demand, and looking at how we
provide a balance.
I think one message has been very clear from everyone involved in
the affordability crisis in British Columbia. Whether you’re talking
about developers or real estate folks or families or businesses and
employers, one of the things that is very clear is that one particular
measure is not going to address the housing crisis. One particular tool
is not going to address the housing crisis.
It has to be a comprehensive approach, and it has to address both
supply and demand. That’s what we have done in doing this. We have
ensured resources are here, as I said, when we’re looking at supply and
building purpose-built rental housing to expand that market. We have
addressed demand in looking at some of the tax measures that we are
bringing forward.
Then the third piece. I know it’s not related to this, but I think
it’s important to make sure we mention it as well. The third piece is
security — security for people who are in existing housing to make sure
that…. Whether it’s the Residential Tenancy Act or whether it’s support
for renovations for many of those places — that’s really the third piece
when we’re taking a look at a comprehensive housing strategy.
T. Redies: We are talking about a substantial increase on most of the
residential property developments, certainly in the Lower Mainland. On a
$30 million project, which would be about an average size, just with
this property transfer tax…. We’re not talking about the additional
school taxes; I’ll have more to say about that in a few minutes. That’s
going to add $540,000 to the project. When we’re talking to the
developers, the developers tell us that they have no alternative but to
pass on those costs to the end buyers.
We’ve talked about the complexity of how the government taxes the
residential property development at three stages. I’m finding it hard to
understand how the minister can be talking about this as an
affordability measure, when these costs, these additional taxes…. And
we’re not even talking about employer health tax yet, at all. That’s all
going to be passed on, in the costs of these projects, to end buyers. So
how is this going to be more affordable for end buyers of these
residential property developments?
[4:20 p.m.]
Hon. C. James: I appreciate the member raising the questions. I guess we’ll agree
to disagree on the comprehensive strategy and the approach of looking at
both supply and demand, the approach of bringing in resources to be able
to provide developments and be able to encourage developers to take on
building rental housing. Those are measures that will assist when it
comes to the development community, that will provide resources to be
able to incent rental-built housing.
We believe those partnerships are important. It’s certainly what
we’ve been hearing, as well, from the development community. We believe
that increasing the existing 3 percent tax by 2 percent brings in some
resources that will assist with that and will assist, as I said, with
spurring on the development of purpose-built rental housing as
well.
T. Redies: Minister, again, I find this…. As somebody who has spent a fair
amount of time with property developers over the years, these additional
taxes are only going to add costs to the end price of the actual
developments that they’re selling. For a government that talks about
creating more affordable housing, this is not going to result in
it.
I’ll just try another tack here. The minister talked about 2
percent of British Columbians potentially being covered by this when
they go to sell their property. We know that in Vancouver, it’s 24
percent. In many parts of the west side and West Vancouver, we have
people who are living on fixed incomes. They’re retirees. Yes, they have
lots of equity in their homes, but ultimately, they’ll probably be going
to sell their properties in the coming years.
Does the minister think it’s fair that they charge an additional 2
percent over $5 million to people who are on fixed incomes and are just
trying to manage their retirement?
Hon. C. James: The example that the member used…. If someone has a house more
than $3 million, and they sell it, yes, they will be paying the
additional 2 percent over and above the 3 percent that was already
there.
Certainly, if you look at the value of houses, if you look at the
property values of houses and the equity in those houses, the equity has
risen a great deal over the last number of years. So this applies, yes,
if they sell that property that has risen in value over those
years.
T. Redies: I guess that means yes — that it’s okay to tax people on fixed
incomes when they go to sell their properties.
Is this going to include vacant properties? Does it also include
properties on farmland in the ALR?
[4:25 p.m.]
Hon. C. James: The definition of residential property is a property described as
class 1 property in
section 1 of the prescribed classes of property
regulations. Just to get to the member’s specific questions on that
issue, yes, it could include vacant land. That could be included along
with residential property. On farmland, it excludes farmland other than
the land underneath the farmer’s dwelling — so the primary dwelling,
which is considered a residential dwelling, but does not include the
other farmland.
S. Bond: We want to walk through this one more time because I think it is
fundamental to the core principle that the minister is continuing to
tell British Columbians: that this budget is all about affordability. So
we should be clear that when you look at the additional 2 percent tax,
in addition to school property tax, foreign buyer tax, you name it —
broad classes of tax increases — the minister purports that somehow,
this will not impact British Columbians who are concerned about
affordability issues. Nothing could be further from the
truth.
The minister doesn’t actually have to look at members on this side
of the House. I’m wondering if the minister has sat down with the
development community — those people who do this for a living, who are
experts — and asked about the potential unintended consequences of broad
tax increases that are going to impact developments in British
Columbia.
[4:30 p.m.]
Hon. C. James: I appreciate the member raising the questions. I appreciate the
member focusing on affordability for housing, because that’s the
particular focus that we have in bringing forward a 30-point plan.
