2016 Legislative Session: Fifth Session, 40th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, April 26, 2016

Afternoon Sitting

Volume 37, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Orders of the Day

Committee of the Whole House

Bill 19 — Greenhouse Gas Industrial Reporting and Control Amendment Act, 2016 (continued)

G. Heyman

Hon. M. Polak

Personal Statements

Withdrawal of comments made in the House

A. Weaver

Committee of the Whole House

Bill 19 — Greenhouse Gas Industrial Reporting and Control Amendment Act, 2016 (continued)

Hon. M. Polak

G. Heyman

Report and

Third Reading of Bills

Bill 19 — Greenhouse Gas Industrial Reporting and Control Amendment Act, 2016

Committee of the Whole House

Bill 2 — Great Bear Rainforest (Forest Management) Act

H. Bains

Hon. S. Thomson

B. Routley

Report and

Third Reading of Bills

Bill 2 — Great Bear Rainforest (Forest Management) Act

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Transportation and Infrastructure

Hon. T. Stone

C. Trevena

G. Holman

N. Simons

J. Rice

D. Eby

[ Page 12373 ]

TUESDAY, APRIL 26, 2016

The House met at 1:33 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. M. Polak: In this House, I call continued committee stage debate on Bill 19, and in the other chamber, I call consideration of the estimates of the Ministry of Transportation.

Committee of the Whole House

BILL 19 — GREENHOUSE GAS

INDUSTRIAL REPORTING AND CONTROL

AMENDMENT ACT, 2016

(continued)

The House in Committee of the Whole (Section

B) on Bill 19; R. Chouhan in the chair.

The committee met at 1:35 p.m.

section 4 (continued) .

G. Heyman: I’m just following up on a rather truncated discussion on a question around funded units in

section 4.

I believe, if I recall correctly, the minister was saying…. In response to my question of why there wasn’t consideration given in the first instance to allow additional people to participate in the funded units program, she responded that — and she will correct me if I’m paraphrasing incorrectly — prior to the introduction of the bill, there were no funded units, and it wasn’t until they existed in legislation that other people became interested in participating in the program. But a funded unit is substantively similar to a carbon offset. Certainly, there is lots of interest in that.

Again, I’ll repeat my question to the minister. Why was this not present in the original bill, and why is it present now as an amendment? What changed between the original bill and now? If the answer is, again, because people didn’t know that funded units existed before the original bill, now

an act, was introduced, now they do and now they’re interested….

I will try to reframe my question, because it just seems to me that the funded units referred to in the act are a variation on something that’s well known and has been in existence for some time. This was either an oversight, or there was a clear expression of interest for a particular reason, or in the initial instance, the government thought it was unwise to expand the ability to participate in the program to others and now has changed its mind.

If the minister could clarify these issues for us, that would be welcome.

Hon. M. Polak: The funded units did not exist without the creation of them when the act was brought into place. The funded units are not offsets and not like offsets because one doesn’t have to develop a project that would then be the offset.

The funded units and the system under which they operate were completely constructed within the act. Given that there is interest, we think it is wise to take that opportunity to expand this. Of course, this

section also makes changes to how the money is paid for the funded units, which is really just an administrative change — rather than the minister gets paid to the province.

Truthfully, there were no funded units for people to be interested in and no system under which they operated until the bill was brought in.

G. Heyman: Perhaps the minister could clarify, then, exactly how the funded units will operate, how they would have operated if the ability of others to purchase them had not been introduced in this bill and what difference that will make for the operators or the people of British Columbia.

[1340]

Hon. M. Polak: With respect to the way in which they would have operated, they represented the choice that an LNG proponent could make between either purchasing offsets to be in compliance or purchasing funded units.

Now, they are the only industry required to do so. Nobody else was obligated to do that. Since that scheme was introduced, there has been interest on the part of other industry sectors and other non-regulated industries to participate in that scheme where they could purchase funded units. It makes no difference to the way in which it will operate for those with an LNG facility. That remains the same. However, now other players will be able to voluntarily take

part in that framework.

G. Heyman: The minister has said that a funded unit is not the same as an offset, and yet the bill itself says a compliance unit is deemed to be the equivalent of an offset unit. Could the minister elaborate on what the similarities are and what the differences are?

Hon. M. Polak: They’re equivalent. They’re not the same. You actually have to deem something equivalent if it’s not the same. The language actually makes the point.

In terms of the difference, of course, the single biggest difference is that an offset is funding a project that amounts to a reduction in greenhouse gas emissions that are therefore counted toward the compliance or offsetting of an industry that purchases those offsets. The units

[ Page 12374 ]

are not representing a project that’s being constructed. They’re simply a financial compliance that gets put toward a fund that can be used for various initiatives. The funded units aren’t directly tied to any project.

G. Heyman: So if the funded units or the compliance units are not required to be put to work in any particular project, what might they be used for otherwise?

Hon. M. Polak: The revenue from the funded units is placed into the technology fund and then decisions made as to how to allocate that funding. The member will recall from debate on the overall bill that the technology fund is there to fund projects that would see improvements and innovations in technology that would ultimately result in improving operations with respect to their emissions profile.

The funded units themselves are not directly linked to any one project. The money will go into the fund, and then decisions are made with respect to allocating money from that fund.

G. Heyman: What assurance does the public of British Columbia have that if an operator chooses to put money into the technology fund, as opposed to purchase offsets, there’s actually going to be a quantifiable reduction of carbon emissions at some point?

[1345]

Hon. M. Polak: It’s actually referenced specifically in the act as a requirement of how the funds are expended. One of the requirements is that that funding has to be focused on accelerated market adoption of innovative clean technologies that result in lower greenhouse gas emissions. That is part of the evaluation when granting decisions from that fund will be made.

G. Heyman: Pursuing this, there might be an innovative greenhouse gas reduction method that may work, may work a bit, may work substantially but may have no correlation whatsoever to the amount of carbon that was initially emitted, unlike an offset.

What assurance can the minister give, should money be placed into the technology fund, that it will actually have a quantifiable and directly correlatable relationship with the emissions from which the requirement to pay into the fund arose?

Hon. M. Polak: It could be substantial. It could be small. Those who will be evaluating the projects obviously will have some technical expertise to bring to bear to make some of those judgments as to whether or not they project that this will be successful.

Nevertheless, there is reporting out on that. Although it might not be an immediately apparent reduction, as you get with an offset, over time we will know whether or not the particular investment was successful in achieving its emissions reductions intentions.

We will hope that the decisions we make and the projections we make about the success of technology will be accurate. But we will be measuring and reporting those as well.

G. Heyman: We’ll have a fund, the purpose of which is to develop and promote technologies that can reduce carbon emissions. We won’t know until they’re evaluated by experts to what degree these technologies will be successful. But the technology fund is being held up as a proactive mechanism by which the government will require the LNG industry to reduce its emissions profile.

Given the uncertainty of the result — as opposed to, at least, the quantifiable result, barring some of the controversy around measurement that can be attained through an offset system — what is the rationale of the government for establishing this technology fund as opposed to concentrating on something immediately quantifiable?

Hon. M. Polak: Because we need two things to happen here. The one is offsetting, as is traditionally understood. But there’s something else that we need if we’re truly going to get to the place where we are having a chance of meeting the aggressive 2050 target that we have here in British Columbia and the targets that have come out of Paris. That is going to take long-term, very deep change. That is going to require innovation and new technologies.

Just in looking at the act as it stands around the technology fund, remember, as well, that one of the requirements is that it will have a board of directors that includes persons with expertise in clean technologies or the commercialization of new products, processes, services or technologies. They will also publish annual reports that include financial statements and any prescribed information. They have to have an objective, fair and rigorous process independent of government, the applicant and the technology fund for reviewing those funding applications.

[1350]

We have put in place what we think is every possible means by which we can ensure that there is the best possible chance of achieving some of these deep, transformational innovations that will provide us with long-term greenhouse gas emissions reductions of the type we will need to get to our 2050 targets.

G. Heyman: I want to clarify that I believe in investment in technology. I believe in promoting technology, particularly technology that can reduce carbon emissions. I certainly believe that those should be applied to any aspect of the oil and gas industry, because it’s emissions-intensive. But I am somewhat perplexed that it is linked so directly to what’s, in effect, an emissions charge.

My question to the minister is: should these investments in the technology fund not be successful or tech-

[ Page 12375 ]

nologies not be discovered that can substantially reduce emissions from the LNG sector or any other sector to a desirable level, would this impact this act in the future? Or has the minister thought of some way to ensure that this fund is successful and that the results that are achieved are substantial as opposed to minimal?

The Chair: The member for Surrey–Green Timbers is seeking leave to make an introduction.

Leave granted.

Introductions by Members

S. Hammell: In the gallery behind me are 30 fabulous grade 5 students from Creekside Elementary. They are accompanied by Peter Erceg, their teacher. I would do this class chant they’ve got going if I could remember it. They are truly engaged and creative and fabulous kids. They are also accompanied by five adults from their school population. Would the House please make them welcome.

Debate Continued

Hon. M. Polak: In order to achieve what we are hoping, which is the advancement of new and innovative technologies that will transform the way we operate our industries in British Columbia, we have to put in place, I think, first of all, the right people on the board of the technology fund. That’s going to be critical. Obviously, if it appeared that decisions were not being made well or to achieve appropriately what we’re aiming at, we could make changes with respect to who was on the board. We could place additional requirements with respect to how they adjudicate an application.

At the end of the day, we think, right now, that we have a very good process laid out. We can always make adjustments to it if it doesn’t seem to be performing as we would have hoped.

G. Heyman: How does the minister envision the price of the funding units being set or adjusted in the future?

Hon. M. Polak: The rate is set at $25, and it’s set in the regulation.

G. Heyman: Presumably, the rate could change based on experience?

[1355]

Hon. M. Polak: It’s possible. But as far as when that might occur…. If you think about the other organizations currently as part of carbon-neutral government that pay, they pay the rate of $25, and they have done now since we began down the path of carbon neutrality. The price has stood up. I don’t think we anticipate anything changing markedly in the near future, although it is possible. Hence, the reason the rate is set in regulation.

G. Heyman: In the case of public sector institutions, they have no choice with respect to the rate. We have a rate of $25 a tonne, which is almost, but not quite, currently double the market rate of offsets. I’m wondering what incentive there is for industry to choose funded units under these circumstances.

Hon. M. Polak: The difference that staff have recognized in proposing this in this manner is that it goes back to the discussion we were having about the immediate nature of the purchase of an offset versus the longer-term potential for reductions in purchasing funded units. Therefore, it was felt that a premium should be paid for what is essentially lengthening out the time period it’s going to take to realize those reductions.

The funding going into innovation and development of new clean technologies is going to take, longer term, a longer time to bear fruit than the immediate purchase of an existing offset. So it was felt that, really, a premium should be paid for that.

G. Heyman: Could the minister indicate how the quantum of the premium was determined and whether that involved any consultation with industry or looking at other jurisdictions?

[1400]

Hon. M. Polak: I’m advised there weren’t any consultations with industry with respect to this. Instead, it was modelled on our experience with carbon-neutral government.

G. Heyman: But carbon-neutral government is simply a charge to public institutions to put money into a fund from which offsets are purchased, so it’s somewhat different. I realize there’s been a shift in that model recently, but there hasn’t been a shift in the price. I don’t see a direct correlation there on which to base a model for something that’s effectively an investment in a technology innovation fund.

