British Columbia Committee Hansard (Blues) — Monday, May 6, 2019, p.m., Issue 248 (41st Parliament, 4th Session) (20190506pm-CommitteeA-Blues)
20190506pm-CommitteeA-Blues
British Columbia — Debates (Hansard)
Fourth Session, 41st Parliament
(2019) OFFICIAL REPORT
OF DEBATES
(HANSARD)
Monday, May 6, 2019
Afternoon Sitting
Issue No. 248
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
CONTENTS
Routine Business
Introductions by Members
Tributes
Sandy McPherson
S. Furstenau
Statements
B.C. Wildfire Service workers in airplane accident
Hon. D. Donaldson
J. Rustad
Statements (Standing Order 25B)
B.C. Police Association
G. Begg
B.C. Economic Development Association
C. Oakes
Emergency Preparedness Week
J. Rice
Bruce Johnson
D. Ashton
Kw’umut Lelum Child and Family Services
S. Malcolmson
Thrift stores
L. Throness
Oral Questions
Action on gas prices
A. Wilkinson
Hon. B. Ralston
T. Stone
Protection of old-growth forests
S. Furstenau
Hon. D. Donaldson
Government policies on forest industry
S. Bond
Hon. D. Donaldson
C. Oakes
J. Rustad
Point of Privilege
(continued)
Hon. D. Eby
M. Morris
Orders of the Day
Committee of Supply
Estimates: Ministry of Finance
Hon. C. James
S. Bond
P. Milobar
J. Thornthwaite
S. Thomson
T. Redies
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Education (continued)
J. Thornthwaite
Hon. R. Fleming
R. Sultan
N. Letnick
G. Kyllo
T. Shypitka
S. Sullivan
M. Lee
Proceedings in the Birch Room
Committee of Supply
Estimates: Ministry of Social Development and Poverty Reduction (continued)
M. Hunt
Hon. S. Simpson
J. Thornthwaite
Estimates: Ministry of Agriculture
Hon. L. Popham
I. Paton
L. Larson
B. Stewart
MONDAY, MAY 6, 2019
The House met at 1:35 p.m.
[Mr. Speaker in the chair.]
Routine Business
Introductions by Members
J. Yap: I’m delighted to welcome to the House today a number of visitors from
Richmond. Paul Tam, chair, and Allen Chan, vice-chair, of the ICONNBC
Business Association are with us today. With the two of them are a group of
their business association youth group leaders, who I’d like to name very
quickly: Wilson Miao, Chun Sha, YingXue Leona Li, Elizabeth Shushkovsky,
Vivian Nguyen, Leina Harrop, Jillian Heathe. Would the House extend a warm
welcome to these visitors who are with us today for question
period.
Hon. A. Dix: You’ll know that the Fallen Paramedics Memorial was established on May
6, 2015, as a lasting recognition of the role of ambulance paramedics in our
society, their sacrifice and their service. Members will know that the B.C.
Ambulance Service provincial honour guard will be standing vigil from 5 p.m.
today until 5 p.m. tomorrow. I encourage all hon. members in that time, over
the next couple of days, to visit and to themselves honour both fallen
paramedics and the role that paramedics play every day in our
society.
I also would like to welcome Lance Stephenson, the director of patient
care delivery for B.C. emergency health services, who joins us in the House
today.
S. Gibson: I want to welcome, on behalf of this chamber, representatives of
Tourism Abbotsford and Tradex. They are touring the building, had lunch with
you, hon. Speaker, and I know they’re really looking forward to question
period, one of the reasons they’ve come here to this place today.
I want to welcome Craig Nichols, Tourism Abbotsford; Daniel Laverick,
who’s the board president; Kayla Tielmann, of Tradex; Andrea Collinson, also
of Tradex; Stephanie Vandervelde and Jenn Laverick, all of Tradex. Please
join me in welcoming them with legislative energy.
Hon. S. Simpson: All members know and have commented on, on both sides, many times over
the years, the important role of constituency assistants, our staff back in
our constituencies, and the work they do to support us and, more
importantly, to support the people in our constituencies.
Over this week, the government-side constituency assistants are going
to be in Victoria, getting some training and some work. We do have a group
with us today of those constituency assistants. I’m sure they’ll be through
over the next few days, a number of them. I would just ask the House to
thank them for the work they do for the people of British Columbia in their
role, greet them and welcome them to the House today.
Hon. S. Fraser: Visiting us in the Legislature today is one of the most dynamic and
effective local leaders I’ve every encountered. Anyone who’s seen her in
action will agree. Will the House please join me in making Her Worship Mayor
Josie Osborne, from the district of Tofino, feel very, very
welcome.
Hon. H. Bains: In the House is a very, very close friend — I would say my mentor —
and no stranger to this House: Penny Priddy, who was the Minister of Women’s
Equality, Labour, Small Business and Tourism, Children and Families,
Education — I don’t know what’s left — and the only person who has been
elected to all levels of government — as an MP, an MLA, a city councillor
and to school board. Please, all of you, join with me and give a warm, warm
welcome.
Hon. K. Chen: I’m really happy to see my good friend Amber Keane, who is also in the
chamber, joining us for question period today. I’ve worked with Amber for
many, many years in the community. She’s also a former early childhood
educator who is passionate about child care issues. I would like to ask the
House to please make her feel very welcome.
[1:40 p.m.]
Tributes
SANDY M c PHERSON
S. Furstenau: I want to highlight that in Cowichan we have a tireless volunteer who
has been recently recognized with the province’s highest honour for her
dedication to betterment of our community. Not many can boast the number of
organizations Sandy McPherson has volunteered with. Not even she could tell
you the number of hours she’s contributed. She’s volunteered her time and
energy with at least a dozen different non-profit organizations and
government committees and once served as a municipal director.
What I’d like to say is that we were so delighted in Cowichan when
Sandy McPherson joined 23 other recipients of the B.C. Community Achievement
Awards, hosted at Government House by the Lieutenant-Governor of B.C. She
was selected from 150 applicants.
I’m proud to live in a community where someone like Sandy devotes so
much of her time and energy to making the Cowichan Valley a better place for
all of us.
Statements
B.C. WILDFIRE SERVICE
WORKERS IN AIRPLANE
ACCIDENT
Hon. D. Donaldson: It’s difficult for words to describe the depth and complexity of
the emotions that a terrible event from this weekend has generated, yet
it is important, in this chamber, to make an attempt, on all our
behalf.
Many of you have already heard about the tragic crash of a small
airplane on Saturday that was carrying four contractors working for the
B.C. Wildfire Service. The four people on board were conducting infrared
scans of sites where wildfires occurred in the Northwest fire centre
last year. About 8:30 a.m. on May 4, the Cessna 182 aircraft crashed
about 95 kilometres northeast of Smithers. With the assistance of the
Joint Rescue Coordination Centre and the B.C. Wildfire Service, the
crash site was located shortly before 11 a.m.
Unfortunately, three of the four people on board did not survive.
One person was transported from the site by helicopter and now is being
treated in a Vancouver hospital. That person is expected to
recover.
Our thoughts are with the family and friends of everyone involved
in this incident. On behalf of all British Columbians, I would like to
extend our deepest sympathies to the families of the three people who
did not survive.
The Transportation Safety Board, the B.C. Coroners Service and the
RCMP are investigating the incident to determine the circumstances that
led to the crash. The B.C. Wildfire Service staff are providing all
possible assistance to the investigators and will continue to do so in
the days and weeks ahead.
J. Rustad: It is with a very heavy heart, to respond to such tragic news.
Small communities throughout the north — throughout the province, of
course — are very closely connected communities. When there are losses
like this, it affects all of us.
I want to thank the folks in the B.C. Wildfire Service for the
work they do. We’re very fortunate across this province with all the
work that has been done, particularly to the high standards of safety
that they adhere to.
I was out just across Francois Lake on Saturday when the incident
happened. We were talking about fire preparedness. It was a crew that
was there from the wildfire service that were talking about the work
that these individuals were doing, out doing the assessment over these
fires to make sure that all the hot spots were being addressed, if there
were any, to help keep us all safe.
A tragedy like this, certainly, is very hard. Our thoughts,
prayers and our hearts go out to the family — and to the individual
recovering, of course — for a tragedy like this. I hope that we don’t
have any more news like this as we go into a summer season.
Once again, to the people that do this work, as well as to the
families and to all the people really impacted by this, our hearts go
out to them. My hope is that families will be able to recover from this,
as I know one of the individuals is from Burns Lake. One of the
individuals, I know, is from Smithers, and others.
Statements
(Standing Order 25B)
B.C. POLICE ASSOCIATION
G. Begg: “To protect those who protect others” is the noble motto of a
group that is spending time here in Victoria this week, meeting with
each other and with legislators here in the provincial capital to
advance the good work that they do and strategize for their future and
the future of the work that they do every single day of the year, 24
hours each and every day. The work that they do goes on without ceasing,
in every kind of weather and in every circumstance and condition that
you can think of, and sometimes in circumstances and conditions that you
cannot even imagine.