That’s a particular focus that we have in taking the time to meet with,
as the member has suggested, the development community, not-for-profit
groups, co-op organizations, families, individuals and seniors affected
by housing.
We have, in fact, spent the fall doing that. Part of the reason
that we took our time to bring forward a comprehensive housing strategy
is so that we would have the opportunity to have those
conversations.
Yes, the member is right. This is a 2 percent addition to the
taxable value of a residential property over $3 million. An existing 3
percent tax was in place. We are adding an additional 2 percent
tax.
I have to say to the member that in discussions with people over
the fall, when we took a look at putting together a comprehensive
housing strategy, the issue that had more impact on affordability than
anything else that was told to us by everyone — whether you were a
developer, an individual, a family or a not-for-profit — was the issue
of supply and demand. Different groups and organizations put different
weight on supply or different weight on demand, but the two issues that
they felt had more impact than anything else were the issues of supply
and demand.
That’s what we’re addressing in our strategy. These additional
resources, as we’ve talked about before, will bring in resources to
assist with building purpose-built rental housing and properties, which
will, again, provide for affordability.
S. Bond: In terms of affordability and supply and demand, that’s exactly
what we’re talking about here. Has the minister met with homebuilders,
lenders, equity investors or anyone who actually might be interested in
developing projects, including the kinds of rental projects that the
minister keeps referring to?
Hon. C. James: As I’ve already said, both myself and the Housing Minister have
spent the fall talking with all groups and organizations about housing.
Addressing the issues of affordability, supply and demand, including
security, are the key pieces, as I mentioned before, that have come
forward. That’s the strategy we have brought forward.
S. Bond: Did the development community express the concern about
broad-based tax increases that are rapidly applied and how, in their
view, there is no other alternative, when you tax at three different
times in a development process, than that those costs would be passed on
to British Columbians?
Hon. C. James: I would just remind the member again that the tax exists now. This
is not a new tax coming in. We have increased the tax from 3 percent to
5 percent by an additional 2 percent. This tax is in existence
now.
We believe that those additional resources will help with
affordability for families, yes. We believe that when it comes to the
value of homes over $3 million…. The price is not increasing up to the
$3 million; it’s increasing on the price over $3 million. We believe
those resources will address some of the affordability issues that we
are facing for families.
T. Redies: I just want to go at this one more time. With respect to
residential property developers, what has happened here is…. Yes, you’ve
increased the tax by 2 percent on this particular tax. But the minister
and her government have also increased school taxes, or are about to
increase school taxes, on properties over $3 million.
They have also introduced a completely blindsiding employers
health tax. We’re talking of relatively large companies who are
definitely going to be affected by the employers health tax.
[4:35 p.m.]
Their property developments are definitely going to be affected by
the property transfer tax, and they’re definitely going to be impacted
by the school tax, because we know how long it takes to get property
permits and developments done in this province.
[L. Reid in the chair.]
Does the minister not understand that if a development is going to
go through, all of these taxes are going to be passed on to the end
buyer, increasing the price for the end buyer and therefore making it
less affordable? Or, in their overall quantum, it actually might stop
real estate developers in their tracks from developing properties,
because it’s not economic to do so.
When you look at the uncertainty that’s being created in the
marketplace with some of the demand-side measures that the government is
taking, I could also see real estate developers just standing
down.
I guess what I’m trying to understand is: does the minister not
understand that it’s not just this tax; it’s the quantum of taxes that
you’re increasing on property developers, which are ultimately going to
be passed through to the end cost of a condo, of a house, of a townhome,
and it won’t make it more affordable to British Columbians?
Hon. C. James: The understanding around affordability is the issue of supply and
demand and how critical that is to address in British Columbia, how
critical it is to address a moderation in the market so that people can
afford to buy houses, so people have some mobility in the market. You
have existing tenants right now who have no ability to move from an
existing apartment or an existing condo, whether it’s in a good
situation or a bad situation, because there is nothing else available
when it comes to supply and demand.
We truly believe — as we have been told by numerous experts,
whether they are developers, individuals, professors or real estate
agents — that addressing supply and demand will have the biggest impact
on the market. That’s the 30-point plan we have brought forward. That’s
the 30-point plan we are going to address.
I think the member talks about a number of taxes that we’re not
talking about in this bill today, but I take the point. I would remind
the member, as well, that the elimination of the MSP is a $2.6 billion
savings to individuals and to businesses. I would remind the member that
the small business tax decrease is a support to small businesses. I
would remind the member that the PST on electricity is a
support.
I think it’s important that, again, we take a look at the
comprehensive approach and that we take a look at supply and demand. We
believe that for homes that are worth more than $3 million, that
increase in the existing tax of 3 percent by 2 percent will bring in
resources to help us with that supply and demand, which we believe will
have an impact on affordability and increase affordability in the
market.