Perhaps the minister could elaborate a bit more about whether it was just: $25 a tonne is what we charge our own institutions, so let’s use that number because it’s consistent with something, or whether there’s a deeper rationale underlying it.

Hon. M. Polak: We’re not aware of any other jurisdictions that actually have this model. Therefore, we had to look at what we had experience with, and we looked to the experience we’d had with carbon-neutral government.

The member is correct. It’s not precisely the same, but there is a similarity in that what we were trying to achieve

[ Page 12376 ]

was price certainty rather than the fluctuation of prices that can occur with offsets. The $25, again, was something we had experience with in carbon-neutral government, and that was what we decided to recommend for legislation.

G. Heyman: The minister replied that they were trying to achieve price certainty by choosing a single number as opposed to the volatility of offsets. But there’d be quite a bit of volatility in an upward direction necessary in offsets to hit the $25 price.

Perhaps the minister can clarify for me if that was seen as a way of enticing industry to choose the fund over an offset program by saying: “We’re going to have the fund. It will have a long time horizon. The price is higher, but it will be $25 a tonne.”

Hon. M. Polak: It was an attempt to strike the balance. If you’re going to achieve some price certainty and if you’re going to be extending the length of time that it’s going to take to achieve those goals of reductions, then you should pay a premium for it.

They also don’t have to lock into one method or another. They can make the decision to have all or part of their purchases be the fund, be offsets, be a mix, and they can change that as they go. We know that there are companies that will prefer to use offsets; there will be companies that prefer to use the fund. They’ll have that choice to make, but there’s a premium to be paid if they choose the fund.

It’s not a desire to have them…. It’s not a preference for one over the other. It’s recognizing that each one is different and, therefore, ought to be priced differently.

[1405]

G. Heyman: The minister, whether wittingly or not, anticipated my next question, which is: given that proponents can have a mix and can change the mix and can opt from one system to another periodically, why is the price certainty of the funded units a benefit when, in fact, if there is price volatility with offsets, that can be addressed by switching to the fund at some point and vice versa?

Hon. M. Polak: But that is why they would pay a premium for it. If somebody was concerned about it, if they were concerned that they were looking ahead and expecting that in the carbon offset market there was going to be some volatility and they wanted the certainty, then they could purchase the funded units. It’s really a choice that they will be making.

G. Heyman: The minister indicated that there was no consultation with either the LNG sector or industry in general around the establishment of the funded unit program or the technology fund. Could the minister describe the process by which the idea was hatched and an ultimate determination was made to incorporate it in legislation, as well as any other options that were considered at the time?

[1410]

Hon. M. Polak: Firstly, let me be clear. We did not consult with industry with respect to the price point, but certainly, in discussions around how they would meet their obligations, what was indicated to us was a desire for there to be certainty that would allow them to calculate their maximum compliance costs.

As it stands with the fund, they can pay into the fund. That will provide them with some price certainty. They could purchase offsets. Of course, the best way would be for them to come in under the 0.16 and not have compliance costs at all.

In discussing with my staff, there really aren’t other means to accomplish this. We’re not aware of other methods that were explored. This was designed as a means of allowing for a calculation on the part of industry with respect to their maximum compliance costs.

G. Heyman: That partially answers the question. It’s actually quite a useful answer, although it does beg the question of what an answer that was given yesterday, which said there was no consultation with the industry on the bill, means. I assume now it means there was no consultation on the specifics of the bill, but there was consultation with industry about what they wished to see reflected in legislation. I’ll make that a question.

Hon. M. Polak: I think that’s fair to say. You know, we certainly understood what kinds of elements were going to be essential to making this legislation work. As far as the details, that was left to staff to direct around the drafting of the legislation. There was certainly no discussion with industry to that level of detail.

G. Heyman: I will thank the minister for that answer, which seems much more realistic to me than the words that formed the answer yesterday, which I took to be a categorical “there was no consultation, period.” I would think, as I go forward, about whether that changes any other questions.

There was consultation with industry about what kind of certainty they needed, what they wished to see reflected in legislation, and presumably some of that is reflected here. Were there other things that industry desired to see reflected in the bill that were rejected by the ministry in drafting?

Hon. M. Polak: I would say this. We’re getting quite far away from what we’re supposed to be discussing here. We’re not really discussing the overall bill and the development of it.

[ Page 12377 ]

Insofar as what may or may not have been included, I don’t have knowledge of that specifically. It predates some of the work of the staff that I have present. I wouldn’t be able to answer that without some time to check back with people who actually were involved. That does get to the broader bill, as opposed to the amendments that we’re discussing here today.

G. Heyman: I would prefer it, obviously, if the minister either had knowledge of the breadth of the consultation process that took place or had the staff here who had that and could answer the question, but that’s not going to happen today, apparently, which means it’s not likely to happen.

Let me ask, because I think the minister does have staff with her today who can answer the question, if there were concerns raised by the Climate Action Team within the ministry around issues to do with offsets, funded units, an innovation fund and how that should be structured; if there were particular ideas that were preferred over others, and any that they considered and rejected because they were thought unworkable.

[1415]

Hon. M. Polak: Staff are not aware of any discussions amongst the team with respect to the use of the offsets, the funded units. But I will say this as well. I’ll be very careful about answering questions with respect to discussions of the team, because, of course, they themselves had an internal agreement as to what they would discuss versus what they would put forward to the minister, what they would put in their report.

It’s one of the reasons they were able to arrive at a consensus. They were very respectful about not revealing publicly all of the discussions that they had throughout their work developing their recommendations.

G. Heyman: Do the staff who are accompanying the minister here today have any concerns about what may or may not serve to make the technology fund successful?

The Chair: The member for Surrey–Green Timbers.

Is leave granted?

Leave granted.

Introductions by Members

Debate Continued

Hon. M. Polak: I’m advised by staff that they have no concerns. They have a lot of confidence in this. They were involved every step of the way in designing how this would operate, so they have a high level of confidence and a high level of confidence in allowing this to be something that involves people with expertise outside of government, those who are in the sector. I think that’s a strength of how this is designed.

G. Heyman: In most development of policy or policy teams, some form of strength and weakness analysis is undertaken, whether it goes by that name or not. Am I to take it, from the minister’s answer, that no weaknesses were identified in the regime that is laid out in the bill and amended by this bill?

[1420]

Hon. M. Polak: Staff have a high degree of confidence in the work that was done. Of course, as you’re developing policy and developing drafts for legislation, you’re not only discussing amongst the team but you’re adjusting as you go to try and end up with the best product. They believe they have.

In addition, we have the amendment that now even widens out that opportunity so that more can take advantage of it than were originally contemplated — and then, of course, a small administrative amendment with respect to how the money is accounted for.

G. Heyman: A high degree of confidence is different from not having identified any weaknesses. Is the minister saying that no weaknesses were identified during the discussions?

Hon. M. Polak: I hope I’m answering the member’s question. I think I will be. There is, of course, in the development of legislation the ability for staff in one ministry…. Where they may need additional expertise or viewpoints from others on areas that are not their area of technical expertise, they can draw on other expertise from other ministries. They do that throughout the process.

Along the way, with the drafting of any legislation or the drafting of any regulation or policy, one will come upon areas that need more attention, that become very complex. That is part of the process. You identify something that needs more work; you do more work on it.

At the time that it arrives here…. Certainly, I don’t think anyone on my staff are claiming any godlike powers of perfection. Nevertheless, they don’t see any obvious weaknesses or things that they’re concerned about. They’re confident that that process was one that was rigorous enough to capture anything that needed to be addressed before it arrived for us to discuss in the Legislature.

[ Page 12378 ]

Sections 4 and 5 approved.

section 6.

G. Heyman:

Section 6 addresses authorization of “persons who are neither operators of regulated operations nor project proponents to hold accounts in the registry.” The minister indicated that the reason this was introduced as an amendment was because of interest from people who fit this very description.

Could the minister describe for us some examples of organizations that are neither operators of a regulated operation nor a project proponent who proposed to hold an account in the registry and what they saw as a benefit to them?

[1425]

Hon. M. Polak: I won’t name companies by name. We are aware of a credit union that has an interest in being able to show to their shareholders that they hold and have retired units in the B.C. Carbon Registry, something that is a value to them. We’re also aware of an air transportation company that also has an interest in working through the B.C. Carbon Registry in this way. Those are a couple of examples.

Again, important to remember that no other industry in British Columbia has the obligation to offset any of their emissions, whether by offsets themselves or by funded units, other than the LNG industry. It is the only industry that is obligated to do so. One can imagine that based on their company’s values, there could be very many industries across B.C. that would see an advantage to them in terms of marketing the products by being able to show that they indeed have offset their emissions.

G. Heyman: With these companies or institutions that saw an advantage to themselves of being able to show units in the registry, did they share with the minister or the minister’s staff how they saw that advantage working for them and precisely what it was, given that there is no requirement?

Hon. M. Polak: One of the distinct advantages is that under this system, it’s public and in a regulated way such that those who place a high value on reducing their carbon footprint have something to show to the world, to their customers, to their shareholders, in a very credible way that they are actually meeting commitments such as carbon neutrality across their operations. They can actually display that.

G. Heyman: How is that different for them than purchasing offsets or saying they’ve purchased offsets after purchasing them or having a program in place in which they simply allow clients to buy offsets, in the case of an air transportation company, or in which they purchase offsets themselves and built it into the price of a ticket or a good or whatever it is?

Hon. M. Polak: It’s their choice. For some, they want to be investing in those longer-term innovative technology solutions that will help the world’s transition to a less emitting society.

[1430]

For others, they will want to make the choice to purchase offsets themselves for a more immediate reduction and effect of reduction. It’s their choice, but they’re expressing this interest to us.

G. Heyman: Has the minister or the ministry given consideration to how an appropriate amount of funded units to be purchased would be determined? Would it be modelled on a formula similar to that which applies to the LNG industry? I have a hard time imagining how that would work. I’m not sure that’s the answer, but if it is, the minister could perhaps tell us how that would work.

Hon. M. Polak: There’s no upper limit. Take, for example, the case of a credit union that has decided that it’s an important value to them to be carbon-neutral, and in order to do that, it’s going to cost them, for the sake of argument, $1 million worth of funded units. There would be nothing prohibiting them from purchasing an additional $5 million worth, if they wish to — even go beyond their carbon neutrality. Ultimately, they could even trade those, sell them, as funded units to others.

It creates this whole mechanism for open trading in the public marketplace in funded units that, ultimately, will benefit the province of British Columbia — potentially more broadly than that, if you have innovative technology that is developed and potentially exported. For those who see the value in it, there’s no upper limit as to how much they could purchase.

G. Heyman: If I’m not misunderstanding this, the number of funded units required of an LNG proponent would be proportional to the excess of emissions over the intensity benchmark.

What would be the benchmark for these other entities that were permitted to purchase funded units? Would it be amounts exceeding carbon neutrality? Would that be measurable? Or would it simply be entirely voluntary? Someone would say, for instance, to the public or their shareholders: “I’ve purchased X number of funded units because I believe that’s what represents the equivalent of carbon neutrality.”

Hon. M. Polak: The LNG industry is the only industry with a benchmark and the only industry obligated.

[R. Lee in the chair.]

[ Page 12379 ]

For those who voluntarily wish to participate, that would be up to them what their goals were with respect to emissions reductions. If they chose to completely offset their emissions, that’s their choice. If they decided they were going to partially offset their emissions, that’s their choice. It’s up to them how they measure, up to them how they report. They’re not regulated by us.