[1:45 p.m.]
Launched in 2008, the British Columbia Police Association is the
combined voice for over 2,500 front-line police officers in B.C.,
offering guidance, research and communication support on both contract
and other important issues affecting police officers across the
province. The representatives gathered here this week are tasked with
continually promoting the interests of their sister and brother officers
as they serve citizens in our communities. By doing so, they’re
improving policing service, public safety and the quality of life for
all British Columbians.
Police officers are on the front line every day and are key
partners in ensuring that residents across B.C. feel safe in their
neighbourhoods. They are responsible for crime and the fear of crime
everywhere in this vast and diverse province — from saving lives on the
front lines of the opioid crisis to combating gun and gang violence, to
comforting a child, to mentoring a young adult, to delivering tragic
news with compassion and empathy. These remarkable women and men have
dedicated their lives to helping others. They go into places we would
fear to go and do things that many of us simply could not bear to
do.
To those members of the B.C. Police Association: know that we
appreciate and honour the work that you do, and thank you for the
protective services you consistently provide in all of our
communities.
We appreciate that the BCPA continues to strengthen the solid
relationships that officers across the province have with the public,
local municipalities, our provincial government and all members of this
Legislature. We look forward to continuing to work in partnership to
develop concrete actions and objectives to increase safety for
communities across British Columbia.
B.C. ECONOMIC DEVELOPMENT ASSOCIATION
C. Oakes: This week marks Economic Development Week in British Columbia.
British Columbia Economic Development Association supports British
Columbia communities in achieving economic goals and objectives through
workshops, training and other resources to attract and retain
investment, focusing on Indigenous and regional economies. The
organization is also a major leader in economic disaster recovery,
activating the first such program in Canada in 2012.
As markets ebb and flow, B.C.’s Indigenous and regional economies
have had to undergo sudden and significant changes, especially taking
into account the natural disasters many have endured in recent years.
This is a difficult change, especially for resource-based communities,
which is why we are fortunate to have the BCEDA focus on resiliency and
recovery of distressed economies. These efforts are not limited only to
members but to any community that requires assistance.
While it is certainly important that new investment is attracted,
it is equally as important that older businesses continue to thrive. The
BCEDA understands this. A healthy and growing economy advances the
economic, social and environmental well-being of all British
Columbians.
For all the incredible things they do, I ask the House to please
join me in applauding the BCEDA. Check out their website for a list of
the activities happening across British Columbia this week, and show our
gratitude for their hard work in helping British Columbians.
EMERGENCY PREPAREDNESS WEEK
J. Rice: It is Emergency Preparedness Week in British Columbia and across
this country, a yearly event which reminds us of the importance of
preparing our households and communities for the unexpected. Recently
Tofino held a tsunami preparedness exercise, and soon Prince Rupert
students will be hiking to high ground with their own event, with more
emergency preparedness activities happening in communities throughout
the province. This week also presents an opportunity for B.C. residents
to build personal resiliency in case of an emergency, from earthquakes
to floods and fires.
PreparedBC is getting back to the basics with a focus on helping
people identify local hazards, make a plan, build a kit and assemble
grab-and-go bags. We know that taking these steps can help alleviate
stress and improve response outcomes in the event of an emergency. I
encourage everyone to visit PreparedBC on the B.C. government website
for more information.
[1:50 p.m.]
As fair warning to all members, the province will be testing the
Alert Ready system on Wednesday at 1:50 p.m. That’s this coming
Wednesday, May 8. Mobile phone alerts will be tested at the same time as
radio and television networks. This will give us the opportunity to make
sure the system is working correctly, allow people to ensure their
devices are compatible and updated and raise awareness about the
importance of emergency preparedness. These alerts will also build on
other alert tools in B.C., such as the provincial emergency notification
subscription text alerts, sirens or other alerting
mechanisms.
The past two consecutive flood and fire seasons were
unprecedented, and it’s a significant reminder that British Columbians
are vulnerable to many kinds of risk. I encourage everyone to take some
time this week to plan ahead for a potential emergency and create some
peace of mind in your own household.
BRUCE JOHNSON
D. Ashton: His best friend described him as a wheel with his friends as the
spokes, and I’ll say a big wheel and a hub with lots of spokes, and
always continually adding to that incredible, diverse situation with
individuals.
I met Bruce Johnson in the mid-’70s and his lovely wife, Jan, and
their incredible kids — Blaine, Kevin and Kelley — through a mutual
family friend — instant friendship. We went to the same university in
Washington state in different years. He helped me make up my mind which
school: Bruce, the larger-than-life football scholarship jock; me, the
quiet, nerdy science guy.
He came home as a teacher, became a vice-principal, a principal, a
combined career of over 34 years and a staunch education advocate —
sticking up for French immersion, sticking up First Nations, sticking up
for LGBTQ. If you were in a kid in the education system or not, Bruce
had your back. On top of that, all those years of really caring for
children and their education and their lives, he continued to give back
through two terms as a school trustee.
When the vote came to address the closure of three schools — from
a hospital bed right after a major cancer operation, on a conference
call to the school board meeting, in a soft voice reflective of his
physical pain and the consequences of the vote — he stated, “I vote no,”
the only trustee to oppose. Bruce had huge admiration for his fellow
trustees, the wonderful staff at the school board and his fellow
teachers, but as it was always, it was always what is best for the
kids.
Sadly, Bruce was not strong enough physically to attend a third
term for the 2018 elections. After years of incredible community
involvement, always willing to lend a helping hand, always seeing the
best in everyone and in every situation, we lost this wonderful
gentleman in March to that terrible disease, the disease that also took
his son Blaine in 1991.
Rest in peace, my friend. Wherever you are, I know that things are
organized and that all the kids are looked after.
KW’UMUT LELUM
CHILD AND FAMILY
SERVICES
S. Malcolmson: Last week Kw’umut Lelum and the Snuneymuxw First Nation held a
ceremonial homecoming for children in care to recognize and honour their
place in the Snuneymuxw community and help ground them in their land and
culture.
We were in the longhouse together. It was smoky. There were many
witnesses from all over the province. The children were blanketed. The
women drummed. The masked dancers, in their beautiful, loud, solemn
ceremony, grounded these children and blessed them on their journey
ahead. Chief Michael Wyse said to the kids: “This is your land. This is
your place.” Grand Chief Doug Kelly turned to the foster parents and
said: “It’s not your fault the kids were taken from their parents, and
we thank you for taking care of them.” It was beautiful and so
moving.
Kw’umut Lelum supports families to keep kids out of foster care
and with their families and culture. It used to be just for families on
reserve, while off-reserve families were served by our Ministry of
Children and Family Development. But in November, the NDP transferred
that responsibility to Kw’umut Lelum so that it can now serve Indigenous
families off reserve in Nanaimo.
Since their urban office opened, they are changing more lives.
Their staff told me:
“A baby was about to go into permanent care, but we came up with a
plan that gave the mother, who’s battling cancer, another chance.
Through her hard work, Kw’umut Lelum believing in her and supporting
her, she’s now at home with her baby girl, together.
[1:55 p.m.]
“This good work was able to happen because of this government’s
willingness to build relationships with Kw’umut Lelum, to work with
their own people, guided by their Coast Salish teachings and values.
From this, a baby is reunited with her mother.”
A lot of damage was done, and there’s much work to do. But we’re
committed to clearing the path so that good people like those at Kw’umut
Lelum can do this vital work.
THRIFT STORES
L. Throness: I want to give a tribute to thrift stores today. Recently I had
the honour of helping to open the new Home Décor store in Chilliwack,
which is the second thrift store run by the Bridge to Better Living
Society.
The society, under the dedicated leadership of Bryan Crogie and
Shirley Cahoon, helps to fund juvenile diabetes, the Cyrus Centre for
youth, a prison ministry called Better Life and the Ann Davis Transition
Society. It also does workplace training in concert with the Stó:lō in
Chilliwack and works with the clientele of the Chilliwack Society for
Community Living.
There are other thrift stores in our city with other charitable
ends. Hidden Treasures supports a ministry to men and women offenders
called M2W2. We have two Mission stores. A dozen of them across Canada
have raised millions for their mission to purchase bibles around the
world.
The Community Services Thrift Store in Agassiz funds the food bank
and many of its other programs, and we all know the incredible things
the Salvation Army does around our province and in our city, in part
funded by its thrift store. The Chilliwack Hospice Society has a thrifty
boutique. Our hospital auxiliary has a thrift shop, and the Mennonite
Central Committee has its own store. Value Village is a Canada-wide
for-profit corporation begun by the same family that started the
Salvation Army thrift stores. It has a strong social conscience, giving
back a lot to communities, including hundreds of jobs.