S. Bond: I know there are many more sections to pursue. But I continue, as
my co-critic does, to be somewhat astounded by the fact that while the
minister continues to talk about the demand side…. I find it
unbelievable, honestly, that she would think that by rapidly increasing
taxation…. To the point being made earlier, this is not a tax we’re
talking about. This
section refers to one. It is an accumulation of tax
increases on the very….
I think the goal here is to say the words “$3 million house” as
many times as possible so that it garners a particular reaction. But
let’s be clear. What this bill does is increases taxes in a variety of
ways — general, broad-based taxation. There is no grandfathering. It is
all happening very rapidly.
It will apply for developers with purpose-built housing projects
as well. So we’re not talking about just residences. We’re talking about
the very kind of housing that the minister stands up and says is
critical to build in British Columbia. Yet what do we see? Layers and
layers and layers of taxation, which will ultimately be passed on to the
end purchaser. Yet those measures are taken under the heading of
affordability.
[4:40 p.m.]
To the minister: has she met with developers — for example, home
builders, others, who invest in our projects — who are losing confidence
and simply saying: “This is too much. We are losing confidence in
British Columbia.” Because the minister needs to be able to connect the
dots — A, B, C, D — and come out at the other end by suggesting that
this has the potential for significant unintended consequences,
particularly related to their very own unaffordability
measures.
Would the minister — at least today, on the record — indicate
whether or not she has heard concerns from the development community in
British Columbia — people who, candidly, this government is going to
need if they’re going to have partnerships with the private sector,
especially to build their 114,000 housing units, of which 80,000 are
missing in action at the moment? There has to be a way to work with
these developers in the province.
Has the minister heard concerns about the layering-on of taxes,
the speed in which they’ve been added and the fact that there’s a lack
of grandfathering, and that there may well be unintended consequences to
the actions that she’s taken?
Hon. C. James: I have heard from a number of people, as the Housing Minister has,
both as we worked through this fall on developing our housing strategy,
as well as since the budget has tabled. I have always said that as an
MLA or as a minister or as a part of government, the only way you make
everyone happy is by doing nothing. Have there been people who have
expressed appreciation? Yes, there have. Have there been people who’ve
expressed concerns? Yes, there have.
There are people who are pleased with the 30-point plan. There are
people who have made suggestions for continued action that can be taken.
That’s why we’ll be taking a look at that 30-point plan over the next
year. We’ll be assessing it. We’ll be looking at the modelling. We’ll be
looking at the impact on the market. We’ll be looking at the impact,
most importantly, on families and seniors and individuals and
affordability.
It’s part of the reason I’m so proud that we put the housing hub
in place at B.C. Housing. This will be a very unique opportunity to work
with developers, to work with municipalities, to work with
not-for-profits, private organizations, the private sector themselves,
to come to the table to look at creative options to be able to build
affordable housing.
I have listened. I will continue to listen. We will continue to
take a look at measures to address affordability, because this is an
issue that has to be addressed in our province. It has become a crisis.
The heartbreaking stories that have come forward make that clear, and we
are going to address it.
T. Redies: To the minister: just to clarify, are you saying, therefore, that
if you see these taxes, and perhaps the quantum of the taxes, having an
impact on residential property development and end condo prices, you
will consider ratcheting back that tax?
Hon. C. James: I would say to the member: as I’ve said with all the changes that
we make, an assessment, of course, happens and needs to happen as we go
along to look at the impact on affordability. And if we need to add
measures, adjust measures, that’s exactly the approach that we will
take. That’s why it’s important to take a look at the comprehensive
plan.
As I said earlier, there is not one measure that is going to make
or break the housing crisis. One measure will not do that. That’s why it
has to be taken into account with the housing plan. Will we continue to
assess it? Yes. Do I believe that there are more measures that may need
to be put into place? I think time will tell, and that’s why we’ll do an
assessment.
T. Redies: I think both sides of the House recognize that there’s a need for
something to be done in the housing market and that it requires both the
supply and the demand being looked at. But I guess the questions we’re
raising here…. We have serious concerns that the quantum of taxation
that is being placed, particularly on residential property developers,
is actually going to have the ultimate goal of reducing supply or
increasing costs to end buyers — so against the affordability that the
government wants to address.
I want to ask a more technical question. The 2 percent increase —
how was that arrived at? That’s essentially a 67 percent increase on
taxation on property amounts over $3 million. Why 2 percent? Why not 1
percent or half a percent? How did you come to that decision?
[4:45 p.m.]
Hon. C. James: The 2 percent was felt reasonable. When we looked at the 3 percent
that was already there on $3 million properties, we felt 2 percent was a
reasonable approach. As I said, we’ll be taking a look at all of the
measures within the housing plan.
Section 58 approved.
section 59.
S. Bond: Once again, this
section talks about the ability to collect
information. Much of this bill is about collecting information. We’ve
worked hard to ensure that, on the record at least, there is a sense of
how that information will be gathered, whether it will be protected,
what kinds of things are being collected. This is related to the
property tax. It adds collection authority. Could the minister outline
exactly what information will be col