[1435]

G. Heyman: Would it be correct or incorrect if I and the public of B.C. assumed that the focus of the technology fund in the original act was technology that would reduce emissions from the LNG sector?

Hon. M. Polak: I should just add to my previous answer, lest I’ve left the wrong impression. Although the LNG industry is the only one benchmarked and obligated to purchase offsets and/or purchase funded units in order to comply, there are, of course, reporting and monitoring obligations if a facility, if an operation, hits the threshold at which they have to monitor and report to us.

With respect to the next question, which I think I have just now talked out of my mind…. It’s on the tip of my tongue.

G. Heyman: My question was: would I or the people of B.C. be correct in assuming that the focus of the technology fund in its first iteration was emission reduction in the LNG sector?

Hon. M. Polak: I apologize. It was almost there, and it just refused to come forward.

The technology fund was created originally for the purpose of allowing that to be used for compliance in the LNG sector. However, investments from the fund don’t necessarily have to be targeted toward reduction of emissions related to LNG. They could be anywhere where there are emissions reductions to be had and where innovative clean technology can help.

Transportation is a great example. Thirty-seven percent of our emissions currently in British Columbia come from the transportation sector. It’s our largest piece of emissions in the province.

It could be anything. It doesn’t have to be related to natural gas or LNG production, but it does have to be something that will see a reduction in emissions.

G. Heyman: That precludes me from asking whether a change in focus of the technology fund requires any assurance that the application of the technology would be diluted to other sectors since it was never the intent to require the technology fund to focus on innovation within the gas or LNG sector directly.

Does the minister envision…? Will there be any requirements put in place on the fund, or parameters put in place for the fund, to focus research and innovation in areas with the greatest potential of greenhouse gas emission? Or will it be anywhere whatsoever?

Hon. M. Polak: We will still have the ability, in the regulations, to prescribe additional criteria like that if we wished. However, we do believe that, in all likelihood, you will see projects proposed in the areas where they’re likely to get the most substantial advantage in terms of emissions reductions. That would naturally put a bit of a focus on production of natural gas, liquefaction, things like that.

[1440]

We expect that there will be a significant uptake in and around the production of natural gas. We could prescribe that in the regulation — and would, if we thought there was an advantage to it.

This, of course, is intended to be in place for many, many years. We know, with what’s taking place on the climate action file — in British Columbia, in Canada, around the world — that that environment, that context, is liable to shift and change. We’ll be able to shift and change and adapt with it.

G. Heyman: Does the minister have any thoughts regarding what might be the parameters for governance and/or direction of the fund and its decision-making processes?

L. Throness: I seek leave to make an introduction.

Leave granted.

Introductions by Members

L. Throness: It’s great to have visitors in this House, and I’m so happy to welcome a group of students from Hope Secondary School today. We have 36 grade 7 students who are here for three days. They’re on sort of an educational tour of the House right now. I would like to welcome, in particular, some adults who are with them. Their teacher Ahlbert Dayrit is here — and Kim Hollman, Scott Wilkins, Laura Preston, Grant Freeman and Jesse James. Would the House please make them welcome.

Debate Continued

Hon. M. Polak: The technology fund will be a not-for-profit corporation.

G. Heyman: How does the minister envision the board of the not-for-profit being established?

Hon. M. Polak: We would not be establishing the not-for-profit corporation. We would first look to those that already exist and meet the appropriate criteria, as is listed out in the definition. There could be more than one.

[ Page 12380 ]

It could be that a new not-for-profit arises to be operating in this sphere, but we would first look to those that already exist.

[1445]

G. Heyman: I’m a bit surprised by the response. I recognize that there could be an efficiency in doing that, but presumably, in searching for a new not-for-profit board or an existing not-for-profit, the government would be looking for certain parameters regarding the expertise of that particular not-for-profit or the makeup of the not-for-profit’s board. That is, of course, most easily done by establishing a not-for-profit and establishing the qualities or qualifications or background of board members that will govern that not-for-profit.

But if the ministry and the government are actually considering looking at existing not-for-profits, either singly or severally, there must be some thought given to the parameters of experience or expertise that that not-for-profit should have with respect to administering a technology innovation fund.

Hon. M. Polak: It’s important to remember that their function isn’t the management of the money per se. It flows through them, but their primary function would be adjudicating the applications for moneys from the fund.

We do have, of course, criteria listed in the act, but there are any number of not-for-profits that I think would do a very fine job, in all likelihood, of working in that sphere.

G. Heyman: No, I did not think that the not-for-profit or the board would manage the money, but certainly it would be responsible for adjudicating and determining how the money was spent or allocated to researchers or research organizations. Can the minister give examples of not-for-profits that exist that she thinks are suitable?

[1450]

You could even envision that some of those who are very active in the clean energy innovation field, such as not-for-profits like Clean Energy Canada or maybe PICS out of the University of Victoria…. There could be any number of organizations who seek to take part and who then are judged to meet the criteria.

Sections 6 to 8 inclusive approved.

section 9.

G. Heyman:

Section 9 deals with the addition of “regulation-making powers in relation to new entrants and new entrant compliance periods.” Is there any methodology which the minister envisions for determining appropriate new entrant compliance periods, or is it simply wide open?

Hon. M. Polak: The director making the decision would consider the industry standard in that sector for the time it should take to reach a steady state of operations.

G. Heyman: Would those be standards of experience within British Columbia or internationally?

Hon. M. Polak: It would be open to the director to consider any number of indicators, be they international, local or regional. Of course, in applying an international standard, we would want the director to consider some of the unique aspects of operating in British Columbia. For example, if one were to apply expectations based on operations in a very hot part of the world, one would naturally have to adjust for some of the local circumstances if they were going to be operating in the north and in some extreme cold.

G. Heyman:

Section 9 repeals subparagraph (iii) of

section 47. Could the minister explain the reasons for this?

[1455]

Hon. M. Polak: This is being repealed because the

section is no longer necessary. If you look at the powers added through paragraphs (b.1), (b.2) and (b.3), along with the definition of “transitional compliance period,” you’ll see that it provides the necessary powers to do what would have been achieved in the

section that’s being repealed.

G. Heyman: Much has been discussed with respect to the LNG industry generally about the original claims that it would be the cleanest LNG in the world and the difference between including upstream emissions in that calculus or not including them. The government has made it clear that it is not including them. It is simply focusing on the intensity levels of the liquefaction process itself. Can the minister give the rationale for not including upstream emissions in the emissions to be covered by this bill?

Hon. M. Polak: At this time, it is certainly not as simple as it sounds to track and project what emissions there will be in the upstream resulting from the activities of a liquefaction facility. For example, there are some who will use natural gas from Alberta. There are no guaran-

[ Page 12381 ]

tees that a facility would continue to use gas from the location where it started to use natural gas. If a company changed hands, they may change who it is that supplies them over time.

In any case, our comparisons with respect to the benchmark that we’ve set certainly do put these facilities in line to be the cleanest of any of their counterparts anywhere in the world.

Insofar as the upstream, that’s an area where we have to do significant work to reduce emissions. No question about it. But it is not as simple as it sounds to draw a straight line from a liquefaction facility and to project out over multiple years what the emissions profile is going to be and where, in fact, the natural gas is going to come from.

G. Heyman: The Canadian Environmental Assessment review of the Pacific NorthWest LNG project says the project will result in 5.28 million tonnes of CO 2 equivalent per year, 0.27 tonnes of CO 2 equivalent per tonne of LNG, which is a marked increase of greenhouse gas emissions — that it is an 8.5 percent increase in provincial emissions, a 0.75 percent increase nationally and that upstream greenhouse gas emissions associated with the project of between 6.5 and 8.7 million tonnes of CO 2 equivalent per year would represent 10 to 14 percent of provincial emissions total and 0.9 to 1.2 percent of national emissions.

[1500]

The minister is right, I suppose, in pointing out that some of these emissions will be attributable to Alberta. Notwithstanding that, a very significant amount of the emissions will be attributable to British Columbia.

It seems to me that this act, both prior to amendment and with these amendments, doesn’t enable the government to address these very substantial emissions that will, understandably, have a huge impact on B.C.’s future climate action plan, either by making it impossible to craft a plan that meets the suggested targets of the climate leadership team, which were a reduction of 40 percent by 2030, or it will have a disproportionate, perhaps, impact on other sectors.

Could the minister indicate whether, within this bill — and the act, as amended — there will exist the possibility to address those emissions at a future date?

Hon. M. Polak: It is important to note that the overall act, while it only places compliance obligations on LNG facilities, does require the monitoring and reporting from any project that meets the threshold. It’s open to government to regulate in any way it sees fit in the future. But at this stage, insofar as compliance, the only industry that is required and obligated to meet those benchmark numbers is the liquefied natural gas facilities.

Now, it’s also important to remember, though, when thinking about the potential impact on upstream production…. Given the significant drop in the price of natural gas that has been experienced and the significant amounts of natural gas being discovered in the United States, it’s also entirely possible that rather than seeing an increase in production in natural gas, the result of the LNG facilities being established could merely be the maintenance of existing production. That’s also entirely possible.

G. Heyman: Whether that scenario plays out or not — i.e., whether the amount of gas being extracted and the emissions associated with that gas, therefore, remain the same — the whole principle of price-based incentives is to drive reduction in carbon.

In the case of the intensity benchmarks for the plants themselves, that incentive is clearly there. In the case of the feedstock for those plants and the processes by which that feedstock is taken, that incentive is certainly not incorporated in this bill, in the act that it amends, nor even in the failure of the carbon tax to apply to fugitive emissions and a number of processes associated with the industry.

[1505]

My question to the minister is…. This fails to incent the proponents and the industry to reduce emissions at every step along the way from wellhead to waterline, and it fails to contribute to the steps that were identified by the climate leadership team by which there could be, within a provincial climate action plan, room for an LNG industry. The minister herself referred to those aspects of the recommendations of the team.

The minister has said that it’s open to government to regulate at some point in the future. Does the minister see the act that will result should the bill be passed as being a vehicle, with future amendment, to actually take further action on the huge emissions associated with this industry that would enable British Columbia to have a meaningful climate action plan with achievable targets, or would it likely be a different vehicle entirely?

M. Farnworth: I ask leave to make an introduction.

Leave granted.

Introductions by Members

M. Farnworth: In the gallery today, visiting from my riding of Port Coquitlam, is B.C. Christian Academy. A group of students and their teachers are here to observe the proceedings. It’s a wonderful school in my riding, and I would ask the House to please make them most welcome.

Debate Continued

Hon. M. Polak: There is no question. We have to do much, much more if we are going to see reductions, and

[ Page 12382 ]

significant reductions, in upstream natural gas production — absolutely. Now, what form will that take? Will it be legislation? Will it be regulation? That decision has yet to be made. We will await the results of our consideration of the recommendations from the team and the new climate action plan.

G. Heyman: Well, the minister has introduced this Bill 19 to amend the act that was passed in a previous session, the Greenhouse Gas Industrial Reporting and Control Act. The impact of the emissions has been well known to government and the minister through reports and assessments.

Why has the minister not chosen to introduce changes at this time that would assure British Columbians that the government took the recommendations of the climate leadership team seriously, was prepared to bring in a serious plan to address climate change and set achievable emission reduction targets in British Columbia rather than leave it to the future?

It would be possible to do this without outlining the entirety of the plan. Is the reason because the industry has made it clear that it will not set up shop here if those controls are introduced by the government?