I love the concept of the thrift store which uses the principles
of the market for a positive social purpose, providing inexpensive
high-quality goods for those of lower income, but they have also become
trendy places for everyone to shop. Given the growing number of storage
unit companies, our thrift stores are guaranteed an abundant supply of
goods for many years to come.
I want to thank the passionate leaders and volunteers in our
community who do something great for someone else every day by working
in our thrift stores.
Oral Questions
ACTION ON GAS PRICES
A. Wilkinson: Well, the saga of gas prices continues, and the total inaction by
this government also continues. We’re now hearing from people whose
lives are dramatically affected by gasoline prices — truck loggers, taxi
drivers and volunteers. They’re telling us, in very clear terms, that
it’s having a detrimental effect in their lives. They’re worried about
their ability to make a buck. In the case of volunteers, it’s putting
them into an impossible position. The Volunteer Cancer Drivers Society
drives patients to and from medical appointments to deal with their
cancer.
Over a year ago, the Premier said, “We’ve talked about a range of
options,” yet we have seen nothing. We now see the members of government
trying to pass the buck amongst themselves as to who will avoid
answering the question. So the pain at the pump continues.
This government controls 35 cents a litre of taxation room that
could be made available to people like the volunteer cancer drivers.
When will this government at least tell us what the range of options has
been and is in the past year? Can you tell us anything at all about what
you have in mind?
Hon. B. Ralston: Well, the Leader of the Opposition is at it again. He is advancing
his proposal to reduce taxes, which UBC Sauder Business School professor
Werner Antweiler described as “a completely ineffective proposition. It
makes no economic sense.” He just mentioned it again. That’s the Liberal
plan.
Last year they were prepared…. The Leader of the Opposition said
that he was very much dedicated to the idea that you respect the
marketplace when it comes to setting prices — apparently not so much
anymore.
[2:00 p.m.]
But Professor Antweiler was last week’s critical commentary on the
B.C. Liberal so-called plan. Let’s have a look at what has come up this
week from the B.C. Business Report Card .
Interjections.
Mr. Speaker: Members.
Hon. B. Ralston: This assesses how different people and things — of course,
businesses — fared this week. Before I give the letter grade, let me
give the comments. “It seems pretty clear this is a desperate party
doing desperate things, like putting up billboards, rallying against the
carbon tax that, um” — checks notes — “their party started.” What was
the letter grade? F-minus.
Mr. Speaker: The Leader of the Official Opposition on a
supplemental.
A. Wilkinson: Well, here we have a government that was offering up options a
year ago, has been completely silent on what they are…. Now we’re being
offered….
Interjections.
Mr. Speaker: Members, we shall hear the question.
A. Wilkinson: The marquee sign is supposed to say “F-minus,” when it really says
“$1.729.” We see a few members opposite grinning from ear to ear. They
like the idea of high gas prices, because it will drive people out of
business and make them vulnerable to the necessary environmental agenda
of the Green Party, which is, of course, controlling the members
opposite.
This is what George McAffer says, with the Volunteer Cancer
Drivers Society, his quote to the media. “Every time it goes up a cent,
we pay a lot more money.” The Premier controls 35 cents a litre of gas
taxation. What do we tell George when the Premier has said: “If we’re in
a position to provide relief, we’ll do that”?
To anyone on the government ranks, what is that relief? When are
we going to see it, and what were these options from the last year?
Because for three weeks now, there’s been nothing but obstruction from
the other side.
Hon. B. Ralston: Let me repeat: “A desperate party doing desperate things.” Letter
grade, F-minus.
What’s very clear is that, obviously, gas prices have gone up 40
cents in the Lower Mainland. Of the increase of 40 cents, one cent — an
increase in the carbon tax — is due to government taxation. The other 39
cents have gone to the oil companies for their own profit and their own
costs. So the solution that’s proposed by the opposition is a complete
non-starter.
Interjections.
Mr. Speaker: Members, we shall hear the response.
Hon. B. Ralston: He knows that, yet he continues to repeat it.
T. Stone: Well, that is a desperate, vacuous and ridiculous response
deserving of an F-minus, I would suggest.
Now, these are the exact words of the Premier of British Columbia
from one year ago: “We are monitoring gas prices, and we will take steps
if necessary. We have talked about a range of options.”
Now we learn that the Premier is telling his deputy minister to
come up with a range of options. That shouldn’t be too difficult,
considering the Premier was apparently considering options a year ago.
Now even the Premier’s Energy Minister had this to say: “The Premier has
been working on this issue, and he’s looking into a variety of options
to deal with gas pricing.”
It’s been well over a year. Why won’t the pain-at-the-pump Premier
share with British Columbians what those options are which he was
considering?
[2:05 p.m.]
Hon. B. Ralston: The opposition has suggested a variety of positions. The Leader of
the Opposition in particular, at one point, suggested that somehow our
relationship with Alberta was to blame for the increase in gas prices.
But he admitted in an interview on one of the radio stations that there
was no link, not at the moment. That’s a fair point.
So any of the explanations and the policy propositions that have
been put forward by the opposition are completely without any merit
whatsoever. In fact, the Leader of the Opposition, when the government
of Alberta proclaimed Bill 12, said, and his position was, that British
Columbia should do nothing. That was his position.
Our position on this side of the House, led by our Attorney
General, is that we will fight that bill in court to the end of the
legal process rather than simply accept it, sit back and do nothing on
behalf of the people of British Columbia.
Mr. Speaker: The member for Kamloops–South Thompson on a
supplemental.
T. Stone: It’s this government and the Premier, in particular, who have
floundered from one ridiculous, phoney message to another.
Initially, the federal government was going to sort this out. Then
it was: “Let’s build a refinery somewhere in British Columbia.” Then it
was, “Perhaps we can encourage our Alberta friends to build another
refinery in their province,” only then, a day or two later, for the
Premier to suggest that it would be nice if our neighbours to the east
of us were to just send us a bit more refined fuel product.
It’s the Premier that has been flipping and flopping on this
particular issue, and all British Columbians know is…. If you live in
Kamloops — I drove down yesterday — it’s a buck-50 a litre, the highest
we’ve ever seen for regular gasoline in Kamloops. And, of course, we
know that gas is at record highs — in fact, highest of anywhere in North
America. It’s British Columbians who are taking it on the
chin.
Now on the weekend, someone did leap to the Premier’s defence,
saying: “Sometimes the Premier says things without actually thinking
through the ramifications of what he said. I think what he was doing is
thinking out loud.”
Who said that? Well, none other than the leader of the Green
Party, the Premier’s junior coalition partner, who also apparently
thinks that the solution to soaring gasoline prices in British Columbia
is for hard-working British Columbia families to remortgage their homes
so that they can take out a loan in order to purchase an electric
vehicle. Or the same party that just suggests to British Columbians:
“Perhaps you should walk more, or perhaps you should carpool
more.”
Interjections.
Mr. Speaker: Members, we shall hear the question. Thank you.
T. Stone: So the question is this. Was the Premier, as the leader of the
Green Party suggested, just thinking out loud, or was the Premier
actually evaluating options to address soaring gas prices, and if so,
what are the options?
Hon. B. Ralston: Well, the member from Kamloops may want to shop around in
Kamloops. I’ve been advised that at Costco in Kamloops, gas is $1.349 a
litre rather than a $1.50 a litre. That’s accurate information as of
today. Some of, perhaps, the research done by the members
opposite….
Interjections.
Mr. Speaker: Members. Members, it’s almost impossible to hear the
response.
Minister.
Hon. B. Ralston: Well, members can laugh at it, but that’s the price. That’s the
price.
The member opposite said $1.50. Costco has got $1.34. That’s a
pretty big difference. One would question, then, what the accuracy is of
the rest of the statements that the member from Kamloops is putting
forward.
[2:10 p.m.]
In our budget, the budget put forward by the Minister of Finance,
we tackle the issue of affordability for British Columbians. We
undertook a number of measures to increase the affordability of life for
British Columbians. We took the tolls off the Port Mann and the Golden
Ears bridges. By the end of this year, we will have eliminated MSP
premiums — $900 for an individual, $1,800 for a family. We have
initiated a major social program of child care, which is making a real
difference in the lives of families and children across this
province.
PROTECTION OF OLD-GROWTH FORESTS
S. Furstenau: It was a little hard to hear what was going on down here, so there
was some confusion.
Interjections.
S. Furstenau: That was just an impartial, objective observation, hon.
Speaker.
Today the UN released a report on the devastation of nature. Over
one million species are currently at risk of extinction, and habitat
loss is the driving factor. According to this report, nature is at its
worst shape in human history. Habitat loss not only endangers animal
species but our own ability to grow food and safeguard drinking water.
The report states unequivocally that we are threatening humanity’s
capacity for survival.
Yet here in B.C., this government is continuing to facilitate the
logging of old-growth forests. B.C.’s coastal old growth has incredible
ecological value, and it is globally rare. We’ve already logged 90
percent of the high-productivity old growth on Vancouver Island, and
we’re actively continuing to log these ancient forests, with no end in
sight. Well, there is an end in sight. It’s when they’re all
gone.