Hon. M. Polak: No, that’s not the case. The process is not complete. When the process is complete, we will have decisions announced and then resulting regulation or legislation, if need be.

G. Heyman: The minister has said that it’s clear to her that more has to be done to control emissions upstream in the gas extraction, transportation and liquefaction process. Does this mean that the minister is committed to introducing greater control over these emissions?

Hon. M. Polak: I don’t get to make those decisions all by myself. Instead, we have a cabinet working group on climate leadership, which ultimately reports to cabinet and will make decisions considering the recommendations that we’ve received.

G. Heyman: Does the minister believe that it is possible to achieve the targets the Canadian government has committed to and the climate leadership team has recommended without taking action to control emissions at every step of this process — extraction, transportation and liquefaction?

Hon. M. Polak: There’s no question what has to be achieved. The question becomes: how do you do that? What the cabinet working group wrestles with in looking at the recommendations is how to achieve the kinds of reductions that we’re going to need in the upstream.

[1510]

G. Heyman: The minister has said: “There’s no question what has to be achieved.” For clarity, did she mean that in reference to the natural gas industry or more broadly?

Hon. M. Polak: I’ve said it on a number of occasions, and I’ll repeat it now. We have to see significant reductions of emissions in the upstream. The question of how you do that, though, is not necessarily a simple one.

G. Heyman: It’s understandable that it’s not simple. In fact, it’s likely quite difficult. My question was simply for the minister to acknowledge that we needed to do that. I’m not sure if by how we do that she means what legislative or regulatory mechanism or what technological mechanism or innovation we would use to do that. Perhaps she could clarify that.

Hon. M. Polak: I don’t know, ultimately, where we will arrive at. We’re not completed with our deliberations, with our discussions. I would speculate that in all likelihood, over time, you will end up using a number of different tools, be it regulation, legislation, incentives, technology innovation.

When you think about the work that has to be undertaken to reach our 2050 targets, in all likelihood, you will see a range of tools be employed by governments to achieve the significant reductions we need to see in the upstream.

G. Heyman: Does the minister believe that these mechanisms, whatever they may be, or requirements to reduce emissions upstream in the LNG process will be introduced before or after there is a final investment decision by a proponent?

Hon. M. Polak: I don’t know the answer to that. We’re not complete with our process, so I don’t know the answer to that.

G. Heyman: Does the minister believe that a proponent would make a final investment decision without knowing what all of their requirements will be in future?

Hon. M. Polak: The member’s question supposes an awful lot of things. One of the things that the member’s question supposes is that there is a direct link between a facility and production of natural gas upstream in terms of ownership and in terms of company interest. That isn’t necessarily the case. I’m not going to speculate with respect to that.

We have been ranging quite widely with respect to our discussion, as compared to the topic at hand, which is the committee stage on the amendments. I think I do my best to answer as well as can be expected, but I’m not going

[ Page 12383 ]

to speculate on where investment decisions are going to be made or when. We’re here to deal with the regulation as it stands before us through this act.

G. Heyman:

Section (b.2)(ii) says, respecting new entrance compliance periods: “establishing criteria a proposed regulated operation must meet in order to be accepted as a new entrant.”

Does the minister or the ministry staff with her have some sense of what some of those criteria might look like or at least some of the potential criteria that might be considered in the establishment of final criteria?

[1515]

Hon. M. Polak: Of course, it would likely look somewhat different, depending on the sector. But in particular, at this stage, we know it would have to be a new entrant, not a transfer. And there could be a relationship to size of the project as well. That could be another example.

G. Heyman: Sub (iii) says: “prescribing the matters the director must take into account in considering an application for acceptance as a new entrant.” Could the minister or the staff with her assist us with some sense of what some of those matters might look like or what was being contemplated that gave rise to this wording?

Hon. M. Polak: It’s hard to know, at this stage, without the detail of an application in front of one that describes a particular project that you could then analyze. We were throwing around ideas around what would happen, what might be different for a brand-new pulp mill or a brand-new cement production facility.

Some of the things that may be considered are the fulsomeness of the application, the timeliness. We’d certainly want them to apply before they actually started operating. It could be any number of factors that the decision-maker feels are appropriate — but again, tailored to the specific industry that was in question.

G. Heyman: Sub (iv)(

B) says: “deem the amount of greenhouse gas emissions attributable per unit of production for a later discrete period to be attributable per unit of production for an earlier discrete period.” Could the minister clarify how this would operate in practice and if this is different from the extended compliance period for new entrants?

[1520]

Hon. M. Polak: This gives to the decision-maker the power to attribute emissions where they best feel they should be attributed. This would allow for the decision-maker to be able to deal with circumstances that may arise as a result of…. Perhaps, over time, there might be changes in reporting. There might be increased requirements. There might be new information that results. This allows the decision-maker to attribute emissions as they see would best reflect the reporting requirements, etc., in a case such as that.

G. Heyman: Is one of the possible results that there could, in effect, be a smoothing of emissions, so emissions for which an operator might be required to either purchase offsets or purchase funded units could be transferred to a different period that would lessen the impact? In effect, could this be a form of emission splitting?

Personal Statements

WITHDRAWAL OF

COMMENTS MADE IN THE HOUSE

A. Weaver: Hon. Chair, earlier today, you may have noticed, I made a comment that I wish to withdraw.

The Chair: Thank you, Member.

[1525]

Debate Continued

Hon. M. Polak: As an example, it could be that during the commissioning phase, something outside of the facility’s control could occur, causing a spike in emissions for a short time. The decision-maker would not be required to use this tool to then deal with that, but they could. They would have the discretion to use this tool, if that seemed appropriate.

Sections 9 and 10 approved.

section 11.

G. Heyman:

Section 11(i)(

B) says: “establishing qualifications that a person must satisfy to hold an account.” What might the minister envision to be the kinds of qualifications a person would require in order to hold an account? Has the ministry given any thought to this, or is this just an enabling provision?

Hon. M. Polak: It’s a very broad enabling provision, especially when you consider that “person,” under the

Interpretation Act, could also be an entity, not just an individual.

It could be something as simple as making sure that they’re of the age of majority. Perhaps you want to require criminal record checks. I don’t think we want anybody registering or being part of the registry if they’ve been convicted of some kind of terrible fraud. So you can imagine all manner of requirements one might place on that, but it is a very broad enabling.

[ Page 12384 ]

G. Heyman: The

section goes on to talk about “establishing restrictions on the participation in the registry of a person authorized under that

section to hold an account.” How might a person’s participation be restricted?

[1530]

Hon. M. Polak: As an example, if someone had been subject to penalties under the act, then this would provide the authority to restrict how they are able to operate within that context, such as restricting them from making transfers.

G. Heyman: Could there potentially be additional restrictions?

Hon. M. Polak: There could be. One could contemplate there could be a suspension, for example, from the registry, but that will be developed in the regulations, as this really just provides the authorities.

Sections 11 to 13 inclusive approved.

section 14.

G. Heyman: So (

a) says: “in subsection (4) by striking out ‘each reduction of one tonne of greenhouse gas emissions’ and substituting ‘a reduction in greenhouse gas emissions or atmospheric greenhouse gas concentrations.’” Is this simply housekeeping, or is there more substance to this?

Hon. M. Polak: It’s housekeeping. This is consequential.

G. Heyman: With respect to

section 14 generally, what impact does the minister think this will have on government meeting its emission targets, if any?

Hon. M. Polak: It’s administrative. It shouldn’t have any impact, plus or minus.

Sections 14 to 16 inclusive approved.

Title approved.

Hon. M. Polak: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 3:33 p.m.

The House resumed; Madame Speaker in the chair.

[1535-1540]

Report and

Third Reading of Bills

BILL 19 — GREENHOUSE GAS

INDUSTRIAL REPORTING AND CONTROL

AMENDMENT ACT, 2016

Bill 19, Greenhouse Gas Industrial Reporting and Control Amendment Act, 2016, reported complete without amendment, read a third time and passed on the following division:

YEAS — 45

Lee

Sturdy

Bing

Hogg

Yamamoto

Michelle Stilwell

Stone

Fassbender

Oakes

Wat

Thomson

Virk

Rustad

Wilkinson

Morris

Pimm

Sultan

Hamilton

Reimer

Ashton

Hunt

Sullivan

Cadieux

Lake

Polak

de Jong

Anton

Bond

Bennett

Letnick

Bernier

Barnett

Yap

Thornthwaite

McRae

Plecas

Kyllo

Tegart

Throness

Martin

Larson

Foster

Dalton

Gibson

Moira Stilwell

NAYS — 32

Hammell

Simpson

Robinson

Farnworth

Horgan

James

Corrigan

Fleming

Popham

Austin

Chandra Herbert

Huntington

Karagianis

Eby

Mark

Bains

Elmore

Wickens

Shin

Heyman

Darcy

Donaldson

Krog

Trevena

D. Routley

Simons

Macdonald

Weaver

Chouhan

Rice

Holman

B. Routley

Hon. M. de Jong: Committee stage on Bill 2.

[1545]

Committee of the Whole House

BILL 2 — GREAT BEAR RAINFOREST

(FOREST MANAGEMENT) ACT

The House in Committee of the Whole (Section

B) on Bill 2; R. Lee in the chair.

The committee met at 3:47 p.m.

[ Page 12385 ]

section 1.

H. Bains: I just want to say thank you to the staff who are here to help us through this bill. We will try to put some questions. It’s a new bill. It’s not an amendment or change to the existing bills or legislation, so I think it’s an area that we need to explore.

If the minister could explain, under the

definitions. We all know what AAC means. For those who are watching and don’t understand what the AAC is, it’s allowable annual cut. They talk about adjustment period, the definition of, and the definition of “AAC determined by the chief forester.”

If the minister could explain the first part: “‘AAC adjustment period’ means the period beginning on the date

section 6…comes into force and ending on December 31, 2026.” When I’m looking at

section 6, it talks about: “In this section, ‘official map’ means the map deposited in the Media Vault, GeoBC, Victoria as Map of Great Bear Rainforest Forest Management Area, reference number 577.3409711….”

The map is deposited, but how do we know what this map is? If we are passing this legislation, can the minister explain…? Perhaps in a rough form, you can explain what area we are talking about until we get to

section 6.

[1550]

We could talk about it there. But I think it makes the reference of after

section 6 comes into effect. To me, we’re talking about the map. We’re talking about the area. So could the minister explain what this area looks like?

Hon. S. Thomson: Before I respond, I’ll just introduce the staff that are here assisting — Rory Annett, who’s the executive director with the coastal projects; Deidre Wilson, who’s the senior legislative analyst; Colleen McKendry, our senior policy adviser; and Craig Sutherland, who is the assistant deputy minister for the coast area.

The map that the member opposite is referring to with reference to

section 6 is the map that will officially outline the boundaries in the area of the Great Bear Rainforest. It’s the area that arose out of the north coast land use plan, the south coast land use plan. It’s the area that’s subject to the land use orders that have been in place. It’s really the official designation of the area of the Great Bear Rainforest.

By referencing the adjustment period in the definition, once the designation of the management area, which is the Great Bear Rainforest, comes into force, then that’s when the AAC provisions apply and take place from that and, as we’ve talked about previously, the ten-year AAC period for the set amount of the AAC — the limits for that time period, for the ten years.

H. Bains: Perhaps the minister could…. Maybe I’ll put it in a different way. Could the minister describe the geographical area of British Columbia that this map covers? So if the minister could describe from what end to what end. How many hectares are we talking about? What is this area? Where is it in British Columbia?