Old-growth forests sustain wildlife and increase biodiversity.
Many species can only live in old-growth habitats — those species that
have been identified as at risk for extinction.
To the Minister of Forests, Lands and Natural Resources, we have a
moral responsibility to leave our children a healthy environment. Will
this government make protecting old growth on Vancouver Island a
priority?
Hon. D. Donaldson: Thank you for the question, an important topic. Our government is
committed to protecting the important biodiversity of old-growth
forests, as the member alluded to and pointed out in different studies.
Over half of B.C.’s old-growth forests on the coast are already
protected. We’re also committed to ensuring a continued, vibrant and
innovative forestry sector.
There’s a variety of perspectives on harvesting in old-growth
areas. The Minister of the Environment and myself met, just in January,
with representatives of the Ancient Forest Alliance, the Sierra Club and
other environmental non-government organizations. Our staff met again
last week with those groups and have another meeting scheduled for
June.
I was also able to visit many of the communities in north
Vancouver Island a couple of weeks ago, where I spoke with local
government leaders and those in charge of community forests, who see the
benefits of harvesting old growth come back to their communities in many
ways. So they see the importance of those harvesting
activities.
We are working on a new old-growth plan. We will be engaging with
First Nations communities, labour and environmental groups to complete
that plan. We’re also looking at ensuring there are fair solutions for
workers and communities as we move from old-growth to second-growth
harvesting.
Mr. Speaker: House Leader, Third Party, on a supplemental.
S. Furstenau: It’s interesting that many of those groups that the minister
speaks of have been reaching out to us, raising the alarm about the B.C.
Timber Sales proposal for harvesting of the old growth in the Juan de
Fuca area. It is easy to say that old growth is protected, but it’s not
completely factual, because of our remaining endangered old growth, the
highly productive areas — those that are in the valley bottoms and still
reasonably intact — are also actively being logged.
Last week hundreds of students were standing on the front of the
Legislature, demanding that we listen to them because the climate change
is an emergency. My office received 1,500 emails this last week asking
that Vancouver Island’s old growth be protected. My colleague from
Saanich North and the Islands has received 18,000 emails in the last
year.
[2:15 p.m.]
To the Minister of Forests, Lands, Natural Resources, we are in a
climate emergency, and in light of this emergency, how does this
government justify the continued logging of old growth?
Hon. D. Donaldson: Thank you to the member once again. The member referenced a B.C.
Timber Sales timber sale advertisement around the Port Renfrew area.
That timber sale was not advertised until there had been consultation
with the Pacheedaht First Nation, with B.C. Parks and with others about
the impacts of that logging.
Having said that, there was the potential for some legacy trees
identified by environmental non-governmental organizations, so B.C.
Timber Sales has delayed the awarding of that sale until the issue is
further examined.
We value the biodiversity that’s supported by old-growth forests.
We also value what old-growth harvesting does for communities on the
Island. When I visited those communities in north Vancouver Island —
Port McNeill, Port Hardy and Port Alice — a presentation from the
community forests that those three communities hold demonstrated that
the return from harvesting old growth in a manner that follows all
guidelines put money into the coffers of those communities so that a new
roof could be put on the curling rink. We visited that curling rink.
That roof would have never been able to be afforded if it hadn’t been
for the harvesting of old growth.
Old growth provides direct employment for 24,000 people in the
forest sector. We’re going to be embarking on a plan around old growth
with First Nations, with workers, with industry and communities. We know
the value of old-growth forests. We’ll be undertaking that process in
the near future.
GOVERNMENT POLICIES ON
FOREST
INDUSTRY
S. Bond: Every day more concerns are raised about NDP forest policy causing
significant uncertainty leading to job loss. First, the Premier sat and
watched his minister make an absolute mess of the caribou file. It
caused nothing but anger and resentment in communities across the
province. What did the Premier do? He had to call in a third party to
try to fix the mess.
Now with forest policy, the exact same thing is happening. No
consultation to key changes to the forest sector.
Will the government today stand up, press pause and ensure that
industry and communities are properly consulted?
Hon. D. Donaldson: If the member is referring to the Interior process to revitalize
the forest sector, we’re certainly engaging with communities in the next
round of process. The fact is that we’re addressing the issues that were
kicked down the road by the previous government.
They knew concentration in the forest sector wasn’t good for
communities, wasn’t good for First Nations, and they did nothing about
that. They knew the pine beetle impacts on the annual allowable cut were
coming, and they did little for communities to prepare for that. They
knew the caribou recovery was going to be an issue and didn’t take
federal legislation seriously, and those impacts are being felt by
communities now.
We created a coast forest sector revitalization initiative in
consultation with industry, with labour, with First Nations. We’re
creating an Interior forest process that is going to address the impacts
of the pine beetle that they failed to address. And we created draft
partnership legislation that’s going to help protect caribou and protect
jobs.
That’s the difference between this side and that side. We care
about communities, we care about First Nations, and we care about
workers.
Mr. Speaker: The member for Prince George–Valemount on a
supplemental.
S. Bond: Well, the difference between that side of the House and this side
is that we recognize that we need to support and work with the people
who actually create jobs and sign paycheques in communities where we
live.
[2:20 p.m.]
The minister can stand in the House and read off lists of things,
but let’s listen to what key leaders in the forest sector had to say.
Last week it was West Fraser and Teal-Jones. This time it’s Don Kayne of
Canfor who says: “The competitiveness challenges that we face in B.C.
are severe… with Bill 22 and the OIC and caribou and softwood lumber.
All those are things we are faced with.”
Let’s try this again. To the minister, will the government listen
to the significant concerns that are being expressed, and will they
press pause and take the time to consult with industry and
communities?
Hon. D. Donaldson: Well, of course we’ve been listening to communities and listening
to the forest sector and the forest industry. That’s why we’re
implementing the changes that we’re implementing. We care about forest
communities, about the future of forest communities, about First Nations
involvement in the forestry sector and about industry. That’s what the
changes are all about. We’ve been making them because the other side,
when they were in government, ignored it and kicked the can down the
road.
C. Oakes: Let’s be clear in this House what industry is saying. West Fraser
is the largest employer in my community. This is what they have to say:
clear here. They are making decisions without consulting with industry.
They need to understand the impacts that this will have on industry, on
communities and on employees. We are very concerned.”
To the minister, there has been zero consultation. Will the
government press pause and consult?
Hon. D. Donaldson: Well, the member might want to get her facts straight. There has
been consultation with major industry, including West Fraser, especially
when it came to the draft caribou partnership agreements. There were
over six meetings between industry and representatives from my ministry
before those draft documents were released on March 21.
We also have a process that the Premier has initiated around
revitalization within the Interior. We’ve challenged the industry to
lead that process, to provide some solutions, to call together
communities, First Nations, other tenure holders and workers at a TSA
level — never done before at a TSA level — to come up with solutions.
We’re also embarking on a policy initiative with Interior stakeholders.
We’ve got a lot of things going on.
As far as employment goes, well, the member ought to know that in
her own town, Quesnel, the Quesnel Cariboo Observer recently
reported that the unemployment rate was the lowest ever, under this
government, in 43 years.
Mr. Speaker: The member for Cariboo North on a supplemental.
C. Oakes: It wouldn’t be so embarrassing if the minister was a little bit
more on top of his file. What industry is clearly saying…. This
government is bringing in policies that are going to have absolutely
detrimental effects on communities, and I can say to this minister that
life is not more affordable when you lose your job.
We are talking about significant job losses as a direct result of
the Premier’s actions. You may want to look at the consequences of Bill
22. This is what Ted Seraphim, of West Fraser, said: “What gives us the
greatest concern are the myriad of policy changes that the B.C.
government is planning…. It puts the whole British Columbia industry on
pause.”
Instead of putting the industry on pause, why doesn’t this
government and this Premier stand up and press pause on its
policies?
Hon. D. Donaldson: Well, talking about putting things on pause, that side, when they
were in government, put on pause 30,000 jobs in the forest
sector.
[2:25 p.m.]
We are concerned about the future of rural communities in the
Interior. That’s why we’ve launched a process to bring together
industry, labour and First Nations in a TSA-level process. We have
launched that already. We’re about to embark on a policy engagement
session with other stakeholders to make sure that there’s viability in
towns.
But that’s not all. We have a wide variety of efforts in order to
make communities in rural areas viable and attractive for people to
come. The first urgent care centre in Quesnel has been announced by my
colleague the Minister of Health. We’ve got the redevelopment and
expansion of hospitals in Dawson Creek and Williams Lake. We have the
first-ever, 280-seat civil and environmental engineering program
announced at the University of Northern British Columbia. These are
substantial and practical efforts to make sure that northern and rural
communities are resilient and vibrant into the future.