Hon. S. Thomson: The GBR area, 6.4 million hectares. It extends from the Discovery Islands in the south to the B.C.-Alaska border in the north and includes all of the offshore islands in the area except for Vancouver Island and Haida Gwaii. So it’s Discovery Islands north to the B.C.-Alaska border and inland in the areas that were part of the land use plan and the land use order area. From that point on the coast to the B.C.-Alaska border, 6.4 million hectares.

H. Bains: I’m asking these questions for the benefit of people who may be listening so that they understand the technical terms the minister and I and others in this House understand, so thank you for that answer.

Just to clarify, it does not include any part of Vancouver Island and Haida Gwaii islands. Is that correct?

Hon. S. Thomson: That’s correct.

H. Bains: Let’s look at the “Crown land” definition, in relation to timber supply area. It “does not include Crown land in the following areas: (

a) a tree farm licence area; (

b) a community forest agreement area; (

c) a first nations woodland licence area; (

d) a woodlot licence area.”

[1555]

What is the purpose, if the Crown land is there, but we are saying that it does not mean the Crown land in those areas? My understanding is that in those areas there is still Crown land, by definition. Why is this mentioned as Crown land not including these areas, when they actually are Crown land?

Hon. S. Thomson: This definition of Crown land only applies to the timber supply areas.

[ Page 12386 ]

What this does is it ensures that when the legislation is speaking to Crown land in the timber supply areas, it doesn’t include the other tenure types —community forest, tree farm licences, First Nations woodland licences, woodlot licences that could be located within the external boundaries of the timber supply area.

You punch out those areas, and then the AAC is determined on those other areas. Then that is all included in the overall limit of 2.5 million hectares in the area.

It allows for the specification of the AACs for Crown land in the GBR north timber supply area, land in TFL 25. TFL 25, for example, has blocks in both the GBR north, when that’s set up, and the TFL land. If they were not excluded from the definition of Crown land in the TSA, it would be difficult to work out how much AAC was interacted between both tenure types. So it’s really a process to ensure that the Crown land, for this purpose, applies only to the timber supply areas.

H. Bains: If the minister goes on to the next part of

definitions: “‘GBR part’, in relation to a partial GBR timber supply area or partial GBR tree farm licence area, means the part of the area located in the GBR forest management area.”

I guess if you could explain the difference between GBR part…. Then there’s a non-GBR part, and then there’s a new non-GBR timber supply area. If you could explain what we are trying to explain here — the GBR part, especially, and non-GBR part.

Hon. S. Thomson: This definition is required because there will be some management units. Timber supply areas, tree farm licences have a portion of their area that are both inside and outside of the GBR forest management area. So the GBR part refers to those parts that are located within the GBR forest management area.

B. Routley: I have a couple of questions under

definitions. In the first one, if you don’t mind, we’ll go back to AAC adjustment period. It does talk about a date. It says: “…the period beginning on the date

section 6 comes into force….”

Now, is that the date that this legislation passes, or is that some other date?

[1600]

[R. Chouhan in the chair.]

Hon. S. Thomson: The area, both the depositing and the start of the AAC adjustment period, will be brought into force by regulation. That will be the date from which the regulation and the map that is part of the regulation process, the map defining the area, will be deposited. That sets the start point for that ten-year adjustment period. That period might be a little longer. If the act comes into force prior to December 31, 2016 — because this ends on December 31, 2026 — it could be a little longer than the ten-year period, depending on when the regulation bringing the act into force is brought forward.

B. Routley: GBR means Great Bear Rainforest. I’m not sure if you’ve ever seen a great bear or if you know the context from where that came. Maybe you could describe whether there actually is a great bear in the Great Bear Rainforest? Is this a term of endearment that you personally subscribe to? Or does this come from some other place?

Hon. S. Thomson: The GBR can take its origins back to, I think, a dinner of environmental organizations who led the market campaign. I think it was in a restaurant in Los Angeles. It might have been on the back of a napkin, that kind of process. As they moved forward with the market campaign, they knew they needed to brand their market campaign. It became the Great Bear Rainforest campaign, and as that evolved, it became what the area was known as. It was since adopted through all the Great Bear land use orders, the Great Bear Rainforest legislation now, the agreement — all of that.

That’s where it all started. I remember being at the celebration when we finalized, completed the agreement, and hearing that story of where the original name came from.

B. Routley: Thank you for that clarification. I, in fact, looked it up on Wikipedia to see what they had to say. They had to say that it was a name conjured up, essentially, by environmental groups and coined. I thank you for the clarification that it was actually penned on the back of a napkin in a restaurant somewhere. That’s worthwhile knowing.

[1605]

I know that the Great Bear somewhat relates to the fact that there are the kermode bears, often referred to as spirit bears. Apparently one in ten of them have cubs with a white coat. There are grizzly bears, and there are black bears. Do you know if there are any other kind of bears? Are there brown bears? How many other species of bear make up the Great Bear Rainforest?

Hon. S. Thomson: Again, the story about the napkin in the restaurant…. You know, that was the way they portrayed it. It might not have exactly happened that way. I’m not sure, but it was a good story anyway.

I’m just getting a quick lesson here. There are two bear species in the area. There are grizzlies and black bears. The white spirit bear is a variant of the black bear. Grizzly and brown are the same bear. So there are two species of bear in that area.

B. Routley: Well, I’m just going to skip forward to the special forest management area. I went to

section 50 to look for further clarification on the special forest management area, which really isn’t all that helpful. Could you give us a brief description of what exactly you were trying to get at with the special forest management area? What’s special about it?

Hon. S. Thomson: The special forest management areas are areas within which commercial harvesting forest activity would be permitted. No further licensing or cutting permits would be issued for commercial harvesting purposes. Other commercial activities could still be permitted in those special forest management areas — e.g., mining or tourism activity.

They were specifically put in place. There are eight in the land use orders. Six were proposed by the joint solutions project team, and two were proposed by Coastal First Nations, for a total of eight. They were designed primarily to protect very specific First Nations cultural and spiritual values in those areas but also to allow the First Nations economic opportunities around tourism

[ Page 12387 ]

and other potential opportunities other than forest activities. So forest activities are prohibited in those special management areas.

Sections 1 and 2 approved.

section 3.

[1610]

H. Bains: I think I’ve got questions. Maybe we could combine

section 3 and

section

Section 3 talks about AAC specified by Lieutenant-Governor-in-Council, and

section 4 talks about AAC determined by the chief forester. Why is it that the cabinet is taking over AAC determination from an experienced chief forester who has the science on his side? He’s an expert. He knows how the forest works, rather than the cabinet. Why are we making this distinction that there is some AAC specified by the chief forester and others by the cabinet? Why do we give this power to the cabinet?

Hon. S. Thomson: This is an important part of the legislation and the agreement. The amount, the AAC, which is being specified for the ten-year period…. The maximum for that time period is being set by regulation. It provides the certainty that was part of the agreement with the forest industry and all of the environmental organizations and groups that were part of the agreement. The chief forester was involved in all of the analysis that recommended the initial AAC of 2.5 million cubic metres. So that analysis and advice was taken into place.

This was a negotiated amount. The chief forester operates under

section 8 of the Forest Act. Because this was a negotiated process, it specified set by cabinet and set through regulation. The chief forester will still be involved in the AAC on those where there are elements that are outside the GBR boundary, where they overlap and cross over.

After the ten-year period of certainty, the negotiated certainty, the role of the chief forester will come back into play.

H. Bains: Again, it may be negotiated. I get that. Why? Why would you take the authority of a chief forester, who is the right person to determine the AAC, based on a number of different factors…? Rather than the chief forester doing it, why was it felt necessary to sign on this agreement and take it from the hands of the chief forester — who determines the AACs, like I said, based on science, based on inventory, based on the area?

Where will the cabinet have that expertise to determine the AACs? Why was that right ceded in negotiations, taking it from the chief forester and bringing in the hands of politicians?

[1615]

Hon. S. Thomson: Again, the chief forester sets, in her role and under

section 8, based on analysis and science and all of that work. In this case, this was a negotiated agreement with all the parties, with the chief forester involved in the analysis that helped determine what that negotiated amount was by all the parties. It sets it in place. It provides a certainty, which was a key part for the industry, for the ten-year period in place. It is, in a sense, implementation of a negotiated agreement for that ten-year period, a key part of the agreement. Then the chief forester role comes back into play after that.

But again, I need to point out clearly that the chief forester — her office — was involved in all of the analysis, along with the joint solutions project, the technical teams that came to that agreement in setting that amount for the ten-year period.

H. Bains: Two questions come out of this. I still don’t get the right answer, other than to say that it was a negotiated agreement. I get that. It was a negotiated agreement. Why? Why would you put that decision, which is science-based and based on numerous different factors — that the chief foresters determine the AACs — in the hands of the politicians when the chief forester could still do that, unless the parties feel that the chief forester may come up with a different conclusion than what the cabinet would?

There have to be some reasons behind it — some real, logical reasons — other than to say: “Well, it was a negotiated deal.” Was it because we are putting boundaries around this area — we call it the GBR management area — that some of the AACs and some of the tree farm licences and timber licence areas may require going around what the current existing rules are, established by the chief forester? Is that what we’re trying to do here?

Hon. S. Thomson: The recommended solutions and the amount recommended, negotiated, worked through all the technical analysis by the joint solutions project team, endorsed by government and First Nations, are negotiated AACs for the management units, for the TSAs and the TFL areas in the Great Bear Rainforest management area. As such, they have not been derived through the normal AAC determination process conducted by the chief forester under the Forest Act.

That’s why the Lieutenant-Governor-in-Council is establishing these numbers by regulation. To do so otherwise would fetter the chief forester’s normal AAC determination process. She’s a statutory decision–maker under the act. This process of setting a negotiated AAC by agreement with all of the parties would fetter her responsibility, so that’s why it’s left by cabinet, in regulation, to implement the agreement.

H. Bains: This also gives the cabinet the right to extend this to ten-year cut control rather than five-year?

[ Page 12388 ]

Hon. S. Thomson: The cut control provisions…. The member is jumping ahead to a further

section in the legislation. The cut control periods set in the legislation…. There are and will be provisions for a longer cut control period in the northern part of the Great Bear Rainforest set within the legislation.

Sections 3 and 4 approved.

section 5.

[1620]

H. Bains: Again, I think my question here is: why doesn’t this act protect, identify the vulnerable area of the GBR, rather than leaving it to the Lieutenant-Governor-in-Council to partition licences?

Hon. S. Thomson: Just to be clear, the partitions are not for the licences. The partitions are for the AAC. Given that the AAC is being set by the Lieutenant-Governor-in-Council, to be consistent, the partitions for that time period are set by the Lieutenant-Governor-in-Council as well.

Section 5 approved.

section 6.

B. Routley: The official map is in a media vault. I’m just wondering if there’s…. Is this map available to the public in some way or on line? Is there something about the map storage that is unavailable to the public?

Hon. S. Thomson: Yes, the map is available, will be available, publicly on line. The depositing in the vault with GeoBC is the official record of it for archiving and for registration purposes, but it is generally available.

The map is consistent with the land use orders and what people and all of the companies and people participating in the process and the agreement generally know as the boundaries of the GBR.

B. Routley: Will that map be updated as roads are developed and as logging plans become clear?

Hon. S. Thomson: The map that’s being referred to here, the official map, defines the area. It’s the outer boundaries.

B. Routley: Now I am confused. It doesn’t include some of the areas that will be specially managed, within the map?

Hon. S. Thomson: Separate maps will be developed and deposited for the special management areas as they’re defined and the boundaries are finalized. Those will all be available, as well, and available publicly.

B. Routley: These special, separate maps that aren’t referred to in

section 6 — are they referred to somewhere else in this piece of legislation?

Hon. S. Thomson: Those areas will be set by regulation, and then the maps will be deposited once the regulation sets those out within the land use orders.

[1625]

B. Routley: Roughly, what would be the geographical size of those areas? Is this the eight special areas that you referred to, and do you have an idea of the rough size of those geographical areas?

Hon. S. Thomson: The special management areas total 291,320 hectares. The proposed areas, if you know the areas, are Kitsault, Gil, Green, Braden, Kimsquit, King Island, Broughton and Thurlow.

Section 6 approved.

section 7.

H. Bains: Here we’re talking about the AAC adjustment period, which seems to me, if this bill passes, will take you till 2026 — so a ten-year period. My question is: will the cap that we’re talking about here apply to the whole GBR area?

Hon. S. Thomson: For the TFLs and the timber supply area that are within the overall boundary of the Great Bear Rainforest area, that 2.5, the maximum allowable annual cut, will apply.

H. Bains: Would that be that based on science, or is this also based on negotiations?

Hon. S. Thomson: That’s the 2.5 million cubic metres that has already been established by negotiation.

H. Bains: Then it goes on to say, subsection (2): “If a maximum allowable annual cut for the GBR forest management area is in effect on the date the AAC adjustment period ends, the maximum allowable annual cut ceases to have effect when the AAC adjustment period ends.”

So when it ends on December 31, 2026, does this mean that there may be an AAC maximum allowable cut determined two years prior to that, but you still have five years?

[1630]

It’s not based on just year by year; it’s based on a ten-year period. If, during this ten-year period, you allow a maximum allowable cut which goes beyond December 31, 2026, does this clarify that that AAC, then, will end on December 31, 2026? If the answer is yes, how would you determine AAC for the future time?

[ Page 12389 ]

Hon. S. Thomson: The maximum annual allowable cut, the 2.5, applies to the overall area for that ten-year period. Within that, there will be AACs for the different management units, for the TSAs within that area and the TFLs. That will be in place for the ten years.

Once the ten-year period is over, then the responsibility for setting the AAC reverts to the chief forester. The chief forester will do those determinations from that point forward. That amount could be less than the existing cap, or it could be more, depending on the analysis of what’s available.

For the ten-year period, the maximum is the 2.5 million cubic metres. Then the role of the chief forester is reinstated at the end of that ten-year negotiated time frame.

H. Bains: I think the question that I was having…. I understand the 2.5 for the entire area for those ten years. But I’m talking about licensee by licensee.

If they are given AAC, a maximum allowable cut, during this ten-year period and if their cut control period ends, say, in 2024 and they go for another AAC determination for the future, what we’re saying here is that the maximum time that they will consider is going up to December 31, 2026. Anything after that will be determined, as the minister says, by the chief forester based on the science. It could be more. It could be less, right?

[1635]

Hon. S. Thomson: I’ll see if I can clarify and explain this. The AAC is set by negotiation for the ten-year period. Then that translates down to the licences in the operating under…. The combination of all of those licences and everything can’t exceed the 2.5 million cubic metres.

When the adjustment period ends and that negotiated period ends and the new AAC is determined and back within the role of the chief forester in setting that AAC, if there is a cut control period that straddles the time frame and the change, then they would complete the cut control under the level of the AAC and their licence that was determined previously. The new AAC would drive down to the licences, and then new cut control periods would be set reflecting the new AAC levels.

H. Bains: The minister says there are 2.5 million cubic metres of ACC within the GBR management area. What was the AAC before GBR comes into effect in the same area?

Hon. S. Thomson: It’s 3.3 million cubic metres.

H. Bains: So there are 800,000 cubic metres less AAC now than there was. Can the minister identify who’s losing the AAC in this exercise?

Hon. S. Thomson: Overall, as we pointed out, a 24 percent reduction. The reductions vary. We’ll consider each management unit’s forest profile; species that grow at the different rates; relative amounts of old growth, second growth; the amount of timber that is economically available for harvesting. Also, we’ll reflect the impact of where the special management areas are put in place by agreement.

It’s not proportional. The reductions will vary and consider each management unit, and the discussions are underway and continue with the licensees on how that will be set out for each of the licences in the area.

[1640]

H. Bains: Perhaps the minister could explain. AAC is one thing. What traditionally was the harvested volume in the past few years?

Hon. S. Thomson: As the member opposite knows, harvest activity moves up and down, reflective of market and economic conditions. But I think it’s fair to say that within the area, licensees have been adjusting and recognizing the changes that were under negotiation and under discussion. The average level of harvest in the last number of years is probably reasonably close or reflective around the 2.5 million hectares, varying from year to year but within the range of the new AAC that is being established or negotiated for the area.

H. Bains: Well, average is one thing. But if they’re able to harvest close to the AAC in a given year, it can be argued that it can be harvested every year, given all the different market conditions and the other conditions that are necessary to meet the harvested level — closer to the AAC.

What I’m trying to determine here is that there is 800,000 cubic metres of reduction. You’re looking at close to 100 jobs there. Will it impact on jobs? How many jobs will be lost as a result of this?

Hon. S. Thomson: As I pointed out, the harvest levels have been generally in the range of the amount of AAC that’s currently set by negotiation. We’re not anticipating any job losses as a result of this agreement. Companies have been involved in the process, adjusting their operations because of the disputes and the challenges in the area.

In our view and in the view of the companies, and as all part of the agreement…. I think what we have done by having the agreement providing the certainty, we’ve actually preserved and protected jobs and economic activity in the area by providing that certainty for the forest companies as part of the agreement. That was a key piece for them in the agreement.

H. Bains: Will those licensees who will see a reduction in their AAC as a result of this bill be compensated?

Hon. S. Thomson: No. The provisions here follow the provisions of the Forest Act. Adjustments in annual al-

[ Page 12390 ]

lowable cut are not subject to compensation. But there will be compensation provisions negotiated in those areas where the special management forest areas are determined — that impact harvest in those specific special management forest areas. Compensation would be provided for those because you’ve taken that area out of the commercial harvesting areas with those provisions.

[1645]

So there will be compensation negotiated in some of those special management area designations, but generally, no.

H. Bains: Will the compensation be based on the AAC level reduction, or will it be based on the harvested level, then — if there is any reduction in the harvested level? I’m looking at if there is an AAC and then their AAC reduction is a certain amount…. As the minister said, traditionally, they have been close to 2.5 million cubic metres, which means that there is no reduction in harvested level. Will their compensation be based on their traditional harvested level or based on the AAC? If it’s on the AAC, why?

Hon. S. Thomson: Under this, it would follow the provisions of the Forest Act. In those cases, in the special management forest areas, it will be compensation for the rights that are being taken. It takes into account many factors, and it will be subject to a negotiation with each of the impacted parties in those special management forest areas.

H. Bains: But we have a special rules here. An AAC determination is by cabinet. Normally, it is by the chief forester, because it is a negotiated deal. Again, when it comes to compensation, the minister wants to go back to the Forest Act and apply the Forest Act to determine the compensation.

If there is compensation…. I agree that, traditionally, if there is a reduction in the AAC, there is compensation. But here we’re talking about an area that, traditionally, they never harvested to the AAC level. It is actually at the level that is going to be the new AAC, and they have traditionally harvested at that level. So no one is losing anything.

My question is: how do you negotiate in this deal that they still are allowed compensation?

Hon. S. Thomson: Again, just to reiterate that the process here follows the provisions of the Forest Act. When there are fluctuations in AAC, we don’t pay compensation. What the situation is here in the special forest management areas is that it is, essentially, a taking. It’s an area where companies had harvest rights in those areas, because it was part of their area. We’re taking part of that to meet the interests and to set the special management areas, so that will be subject to the negotiation.

I said there’ll be a lot of factors that are part of that negotiation, but it is a negotiated process. It’ll depend on whether there had been activities started in the area, what the historical practice had been in the area and everything. That’s the standard process that we go through, on the compensation side of it, under the Forest Act. The same provisions apply here because it is a taking of an area where there were established harvesting rights.

[1650]

H. Bains: Can the minister explain which companies actually will be facing reduction in their AAC under that scenario?

Hon. S. Thomson: Maybe I can just get some clarification. Was the member opposite asking which licensees in the whole area will have an AAC reduction? If that’s the case, it is all licensees, because there’s a reduction in AAC for the total area. As I said, it’ll vary, but all licensees will see an AAC change or adjustment.

If you’re referring to the special management areas, then that’s a different question in terms of which licensees are impacted by the establishment of the special management areas. So maybe I can clarify what the member opposite was looking for.

H. Bains: That’s the question: the special management area. Which companies are impacted by that, and who would qualify for compensation?

Hon. S. Thomson: In the areas with respect to the special management forest areas…. Just to qualify this, the takings haven’t been done yet. They’re the proposed areas. They’re generally known, the boundaries of where they are, but at this point, it would probably be — in terms of the list of companies that would be impacted, of which there will be negotiation processes: TimberWest, Interfor, Western, Sonora and SWC Holdings.

H. Bains: From the combined list, how much AAC is the total, if there’s a total reduction for these companies together? Or is there is a list of the breakdown for each company of what their reduction would be in this situation?

Hon. S. Thomson: In these areas, the amount of volume impacted is not known yet. It’s part of the negotiation process, and it will vary in each of those situations. That’s part of the negotiation process.

[1655]

Once the taking is done and the areas are finalized, then those negotiations take place in order to determine what the appropriate compensation is in each of those areas.

I should add that there was probably one additional company in that list I provided earlier that I missed, which was Canadian Overseas.

[ Page 12391 ]

H. Bains: The minister knows that Interfor consistently argues that they cannot run their mills on the coast because they don’t have enough timber. They are one of the companies that will be seeing a reduction. How will it impact their mills?

Hon. S. Thomson: Each company will manage the process as the new AAC determinations come in. I can tell you that from Interfor’s perspective…. I’m, hopefully, not putting words in their mouth. They’re saying that given the certainty that this provides now, given the opportunity — because there will be increased opportunities for First Nations participation in the forest sector through this — to solidify the areas with B.C. Timber Sales, they believe they will be able to make up any impacts through those additional opportunities.

What they’re telling us — they were all part of this agreement through the industry representation in the joint solutions project — is that the increased certainty in the area for that time period is beneficial for their company.

H. Bains: I could see that they would be benefiting as part of the compensation they are receiving. Did the minister, during negotiations, get any commitment, any assurance — from Interfor, especially — that they will not use this as a reason to have more curtailments or reduction in production in their manufacturing plants?

Hon. S. Thomson: The industry has said through the process…. And if you know the history here with the market campaigns…. All the companies that have participated in this process, been part of this agreement, take the view and the position that the certainty going forward is beneficial for their operations. That’s why they worked so hard to be part of the agreement, why they worked so hard to achieve the certainty on the land base that will give them those longer-term operations. All say that it’ll be beneficial for their operations.

H. Bains: Obviously, there’s a reduction in their AAC, and they are saying that it should actually enhance their opportunity to continue to operate their mills.