J. Rustad: On May 2, Western Forest Products announced: “We have resumed
export log sales. We expect our first shipments to occur in May, and
another in June.” We have Western now also looking at reducing its
milling capacity because it can’t access logs. We’re having, of course,
the restarting of the log exports. The monthly average number of coastal
cutting permits has been dropped by 40 percent.
Everywhere we look our forest industry is in trouble. Costs have
gone up. We’re now the highest-cost producer in North America. Jobs are
at risk. We’ve seen the job losses already under the NDP. Ultimately,
it’s the Premier’s responsibility.
Will the Premier step in and press pause before more damage can be
done to our vibrant forest industry?
Hon. D. Donaldson: Well, let’s look at that concentration in the coast forest sector
industry, brought about as a direct result of changes this former
government brought in, in 2004. Let’s have a look at that.
As a result of their actions between 2003 and 2017, jobs in the
coast forest sector decreased by 40 percent. Production decreased by 40
percent. Waste was up, and so were log exports. We’re determined to
address all of those trends with the changes we make, because we put
First Nations, communities and workers at the forefront.
[End of question period.]
Point of Privilege
(continued)
Hon. D. Eby: As you know, on April 30, I raised a matter of privilege. The House
Leader for the opposition raised a concern that she didn’t understand how it
applied to Standing Order 26. I have brief submissions for you about the
two-part test to consider in relation to those submissions.
The first branch that the Speaker needs to determine is whether the
procedural requirements have been met. The second branch is substantive:
whether the remarks themselves amount to a contempt, as I suggest they
do.
On branch 1, the question is whether the member raised these issues at
the earliest opportunity. The remarks were made on the 29th, and I reserved
my right the same morning. Then I delivered my remarks the next day: a brief
written statement of the matter, which is also a requirement, delivered in
the presence of the member, which it was. The member for Prince
George–Mackenzie was here when I delivered my speech.
Then there’s the larger question about whether misleading the House
can be a contempt. MacMinn does not talk about this — what specific
contempts are. He refers to two other textbooks: May’s 23rd edition, the
contempts chapter, and Maingot’s text, Parliamentary Privilege in
Canada . Both of those authors are very clear that the House may
treat the making of a deliberately misleading statement as a contempt.
That’s according to May. Maingot says that deliberately misleading
statements may be treated as a contempt.
[2:30 p.m.]
Now, I understand that not all criticisms of an Attorney General, or
even all false criticisms, would rise to this level. The Speaker should
protect an environment where people can be critical of the Attorney General.
However, I submit there is a limit to the cut and thrust, and that limit is
making things up out of whole cloth that attack the very root of the
Attorney General’s role of interacting with agencies, police, lawyers and
others — and, frankly, being the lawyer for the Lieutenant-Governor, and
ultimately Her Majesty, as the representative government here.
I urge you to find a prima facie case here. If you do, then I will
move a motion that this House determine whether the remarks rise to
contempt, by committee — which, as the members know, is the
process.
I’m happy to table my remarks. Again, hon. Speaker, these are the same
remarks that I have provided to your office.
Mr. Speaker: Member for Prince George–Mackenzie, do you have a response?
M. Morris: I’ll reserve my right to reply at a later time, Mr.
Speaker.
Mr. Speaker: Okay, thank you.
Orders of the Day
Hon. M. Farnworth: In this chamber, I call the estimates of the Ministry of Finance for
debate. In
Section A, the Douglas Fir Room, I call continued debate on the
estimates of the Ministry of Education. In
Section C, the Birch Room, I call the
estimates of the Ministry of Social Development and Poverty Reduction and, when
they are completed, to be followed by the estimates debate for the Ministry of
Agriculture.
Committee of Supply
ESTIMATES: MINISTRY OF FINANCE
The House in Committee of Supply (Section B); R. Chouhan in the
chair.
The committee met at 2:35 p.m.
On Vote 25: ministry operations, $265,327,000.
Hon. C. James: I will be having a variety of staff, as we look at the various
areas in the ministry, coming in to provide support. I want to express
my appreciation to the staff who always, during the year as well as
estimates, provide good support. I’m looking forward to the discussion
and the questions and the areas that we’ll canvass over these
estimates.
S. Bond: Good afternoon to the minister and her staff. We also appreciate
the work that the ministry staff do too, not just at this period of
time, although I know we’ll be spending a lot of quality time together
over the next few days. This is our opportunity, as the opposition, to
raise issues of concern about the budget and the fiscal future of
British Columbia. It’s also a chance for us to raise specific issues
that we have heard from constituents and British Columbians who want to
have some answers on some very specific issues.
In order to facilitate the flow of the estimates process, we’re
going to begin today with having several MLAs raise issues. I should
point out to the minister that, in some cases, some of the critics were
actually sent here to ask questions on behalf of some of the Finance
Minister’s colleagues. So we’re going to begin with a number of MLAs
asking those questions. We’ll have a few more throughout the course of
the next couple of days as the MLAs bring specific concerns, which we
always encourage them to do.
With that, we’re going to begin with one of my colleagues and some
very specific questions on clean energy.
P. Milobar: I’m glad to be here to ask a few follow-up questions of the
Minister of Finance in relation to CleanBC and a couple of calculations
in the budget from the minister’s numbers that don’t seem to quite match
up with what’s going on with CleanBC. So I’ll jump right in.
At $30 a tonne back in the 2017-2018 fiscal year, the province
took in $1.248 billion of carbon taxation, and in ’18-19, the last year,
under the former government’s climate strategy, the province took in, at
$35 a tonne, $1.488 billion. I raise that because those equate to 41.6
megatonnes of emissions that the tax was paid under $30 and 41.7
megatonnes under $35 a tonne.
Moving forward, as we progress with CleanBC and the march to $40,
$45 and $50 a tonne of carbon, we actually see the budget is based on an
ever-increasing tonnage, megatonnes, of emissions. So this year, at $40
a tonne, we go from 41.7 megatonnes of emissions to 42.8 megatonnes of
emissions. The next year we go to 43.75 megatonnes’ worth of emissions
that tax is being calculated on, and in the final year at $50 in the
budget book, it’s based on 44 megatonnes at $2.2 billion at $50 a
tonne.
[2:40 p.m.]
The question I would have for the minister is…. There seems to be
a disconnect between CleanBC’s stated goal to reduce emissions within
the province of British Columbia and the Minister of Finance actually
calculating and predicating financial figures based on an
ever-increasing — actually, a faster increasing — rate of emissions than
the two static years, the last two years, that we had under the old plan
around our climate action.
With CleanBC being implemented, what we’re actually seeing is an
increase of the megatonnes, a taxation level at a higher level of
megatonnes. In fact, if we were able to hold the emissions to about the
last year under the old plan’s emission targets, it would result in
about a $270 million loss of revenue to the provincial government based
on these next three years of budget. In fact, if CleanBC was actually
delivering what its stated goal is, to actually drive down emissions,
let’s say, by one megatonne a year, to be actually not even that
aggressive with the numbers, it results in a $550 million shortfall in
the provincial budget over the next three years.
Could the minister explain why, if CleanBC is supposed to be
driving down emissions, the Finance Minister has decided to have an
ever-increasing, and, actually, an accelerated rate of emissions for
taxation purposes to get to the $2.2 billion, but more specifically,
even an extra megatonne in this particular year as well?
Hon. C. James: There are a couple of pieces that I think are important to note
when it comes to the revenue coming in from carbon tax: the revenue
that’s booked into the budget. I think the biggest piece that hasn’t
been taken into account, if you simply look at the emissions and the
reduction of emissions, of course, is economic growth and adjustments
that happened there. Carbon tax revenues are forecasted to increase due
to, yes, the annual carbon tax increase, as the member has identified.
Also, diesel volumes are expected to rise by 2 percent — that gets
accounted within these dollars — and then other fuel volumes, again,
rising based on GDP projections, which is economic growth.
That would be everything…. Natural gas would be the largest piece.
I’d refer the member to the assumptions table that’s in the budget.
Table A5, page 119, actually identifies each of these areas and the
increase that we built into the budget that will account for the dollar
difference that I think the member is referring to.
[2:45 p.m.]
I think the other piece that’s important to note is that the
CleanBC initiatives, many of them, don’t take place…. The impacts of the
reduction in emissions, if you look at the CleanBC plan, don’t take
place within the first year or the second year of the fiscal plan.
Again, there are adjustments that will be made as that program is
implemented as well.
P. Milobar: Well, that’s a little confusing, given that there are several
CleanBC initiatives which are supposed to be bringing down emissions
that are funded in this year. Notably, the electric vehicle program is
100 percent funded in just year one, with no other funding in the next
years and no other dollars identified whatsoever. The low-income tax
credit is also another one that is responsible for about 10 percent of
the overall emission reduction within the current CleanBC plan. CEV is
about 7 percent, so there’s about 17 percent that should be driving
immediate results, one would think, for people and our
environment.