If there is any job loss, whether it’s on the logging side or the manufacturing side, will they also be entitled to compensation, as the company is, under this circumstance?

Hon. S. Thomson: Again, as I said earlier, we’re not expecting any job losses. The increased certainty, which they’ve all been part of…. They were all part of the agreement, part of the process, part of the announcement and stood with environmental partners, with First Nations, to applaud and recognize the importance of this agreement. They’re all saying it’s beneficial for their companies.

[1700]

H. Bains: I understand that it’ll be beneficial to the company. They may be getting compensation for timber that they never harvest. According to the minister, traditionally they harvest only around 2.5 million cubic metres, although the AAC, in the same area, is 3.3 million cubic metres.

My question is: if Interfor…. I’m just using that as a name; I’m not picking on that company. If Interfor, after getting the compensation — because they’re receiving a reduction in their AAC in this special management area — ends up laying people off, will they then share that compensation with the employees in addition to what they’re entitled to under the collective agreement?

Hon. S. Thomson: Those decisions are internal to the company, but what’s important to point out is that within those special management areas, that is a very limited amount of volume in those areas that’s subject to that. The certainty around the 2.5 million hectares of opportunity in the balance of the Great Bear Rainforest area gives them that additional certainty around the amount of harvest that they will have.

I’m not quite sure where the member is going with this line. If he had talked to the companies, and I know he does, he would hear from them all that the certainty, the provisions, the ten-year certainty in the area is all positive for their operations and gives them the security that they can work in the area that will be under new ecosystem-based management provisions — but all beneficial for their operations.

B. Routley: My question is to try and clarify the volume of working forest land base that was lost as a result of this agreement. Prior to the agreement, what was the area in hectares of the working forest land base, including all of the licences that were involved, and what is it reduced to now? What’s the new number in terms of the reduced number of hectares? And could we have that in both hectares and the percentage reduction?

Hon. S. Thomson: I just want to check here and confirm which

section we’re on.

The Chair: We’re on

section 7.

Hon. S. Thomson: Okay. Thanks. I’m not sure the questions relate at all to the

section that we’re currently on. I’ll just make that point.

In response to the specific question, I don’t have those figures available or handy here. It’s something we could follow up and provide as a follow-up, but I don’t have that specific information to respond to that question here.

B. Routley: Okay. Well, thank you. What I am getting at is directly related to the AAC adjustment period and how we got to an AAC adjustment at all. We once had a

[ Page 12392 ]

larger land base, the total — what I would refer to as the working forest land base.

[1705]

I’ve seen various figures given on websites about the amount of area that has now been taken out of what was the working forest land base and what is now left in the working forest land base. That’s what I’m interested in finding out. I think there are numbers around somewhere of the total loss. I think the government announced that they were giving up a certain percentage of the land base. I’m sure the minister knows how many hectares were given up for the use of harvesting.

You may not know, precisely, the special management areas loss yet, because it sounds like that’s still a matter of some negotiation and discussion. But the reason that’s important to me is that I’m trying to determine in my own head: has there been a larger reduction? It sounds to me like there has, okay?

Here’s my premise. My premise is: it sounds like there has been a larger reduction in the working forest land base that allows for a cut of 3.3 million cubic metres. Now we’ve come to this, now 2.5. I’m trying to determine whether 2.5 is a larger AAC than would normally be allowed by the chief forester for a ten-year period, and after ten years, it’s going to come down rather dramatically. I think the people of B.C. are entitled to know that.

Certainly, all of us would like to know exactly what is happening in terms of the intent of the negotiations that went on, because I’m not clear. For example, it sounds to me, in oversimplistic terms, that the new 2.5 million could be interpreted as, on average, a cut of 250,000 cubic metres per year. Over ten years, that’s roughly 2.5 million cubic metres. If all of the players were doing their AAC, and they were doing their average, I assume that’s what the average AAC per year would be.

But again, I’m not clear, backing up to the percentage reduction of the working forest land base, whether the remaining land base is sufficient to afford a cut of 2.5 million, or is that actually part of the negotiations? Is what was on the mind of the bargainers…?

I certainly don’t know that, but I think, in this House, we’re entitled to explore what the intent was. Was it to keep the cut at the highest possible level for ten years, knowing that it was going to have to come down dramatically to deal with the loss of the overall land base? Certainly, it sounds to me like it’s larger than a 24 percent reduction.

What I thought I heard the minister say is there has been a 24 percent reduction in the AAC from 3.3 million hectares down to 2.5. That’s what I heard: a 24 percent reduction in the AAC. But what was the actual reduction in the land base? Was it 50 percent? Was it 85 percent? I’ve heard some people talk about figures like that.

Can we get some kind of clarity on whether this was a negotiation to keep the cut up for ten years? Is there an expectation that it’s going come down rather dramatically after it comes out of this ten-year period?

[1710]

Hon. S. Thomson: As I pointed out earlier in my comments, the chief forester…. While the AAC is being set through the negotiation process and set by the Lieutenant-Governor-in-Council, the chief forester was involved in all the analysis and work that was done to support the 2.5 million cubic metres for the Great Bear Rainforest management area.

While the technical teams were doing all of that work around the technical side of it — did forward projections — and while they can’t…. That work will be done by the chief forester after the ten-year period. I’m advised that they are not projecting any significant reductions in the AAC in terms of the 2.5 million cubic metres. Again, that’s….

You can’t say that for sure, because there may be other factors that come in, in terms of disease or other factors. But the projections are that the 2.5 million cubic metres set for this period, with chief forester support in terms of the analysis and the technical teams involved — industry and the environmental organizations and all of that determination…. They’re not expecting significant reduction once the process goes back to the chief forester.

B. Routley: I think the minister suggested that he didn’t have some of this information at this time. Could I get a commitment from the minister that he would find out how many hectares were in the working forest land base prior to this agreement and how many have been taken out or lost, either with or without the special management areas? And what percentage of the total overall land base has now been taken out of the working forest land base? If I could get that somewhere down the road, I’m happy with that.

Hon. S. Thomson: Yes, I think we can undertake to provide that.

Sections 7 and 8 approved.

section 9.

H. Bains: It seems to me — and maybe the minister can explain — we are talking about the adjustment and the partitions here. There seems to be some conflict here that the subsection….

If you look at (1)(

b) and (c), it seems to me that certain areas within the GBR…. It allows the land to be designated a timber supply by the cabinet. That is as if they were made under the Forest Act. But then again, it expressly prohibits the minister from designating a timber supply area within the GBR. Am I reading correctly, or is that something that is not the case?

[1715]

[ Page 12393 ]

Hon. S. Thomson: Can I just clarify with the member opposite the

section that he was referring to — which section? I thought we had passed

section 8.

H. Bains: No, I’m on

section 9. Sorry.

What I’m looking at here…. I did have that question, but then I was able to clarify that myself. But, on

section 9, will there be any potential gap between the end of the AAC adjustment period and, then, the chief forester determining new AACs — of up to five years? Will there be any gap in between that period?

Hon. S. Thomson: Just to confirm the process here, it’s our intention that the chief forester would start the work before the end of the adjustment period so that there would be a seamless transition to the new AAC set by the chief forester. I guess, theoretically, the situation could exist if there were priorities in other AAC determinations in other areas around the province. There potentially could be a gap, I guess, from an actual operational perspective.

If that were the case, then the AAC that was determined in the adjustment period would continue until the new AAC is set. The intention is to have a seamless transition and have the work started so that you would have a new chief forester set AAC determination once the ten-year adjustment period is over.

H. Bains: But the act is the act. You can’t say: “If this happens, then it will continue” or “No, we will try to have the chief forester start working earlier on so that we have a seamless transition.” I mean, there has to be some definitive language in here.

We know the language here. It says December 31, 2026. That is the end period. That’s the last date. But my question again is…. The minister said there could be a potential gap between when the chief forester comes in and starts to allocate the new AACs. The minister also says that in that situation, the existing AAC will continue on, which means it could go beyond December 31, 2026, although it clearly says that it ends on that date. There are two different

interpretations here.

[1720]

Hon. S. Thomson: If the member looks forward to

section 10 around the AAC status, the provisions are there that the AAC specified by the Lieutenant-Governor-in-Council for that area remains: “When the chief forester, after the end of the adjustment period, determines an annual allowable cut for the area referred to…(

a) the AAC specified by the Lieutenant Governor in Council for that ceases to have effect, and (

b) the annual allowable cut for the area is the AAC determined by the chief forester for that area.”

That’s where the provisions provide for the AAC set by the Lieutenant-Governor-in-Council to carry until the chief forester sets the new AAC. But the intention, and the intention has been in all of the discussions, is that the work would start before the end of that period, and a new AAC would be set by the chief forester.

H. Bains: But if you read carefully, (3)(

a) says that “during the AAC adjustment period, the chief forester must not determine an allowable annual cut for that area.” Then it goes on to (b), which says that “within 5 years after the end of the AAC adjustment period, the chief forester must determine an allowable annual cut for that area.”

It gives you exactly the time here — that up until December 31, 2026, the chief forester must not determine an allowable annual cut for that area. Then it goes on to say that within five years after the end of AAC adjustment period — which means after December 31, 2026 — the chief forester must determine an allowable annual cut for that area.

That’s the confusion here. How do you determine, on the one hand, that the chief forester will not be able to determine up until December 31, 2026, but then it says that within five years after that, he is to determine? So there could be potential gaps. If there is a gap, how do you govern that particular area, then?

Hon. S. Thomson: The provisions, to clarify this, for the adjustment period, the ten-year period — that’s part of the negotiations set by the Lieutenant-Governor-in-Council.

[1725]

That doesn’t mean the chief forester can’t start or work in determining what a new AAC might be or would be following the end of that adjustment period. The intention is for that work to start during that time period — to do the analysis and the work so that you would have a seamless transition into a new AAC post the adjustment period.

The status provisions that are in

section 10 provide for the AAC set by the Lieutenant-Governor-in-Council to continue in that time frame if the chief forester hasn’t completed the work and hasn’t set the AAC, the new number, for that time. That covers off that eventuality, in the case that there is more detailed analytical work that needs to be done, or anything like that.

So we’ve covered off the provisions, but I can say that the intention is that the work would begin and that nothing prevents that work from starting and being done so that there is a seamless transition to the chief forester’s determination following the negotiated time frame for the set AAC by the Lieutenant-Governor-in-Council.

H. Bains: I think that probably is what is going to happen, but the language is a bit loose here. It doesn’t say that the chief forester will make the determination effective the last day of the AAC adjustment period. It

[ Page 12394 ]

doesn’t say that. It says within five years. That’s where the confusion is here.

The minister is saying that the AAC adjustment period under this agreement ends December 31, 2026. We’ve got that established here, and the AAC determined by the minister applies. But is the minister saying that the chief forester will make the determination effective January 1, 2027 — that all AAC then will be determined effective January 1, 2027, by the chief forester?

If that’s what the minister is saying, then I think it can work. But right now there’s a potential gap here. So what is it, Minister?

Hon. S. Thomson: What I’m saying and what the provisions are is that the negotiated AAC is set for the adjustment period, set by Lieutenant-Governor-in-Council. The provision is that the chief forester resumes authority at the end of the adjustment period for setting AAC. But what it doesn’t say is that she has to set that AAC on that date. That’s the intention, to provide that smooth transition.

What we provided for are provisions that if, in doing the analytical work and everything, the chief forester, whoever it may be at the time, is not ready to set that determination on that date, her authority resumes, but the AAC set by the Lieutenant-Governor-in-Council continues until he or she actually makes that determination. The provisions are that she can’t do that before that ten-year period. She can do it afterwards.

The intention is that we’d have this smooth transition, but with

section 10, we’ve provided for the circumstances under which the work may not be completed, may not be in a position to set that for the beginning of 2027. We’ve covered off all the eventualities, but the intention is to have a smooth transition.

[1730]

H. Bains: I’m sure there are a number of lawyers that were available to put the language together so that the true intention of the minister was reflected in the language. It isn’t. Even when you go to

section 10, it says: “When the chief forester, after the end of the AAC adjustment period, determines an allowable annual cut for the area referred to in subsection (1),” that’s when “the AAC specified by the Lieutenant Governor…for that area ceases to have effect.” It says “after.” It doesn’t give any timelines. It doesn’t require that it will be on that date.

If that’s the case, will the minister go on record and say that the intention is what the minister has said — that effective January 1, 2027, the AAC determination will be in place, determined by the chief forester?

Hon. S. Thomson:

Section 9(3)(

b) says that the chief forester must, within five years after the end of the AAC adjustment period, determine the annual allowable cut within that. That’s the provision — that it must happen within that time frame.

As I’ve said, we’ve provided for the circumstances to allow that in the event that the work is not completed. What we didn’t want to do was force the chief forester to have to have all of the work done. Maybe it’s not complete. You don’t want to be forced into a position where you’re making that determination without all the complete analysis and information so that you have a gap where you wouldn’t have an AAC in place because the previous one, the Lieutenant-Governor-in-Council-set AAC, ended and you didn’t have a chief forester determination. Then you really would have a gap.

What the provisions are is to have that be able to be extended until that AAC is set. The intention is to start the work beforehand to have the smooth transition. But we wanted to make sure in the legislation that we had that flexibility covered, that you didn’t force it into that position in the event that there were circumstances that left the chief forester in a position where she or he didn’t have all of the work completed in order to be able to do it.

The intention is to start the work so that you can, but we wanted to make sure we covered it. And she must do it within the five-year period. Given the fact that the chief forester assisted in setting the sustainable harvest rate for that period and, as I said earlier, all the work going forward, we expect that the long-term sustainable cut can be in and around that area, although that will be the chief forester’s determination.

We don’t believe we put forest sustainability at a risk by having that provision that the existing AAC can be set by regulation, can carry for a period of time beyond that ten-year time frame.

[R. Lee in the chair.]

H. Bains: I don’t want to belabour this point too much. Again, it says, “within 5 years after the end of the AAC adjustment period, the chief forester must determine an allowable annual cut for that area” — within five years. It could, potentially, take four years before the chief forester determines the allowable annual cut for that area. What happens during those four years?

Hon. S. Thomson: The AAC set by regulation at 2.5 million cubic metres per year remains.

[1735]

H. Bains: So the AAC adjustment period, which was determined previously, which means the passing of

section 6…. And December 31, 2026, doesn’t mean anything, then? It is only a guideline, then, because it could be extended another four years, potentially, as the minister has said. I think that if that’s the case, then the minister should say that it could happen that way, that the AAC adjustment period could be extended another four or 4½ years because 9(3)(

b) allows the chief forester to take up to five years to make the determination for the same area.

[ Page 12395 ]

Hon. S. Thomson: Again, the 2.5 sets the cap for the time period during the adjustment period. There are AACs for the management units within that total area that can’t exceed 2.5. Once we go past that time period, it’s the AACs that are in place, in combination throughout the management units, that continue. That could be below the 2.5 if the Lieutenant-Governor-in-Council sets an AAC in one of those management units that’s lower.

Then the chief forester could come in and stage the process. She may look at one particular tree farm licence or timber supply area and set the AAC for that. That would be the one that would carry forward, and that may or may not be above or below the 2.5. The 2.5 cap stays for the ten-year period.

Sections 9 to 17 inclusive approved.

section 18.

H. Bains: Under

section 18, I’m looking at…. If the minister could clarify…. The company whose cut has been reduced by protecting the trees within the GBR — will they be given an area to cut outside of the GBR under this section?

Hon. S. Thomson: This

section provides the provisions that allow for allocating available annual allowable cut to other licences.

[1740]

It’s the apportionment decision. It provides the ability, in a new timber supply area, to provide unallocated annual allowable cut volume to additional forms of licences. You could make provisions and provide for some woodlot tenures, more First Nation woodland licences and, potentially, more community forest tenures. It’s the ability to apportion the cut in the non-GBR areas.

H. Bains: Can the minister explain, then: how will this affect the overall AAC in British Columbia, by making these changes?

Hon. S. Thomson: The AACs are done at management level. It won’t affect it.

Sections 18 to 20 inclusive approved.

section 21.

H. Bains: We debated Bill 12, which makes amendments to the Forest Act and amendments to this act to reflect those changes. This section, it seems to me, has the proposed amendments in Bill 12. Why aren’t those amendments being done now?

Hon. S. Thomson: The standard practice, as I’m advised, is that consequential amendments to other bills before the House are organized by the introduction date. As Bill 2 was introduced first, Bill 12 carried the consequential amendments. Bill 2 could not include the consequential amendments because Bill 12 was not before the House. But the fact that Bill 12 has passed sets up the appropriate consequential amendments so that when the bills are brought into force by regulation, those provisions in

section 12 that are the consequential amendments apply here.

Sections 21 to 23 inclusive approved.

section 24.

H. Bains: It says here that the chief forester must advise the minister if they think there should be a partition in the GBR. My question, then, is: how involved would the chief forester be in managing the GBR if they are not involved in setting the AAC?

It’s a cabinet decision, but then you bring in the chief forester to advise the minister if there should be a partition in the GBR. My question is: how and when do you involve the chief forester if the decisions on AACs are made by the cabinet?

[1745]

Hon. S. Thomson: What we wanted to do in this

section and why it’s here is to…. As you know, one of the chief forester’s key roles is forest stewardship. What we wanted to do was respect that expertise and advice, so we put in a provision that the chief forester can advise the minister to consider an AAC partition for the GBR area or a timber supply or tree farm licence area. Given the authority for the Lieutenant-Governor to specify the AACs necessary, which was in place to bring in the agreement, what we wanted to do is ensure that there was a continuing advisory duty for the chief forester, to advise the minister around the potential recommendations around partitions.

H. Bains: If you see right through here, there is the LGIC involved. That’s mentioned. Then there’s the minister mentioned. In here, the chief forester will be making recommendations to the minister, not to the LGIC.

My question is: what is going on here? When they go to the minister, not the LGIC, who actually will be…? The LGIC is the one that is making the decision on AAC. Why is that different? Why don’t the chief forester’s recommendations go to the LGIC rather than to the minister?

Hon. S. Thomson: This is the process. The chief forester advises the minister. That’s the process. It’s the minister’s responsibility to deal with the advice that’s provided and take that forward, through the process, through to the Lieutenant-Governor for regulation through the regulation process — so advisory to the minister. The

[ Page 12396 ]

responsibility for setting it will be by regulation through the Lieutenant-Governor-in-Council.

Sections 24 to 27 inclusive approved.

section 28.

H. Bains: Looking at

section 28, it talks about the LGIC may, by regulation, specify an area within the GBR or, using

section 8, outside the GBR, to harvest timber. My question is: shouldn’t there be more potential reasons for restrictions than just these?

[1750]

Hon. S. Thomson: This

section is all set up to deal with situations where we have the licences which, when the GBR area set in, were operating partly within the GBR and partly outside the GBR. For example, in the Kingcome and Strathcona areas, part of that will be now in the south portion of the GBR and the other sections will be in the North Island TSA. What this does is provide the provisions for the regulation to set the licence within the GBR area and the licence outside of the GBR area.

Sections 28 to 33 inclusive approved.

section 34.

H. Bains: It seems to me that the new authority will allow the minister to order an AAC partition at the licensee level. My question to the minister is: what sort of partition around different areas of the Crown land is envisioned, and would this be to protect wildlife or our natural ecosystem? Would that be part of that?

[1755]

Hon. S. Thomson: This section, 34, is the partition orders. The partitions can be set by regulation, by the Lieutenant-Governor-in-Council. This provides the orders provision, which allows the minister to order the partition of the licence. It is done….

They’re an important tool, and they deal with, for example, identifying upper limits of preferred timber that is available for harvesting — for example, cedar. These orders in this

section here are the mechanism by which partitions can be enforced.

Sections 34 to 44 inclusive approved.

section 45.

H. Bains: Here we’re talking about relief, the minister’s discretion to grant full or partial relief from the cut control penalty if the minister feels the contravention is related to the specified AAC volume assigned or an AAC reduction. Why does the minister feel that this provision was necessary — that the minister get the discretionary power to grant relief to those who contravene their AAC requirements?

Hon. S. Thomson: This

section provides a reasonable safety valve, should tenure holders find themselves facing a cut control penalty where the contributing factor was caused by a change that was beyond their control for which they could not have planned — for example, an AAC reduction that is lower than the volume already harvested. It provides that safety valve for those situations that may be beyond the control of the licensee.

H. Bains: Who determines that it was beyond the control of the licensee? Why wouldn’t there be any specific guidelines that the minister may be guided by before the minister could consider relief?

Hon. S. Thomson: As I said, this provides that reasonable safety valve. Each situation would be considered under the unique conditions, but it is to cover off those situations where those penalty provisions would be something that was beyond their control, for which they could not have planned.

The factors could include: was it a result of changes that they couldn’t have planned for — whether or not it would create an undue hardship that was unreasonable in the circumstances because of equity and fairness in a situation that simply didn’t arise because the company was not being diligent about their practices?

[1800]

If it’s something that was beyond their control, we wanted to provide the provisions or needed to provide the provisions that provide that ability for the minister to provide that relief under those circumstances.

H. Bains: So one of the criteria is hardship? If that’s the case, can the minister explain? If that’s part of the criteria, that if anybody could convince the minister that there’s a hardship case…. What does that mean by having to comply with the AAC? Just because the GBR is broad and everything else is fine and they claim hardship?

Hon. S. Thomson: It’s a consideration of a number of considerations that would be taken into account in that. The principle is that it would be where it is a situation that was beyond the company’s control where that created a hardship — where it was something that they could not have planned. I think it’s an appropriate safety valve to have under those circumstances.

H. Bains: It obviously seems to me that all or part of this new bill, Bill 2, is written by the industry, as usually is the case during the regime of this government. The industry can write anything to protect themselves. They

[ Page 12397 ]

don’t really care about the communities or the workers that work for them. And here are all the different loopholes left for the companies who will be compensated if they lose, if they face reduction in their AAC in certain circumstances. And here, if they don’t comply with the regulations, the minister will grant them relief, as long as they can claim hardship.

That’s the way this government works. I guess that’s what we are seeing here again.

Hon. S. Thomson: The overall intent of this legislation is to bring in the agreements that have been developed and negotiated with all parties at the table to provide that certainty for the industry, which I think the member opposite should be supporting and recognizing in providing that certainty for the industry.

This brings forward the principles and the provisions that are in the Forest Act under the same circumstances. Where there is a situation where it is beyond their control and there is undue hardship, in those situations where it is beyond their control, then I think we should have the provisions that provide for full or partial relief from those circumstances. Again, it provides that overall certainty for the company’s operations within this agreement.

Sections 45 to 49 inclusive approved.

section 50.

H. Bains: Under this section, 50, it says: “During or after th