I guess again to the minister, then. To get clear, is the Finance
Minister saying that although CleanBC was supposed to be driving down
emissions, it doesn’t look like they’re budgeting to drive emissions
down with any of these measures within Clean BC? Or is the growth rate
of the GDP, and everything else that went into that calculation, going
to be higher than any of the tangible reductions that CleanBC is
shooting for? Are we still looking at a net increase of emissions based
on the CleanBC document, then, given the answer that the minister had
just provided, that you have to look at other factors to
see…?
I took from that answer the minister saying that the growth would
have been worse if it was not for CleanBC, but it’s still growing. The
overall objective of CleanBC is supposed to actually see a reduction —
not a slower increase but an actual reduction. This still shows a very
clear and, actually, much faster-growing increase.
When I look at the ’17-18 year versus the ’18-19, the economy was
still moving along very well. GDP was growing, and we only saw a 0.1
megatonne increase in emissions under the old climate strategy. Under
CleanBC, we see that jump by over a megatonne, by 1.1 megatonnes. Then
it jumps another megatonne; then it jumps again. It seems to be actually
increasing at a much faster rate than under the old plan.
Can we get some reconciliation in the answer here as to how it is
possible that a plan that is supposed to be driving down emissions is
actually being used as a calculation for revenue purposes to make sure
that the books balance and that there’s a surplus?
Hon. C. James: I’ll just come back, again, with a reminder for the member. Again,
I think it’s important to note that these assumptions are all listed in
the budget as assumptions. The amount of money coming in around the
carbon tax rate, around diesel volumes and around natural gas is all
listed in the budget.
Remember, we are talking about a three-year fiscal plan versus a
ten-year-plus climate action plan. So when you’re taking a look at the
strategies, as the member will know….
[2:50 p.m.]
I know he had a very thorough discussion with the Minister of
Environment around the CleanBC plan and around the time frame for the
CleanBC plan and the time frame it takes both to change behaviour as
well as to see the significant changes. I know the member has canvassed
all of those timelines, but that’s obviously different than the
three-year fiscal plan.
As I said, the carbon tax increase has been built into the budget
to 2021. Diesel volumes, again, rising. Other volumes, including natural
gas, because of GDP growth and because of growth, also rising, and those
are listed in the table.
P. Milobar: I’ll take from that answer, then, that the real plan for CleanBC
is to let emissions continue to grow over the next three years to then
try to get them driven down even that much further in the last seven
years of the plan. That’s what I’m hearing. We can add an extra few
megatonnes a year to the emission profile, and instead of then trying to
achieve 18.9 megatonnes of reductions, we will now have a new starting
point where we need to find 20.9 or 22.9 megatonnes instead of the 18.9,
plus the missing 6.1 megatonnes out of the CleanBC plan as it
stands.
Moving on to the low-income payment part of CleanBC, and that’s
$223 million over this next three-year fiscal plan, can the minister
confirm…? The Environment Minister, when I questioned him on this,
alluded to that this year it was a new program, which I was sure that it
was not. Last year in estimates, he alluded to that, actually, now with
this new way of doing the credit, 53 percent of the population would be
eligible for the low-income credit.
When I’ve been doing my research, what I have found is that at
$300, the climate action tax credit was available to people at a $30
carbon tonne. When it went to $35, it went from $300 to $350. Now it’s
at $40, and it’s moved to $400 for an eligible household. It seems to be
moving every time there’s a $5 increment. It moves as it did previously,
under the previous government.
When I went on line last week to the government website and pulled
off the information for the climate action tax credit, it actually shows
the payment schedule, starting back in 2014 all the way up to 2018. It
shows what the income thresholds are. There’s a methodical movement. It
does not seem to have changed anything there.
Can the minister confirm that, in fact, this is just a
continuation of what existing programs were in place for low-income
people, low-income families — that the income thresholds remain the
same, except for those inflationary adjustments that happen every year,
and that there’s not been a broadening of the eligibility for this
program and that, in fact, it is not a new program?
When we hear talk of a $400 program, last year it was actually
$350. That has moved to $400 this year. As the chart shows, next year,
when it goes to $45, it’ll go to $450. But it is not brand-new money,
not at $400. There has not been expanded eligibility, and in fact,
people would already need to be qualifying for that rebate cheque to be
able to qualify for the extra few dollars this year.
[2:55 p.m.]
Hon. C. James: The member is correct. There was an existing low-income credit
that was in place for the carbon tax. As the member has stated, we have
increased the credit — to increase each year, based on the increase in
the carbon tax as well.
With that maximum that increases each time the carbon tax is
increased, that means that the phase-out happens at a higher income
level. When the phase-out happens at a higher income level, that means
that more British Columbians receive the credit. So 57 percent is the
estimate of British Columbians who will receive the credit in ’19-20. It
will, as I said, increase each year as the carbon tax increases, until
we reach the $50 a tonne that we’ve committed to.
P. Milobar: But to be clear, then, it’s…. I recognize government is trying to
always make the best sales pitch possible. But I think the perception
that was given by a budget presentation — and subsequent answers by
various ministers and various speeches given in this House — was that
this was a new $400. In fact, the leader of the Green Party, in his
budget commentary, alluded to that, as well, and sounded surprised that
it wasn’t brand-new — $400 per household.
Why I’m asking this and why it’s important is…. Yes, there may be
the phase-out. The phase-out, to my understanding, is 2 percent of the
benefit as you clip over the minimum threshold. The minimum threshold is
$41,000, a qualification of $41,000 household income, approximately, for
a family of four. That’s the only way you hit the maximum of $400. If
you’re a family of three, depending what your makeup is, you start to
lose $5.50 a child, $19.50 an adult. You can have the one dependent
child be qualified as an adult to help that boost a bit.
[3:00 p.m.]
There are not going to be a lot of people that qualify 100 percent
as a family of four. If they do, that’s great. I think they do need the
supports. That’s why we put this program in place in the first place. So
we’re not quibbling with that.
I think it’s trying to get a better handle on the marketing. It’s
not 53 percent or 57 percent of the public that will be seeing a $400
increase to a subsidized tax credit or tax break. In fact, if you’re at
the higher income level, even at the $400, it’s a few dollars you might
now qualify for, not the $400.
Has there been a calculation as to what that actually means in
terms of the extra people that will now qualify? How much would they
actually qualify for out of that $400? Is it $10 a year? Is it $15 a
year? There must be something that went into the calculation of that
$223 million — just so that the public can get a better understanding
that they’re not actually going to be receiving a $400 tax credit now.
They may actually, previously, not have qualified, and they now go from
a $350 cutoff to a $400 cutoff, and they qualify for $16.95.
Hon. C. James: The member knows full well how income-tested programs work and
that there will be a variety of families, a variety of makeup of
families, a variety of individuals. So it will depend, for a family, on
the number of children they have, on their net income, and as I said, on
the makeup of their family. That’s going to vary from person to person.
And $400 is the amount, the new amount this year, for someone who
qualifies for the full amount. Then, again, it tapers, depending on the
makeup of the family and depending on the income level, and the income
levels are listed on page 126.
P. Milobar: I’ll move on…. Just to clarify, it’s not for a person to qualify
for $400. It’s for a family of four earning $41,000 or less as a
household income that would qualify for $400. An individual would
qualify for much less. It’s in the $154.50 range, I believe, for an
individual, and they would have to make $35,000 or less to qualify for
that.
Moving on, then, to the clean vehicle program, the ZEV program — a
couple quick questions. I just want to make sure that when we get to the
Energy and Mines Ministry at the end of the week and heading into next
week that the answer back isn’t that I should have asked here, so I want
to make sure we cover this off on a progression.
Last year…. Well, starting in the September 2017 budget update and
moving through to the end of fiscal ’18-19, there was $57 million added
to the rebate program.
[3:05 p.m.]
Again, we started the rebate program. We’re not opposed to this
happening. But that was a very substantial chunk of money needed to go
into the program to make sure that it ran through to the end of
fiscal.
Today as I was sitting here…. You can go on line. They have a
real-time tracker. They’re at under $3.9 million left in the fund before
it’s fully exhausted. I’m sure they’re waiting for the next tranche of
this $42 million that’s in this year’s budget, under CleanBC
programming, to come forward to top up that $3.8 million. I would
imagine that with the matching federal program kicking in May 1, that
$3.8 million probably dropped very quickly in the last couple days and
will continue to over the next few weeks.
When I asked in the Ministry of Environment estimates around this,
the answer back seemed to be why there was only money for CleanBC for
year 1 at $42 million, which based on the $57 million would seem that
there’s not enough money to even hit the end of this year’s fiscal
without the program running dry. The answer back was: waiting to see
what the feds were going to do or not do and making sure that programs
could sync together or not and what types of resources may come to bear
there.
The concern is we have a piece of legislation in front of the
House that would essentially say: “It’s no longer the government’s worry
about how you get into a clean energy vehicle. We have a piece of law
with million-dollar fines telling you that you better figure out how to
sell somebody a car they might not want right now or you’re going to pay
us a fine.”
There’s not enough money to even fund the first year of this
three-year budget book, let alone the subsequent two years. I was able
to establish that based on the expected dollar values needed to help
offset industry’s costs within CleanBC, the initial $168 million will
probably be topped up significantly from the $299 million in CleanBC
that’s sitting in contingencies. And as best as we could work around,
that left about $100 million in contingencies within the CleanBC
document.
So there’s $300 million in contingencies now dropped to a $100
million with an unfunded program of this magnitude.
Doing the math of what it actually takes for a subsidy of roughly
$4,000 a car — because not every car gets the full $5,000, at least to
this point — what we’ve been seeing is that to get to 2030 goals within
CleanBC, you would need close to $1.6 billion at the end of this $42
million to get you there.
Talking to the auto industry, they say the tipping point of
pricing…. They’re not sure where government is getting that from because
they do not feel that it’s anytime soon on the horizon. In fact, when
Ontario stopped their subsidization program, the sales ceased
immediately.
I guess the question is: why is there only $42 million in the
first year in CleanBC for the clean energy vehicle program when even
in…? As this year’s budget was being created, it would have become very
apparent, as $30 million needed to go into supplemental budgets with the
Ministry of Energy and Mines to fund the car program to get to the end
of the fiscal…. Why was there a shortfall of funding to even get through
this year’s fiscal within CleanBC within this year’s budget? Let alone,
where is the subsequent year’s money for this program?
[3:10 p.m.]
Hon. C. James: I think the member rightly talked about the work being done in
EMPR with the federal program. So we’re waiting for the federal program
to come into place to see whether any adjustments would need to be made
over this next year with our provincial program as well. I think it’s
important to note that for CleanBC, just for this fiscal year, there’s
$37.3 million in contingencies in this area. A large portion of that, we
expect, will be allocated towards the electric vehicle
program.
Then as for the second year and third year, I think, as the member
knows well, each year you take a look at the program. You take a look at
the structure of the program. You take a look at the success and the
challenges of the program, whether you need to make any changes. Those
decisions will be made in the upcoming budget for the following
year.
P. Milobar: Well, that’s a little concerning. The language around the
contingencies funding within CleanBC in the budget book very much makes
it seem like this is for new types of programs and initiatives that
would come on stream and as of yet have been defined. Based on that
answer, a large portion of this year’s contingencies is now going to go
to a program that exists and that just didn’t get proper funding in the
first place, even though the budget book was being created at the same
time as supplemental requests were being made, and press releases were
being issued to fund that same program.
We also know that out of the $299 million, the better part of $280
million is going to go to help heavy industry offset their tax burden.
That means that we’re down to, even just with this year, about $60
million left out of a $300 million contingency fund over three years,
which is worded in such a way that there was much excitement that this
would help spur on innovation and new programming within the province.
Instead, that doesn’t seem to be the case. Again, is the minister then
saying that the ZEV program continuation hinges solely on a federal
government program running or not running?
There are no dollars indicated in years 2 or 3. There was no
federal program indicated when this budget book was brought out in the
first place. Again, why was there no ZEV money for years 2 and 3 in this
budget, if in fact the intention is to continue it on? There is a great
worry out in the manufacturers and the sales world, with the legislation
coming and the way the budget book reads, that the hammer for the
government to make the shift for people and sales will be legislative,
not with the existing rebates that are available.
As I say, we see what happened in Ontario — that resulted because
of a change in government — the rebate program disappeared, and so did
the sales. We have a federal election coming up in October. If there’s a
change in government or a change in direction, you could have the same
thing. Is the province saying that we’re only going to go as the federal
government goes? Or is CleanBC a document that is properly funded? If
so, where is the funding for CleanBC, for this program, in years 2 and 3
in this budget?
Hon. C. James: I expect the member to continue to hold us to account each budget
year. That’s the purpose of going through estimates. It’s so the member
has the opportunity to be able to raise those questions — and other
members, as well. As I said, it’s important to make sure that the
program is put in place in coordination with other programs that are out
there.
[3:15 p.m.]
That’s why, as the member heard clearly from EMPR, they were
taking a look at the federal program, to take a look at how to
coordinate. That’s why dollars were put in contingencies, to be able to
provide for that support. Then, as we go into the budget process, this,
obviously, is a clear commitment both in CleanBC as well as for our
government. We’ll take a look at the amount that will be needed to be
able to fund the program.
P. Milobar: Well, again, there’s not enough money in contingencies to actually
fund the program, based on last year as it is and based on other
commitments for those contingencies that were conveyed in estimates with
Environment.
One last area I would like to just touch on again to make sure….
I’m wondering if the minister could enlighten me on any modelling within
the ministry on the extra per-litre cost to the consumers’ gasoline at
the pump and diesel that has been done on the new fuel standard that is
mandated by CleanBC. So they’re going to a higher mix. It doesn’t
currently exist. It doesn’t exist in Alberta. It will be somewhat of, I
guess, an artisanal blend for British Columbia that will get
made.
One would have to assume that if the oil companies could produce
that cheaper right now, they would be. Most companies tend to put to
market whatever they can produce and that would have acceptance at the
lowest cost possible. So there must be an increased cost per litre of
gas and per litre of diesel with this new fuel blend. This new fuel
blend will result, under CleanBC, about…. It accounts for almost 22
percent of CleanBC’s emission reduction targets. So it’s a very
significant piece of the whole CleanBC plan, or that falls apart. Let
alone the missing 25 percent; you’d be almost missing 50 percent of
CleanBC, if this fuel does not hit the market.
What modelling has been done, and what is the expected increase of
the per-litre cost that this fuel mixture will cost British Columbians —
the travelling public, industry, everybody — to be able to use this new
fuel blend that needs to be made specifically for the B.C.
market?
Hon. C. James: EMPR is working with industry right now to develop a plan around
the new fuel standard, and certainly, Finance will be there at the table
as they have those discussions and work through that process. EMPR may
have a little more to say in their estimates as well, but that’s the
process that they’re going through, and we’ll be part of that
process.
J. Thornthwaite: I have a couple of questions to do with — actually, closer to
three, I think — the speculation tax.
I have a couple of constituents that have written me. They live in
Indian Arm. We’ve heard lots in this House about Belcarra. In fact, one
of the responses that my constituency got, the staff from the ministry
actually incorrectly referred to her as living in Belcarra. They don’t.
They live on the other side of Indian Arm, and they are only accessible
by water.
[3:20 p.m.]
She notes in her letter to me: “Islands that are accessible only
by air or water are not part of the taxable regions.”
She goes on to say: “Our secondary property is a recreational home
located in Indian Arm, Orlomah Beach, which has no road to the home. It
is not an island, however. It is boat access only. I would like to
request exemption from the speculation and vacancy tax based on the same
criteria as the islands that are accessible only by air or water. My
recreational home is only accessible by water, and I respectfully
request fair and equitable application of the exemption based on access
to the property.”
That’s my first constituent. The other one, I think, lives in the
same area. He didn’t give me his exact address, but he is up there.
Certainly, he’s up in Indian Arm, and he says the same thing: “We do not
have hydroelectricity, city water or phone service. Even the cell
service is intermittent. The parking and access in the Deep Cove area
does not lend itself to long-term or even short-term rentals — i.e.,
request to rentals. Emergency services are not readily available up
Indian Arm should a tenant become injured, and access, again, is by
water only.” His question is: “How is it that Johnson Bay residents,
which are directly across the inlet from me, are exempt and we are
not?”
I think that my question is all about equity and why my
constituents, even though they are only accessible in the upper Indian
Arm, on the district of North Vancouver side of Indian Arm…? You can’t
get to it, except by water, like an island. Why aren’t they exempt as
well?
Hon. C. James: Thank you to the member for bringing forward the constituency
concerns. As I think the member knows, we’ve often canvassed the
speculation tax in question period. I won’t be, as Finance Minister,
giving individual, specific tax information or advice to individuals. As
we have learned, many of these are very complex situations. It’s
important that accurate information be given and that we receive that
accurate information. So I’m happy to take information from all members,
if their constituents feel they haven’t had their questions answered.
I’m happy to pass those along to the people in our help area to be able
to look at those issues and get back to them.
The broader question around the specifics that the member raised….
As the member knows, I’ll be having a meeting with the mayors of the
impacted areas. They’ll certainly be bringing their issues. By the time
we have that meeting, we hope, as well, to have more specific
information around the speculation tax. So we’ll be able to put all of
the data on the table and have those conversations based on the facts
that we have been able to gather.
I do think it’s important, when we begin to have the discussion
around the speculation and vacancy tax, to note that we are talking
about people’s second homes or third homes or fourth homes. This not
people’s principal residence. Those are exempt. The fact is that 99
percent of British Columbians are exempt from paying this tax. I just
think it’s important to set the context of the fact that we are bringing
forward this tax to deal with speculation and the vacancy challenges
that we’re facing in communities, the affordability crisis for people,
and to address it on behalf of individuals and workers.
J. Thornthwaite: The point is that these are not speculators. Yes, they do have a
second home, but it’s equivalent to an island. They just happen to be up
Indian Arm. Why are they essentially discriminated against because they
live on the mainland, even though, if they were on an island, they would
be exempt? You still have to get to them in the same way.
I will take the minister up on her offer. I will make sure that my
constituents pass on their information to the minister. I hope, for
sure, that she will consider the district of North Van. It’s not
Belcarra. One of the responses that one of them did get from the
ministry said that they were from Belcarra. They’re not. They’re on the
other side of Indian Arm.
My next question, as well…. I had another constituent who
purchased a condominium in the year 2010 in the north Nanaimo area. He
had planned that this was going to be his future retirement home. He was
going to move there on a full-time basis once his wife retires. He’s
retired, but she’s not quite yet. She’s just finishing her career in
North Vancouver. They purchased this property in Nanaimo under the
intent that they would be moving there to retire.
[3:25 p.m.]
I’ll quote what he says: “The sole objective for purchasing this
unit in Nanaimo was for our own use and not for speculative reasons. The
Nanaimo unit is not currently rented as we are personally using it once
or twice per month, as our son and his wife also live in Nanaimo and we
travel there to visit our three grandchildren.”
I’m going to quote what he said: “Truthfully, this additional tax
will be a huge burden to us. We strongly believe that as Canadian
citizens, we should not be penalized for our hard work and success. I
hope that the current government will further review the speculation tax
once again and only penalize those who are benefiting from these types
of speculation, instead of senior citizens who are not speculating, who
had no inkling of the added tax burden that government has implemented
at such short notice.”
Plus, the fact is, as I said, that they bought their property in
2010. They’re very worried, and they think that they might have to sell,
and they bought it for their retirement.
Again, I ask the minister: could you please take into
consideration the senior citizens that are obviously not speculators? I
have no problem sending this letter directly to the minister if the
ministry would consider an exemption in this case. I know the letter
that I did get from my constituents…. They were essentially pleading
with me to plead to the minister.
Again, my question is to the minister. Is there going to be any
opportunity for my constituent here, in this case, to get an
exemption?
Hon. C. James: I’d be happy to take the information. I’m not going to give
individual tax advice to individuals. That’s something that, as I said,
is important to be done with people who can look at all of the
information that’s there and make sure all the information is
accurate.
I do think it’s important to note, though, that that increase in
housing prices over 2010 to today is a large increase that people who
own second or third or fourth homes have benefited from. While I
appreciate the member’s comments, and I appreciate the challenges for
seniors, let’s remember as well that there are a large majority of
people, of many seniors in this province, who are struggling to find
housing, who aren’t able to find a primary residence, never mind looking
at a second home or a third home.
Those are the individuals, the kind of crisis we’re facing…. It’s
why we are here in the first place. People can’t afford to be able to
find a single home. They can’t afford to be able to rent a place because
the vacancy rate is almost zero in communities.
You’ve continued to see that in the areas that have been chosen
for the speculator and vacancy tax. They’re the least unaffordable. They
have the lowest vacancy rates, and they have the most challenges —
challenges for businesses in finding workers, challenges for recruitment
and retention. In fact, the businesses came forward, as I’ve talked
about often in the development of this tax, to say we had to do
something about the affordability crisis.
We have taken into account, as the member knows, many exemptions,
in fact, for special circumstances for individuals — if a person is ill
or someone goes into long-term care or they’re working somewhere else.
In fact, there are individual exemptions within this tax bill to be able
to take into account a number of considerations.
I’m happy to take the member’s information, but I think it is
important to note that the increase in housing prices has provided a
benefit to people over the years. Looking at affordability is something
that will benefit all British Columbians, which is critical if you’re
looking at housing being used as a place to live. That’s the goal, and
that’s part of what we’re working on with the speculation and vacancy
tax.
J. Thornthwaite: We do know that these particular cases, and the thousands of
others that are similar, have nothing to do with providing housing stock
or rental stock for individuals. It’s not putting a dent in that issue.
These poor individuals that are essentially getting punished because
they have a second home are not helping the housing crisis in this
issue.
I want to have one more scenario, just to bring it to the
attention of the minister. I know this isn’t specifically…. I mean, it
does obviously affect the spec tax. I just wanted to give a scenario to
the minister about how it just seems so counterproductive in this
particular case.
[3:30 p.m.]
There’s a student who is in the same school as my daughter. Her
parents are foreign, but they purchased a condominium for their daughter
to live in while she goes to school — so the four years and maybe
beyond. They actually purchased this property.
Well, obviously they’re getting charged the speculation tax. But
the issue is what they’ve been forced to do. This is how preposterous
this thing is for them.
[J. Isaacs in the chair.]
Now they have to rent that property to a foreigner — or to another
person, foreign to them, not necessarily a foreigner — and then get
another rental property for their own child because they’re not allowed
to rent the property for their own child.
I just don’t get that. I just think that it’s maybe an unintended
consequence — that you can’t even rent out to your own child. You have
to rent out to a foreigner or a different person, and then you have to
get that housing for your own child somewhere else to rent off of
someone else. I’m just wondering if the minister had thought about those
scenarios with regards to the spec tax.
Hon. C. James: Again, as I’ll state to the member, I’m not going to speak about
individual tax information, because it’s obvious, with the information
that the member is providing, that there can be a misunderstanding.
There can be a lack of information provided.
If you are a B.C. resident and you have bought, for example, a
condo for your child who is going to university — you live in one of the
areas where the speculation tax applies, and they’re living in a condo
going to university — you do not pay the speculation tax. They are
considered a non-arm’s-length individual. They do not pay the
speculation tax. They don’t. If you’re a B.C. resident, you get a
$400,000 credit on your second home. That’s also available.
Again, it’s part of the reason…. I think the member has raised a
perfect example of why it’s important not to be making decisions based
on information that’s passed along, because sometimes not all of the
information is passed along or the individual may not have shared it
all.
I’m happy to take a look at the specific information to pass it on
to staff to be able to review. But again, I think it’s important to note
there is an exemption, a non-arm’s-length exemption. If the individual
has bought a condo for their daughter or son who is going to university
or is living in it as their primary residence, they will not pay the
tax.
J. Thornthwaite: Again, I will take the minister up on her offer and provide her
with the details in an email, so thank you very much.
S. Thomson: I appreciate the opportunity to ask a couple of questions. Welcome
to the minister and her staff.
I expect I’ll get the same…. They’re some speculation tax
questions. I’ve got one other issue, as well, that I want to canvass,
but the first couple of questions will be around the speculation tax. I
expect I’m going to get the same answer that the minister just provided
to my colleague from North Vancouver–Seymour.
It does bother me, in terms of putting the questions forward,
around the response from the minister, that even though it’s clear in
these examples that people are not speculating and the properties aren’t
vacant — so it’s not speculation and it’s not vacancy, both the apparent
tenets of the legislation — it’s okay if the rules happen to be such
that they have to pay the speculation tax because they don’t quite fit
one of those exemptions and it’s okay that you’re paying the speculation
tax simply because you’ve had an increase in value in your property over
time.
[3:35 p.m.]
You should, then, apparently just suck it up and be happy to pay
the tax because you’ve had this increase in value, when clearly you’re
not speculating — you’re not in that category — and the properties
aren’t vacant. I’ll use the example here, which is one of the ones I
wanted to raise. It has gone, specifically, to the minister’s office,
and they have received a response.
The situation here is the person…. It’s a couple. They have a
residence in Kelowna. The husband lives in Kelowna. It’s his principal
residence, and qualifies for principal residency. He’s paying taxes in
Kelowna. The title is in both his and his wife’s name.
His wife lives, and continues to live, in Alberta and has to stay
there because of medical reasons. They have a home in Alberta, which
they intend on selling as soon as the medical requirements for her to
stay in Alberta are complete. So they’ve purchased this home. He lives
here. She lives there. Now they’re being assessed the 50 percent of the
speculation tax impact because she is on title, even though the property
here is a principal residence, even though it is not vacant, not
available for rental or anything like that.
She has had to stay in Alberta because of critical medical
rationale, and they’ve been told, “No, sorry, you don’t qualify for the
medical exemption,” because of the criteria of the medical exemption.
It’s just an example.
It points, to me, to one of the reasons why — and we’ve raised
this before during debate on the legislation — there needs to be an
independent appeal process in some way where those legitimate cases like
that can be appealed and some consideration given, because when it goes
into the property tax branch, they’re going by the very strict rules
that are in the legislation and are not qualifying for those
exemptions.
This is a specific example and one that the minister’s office has
dealt with. I just wanted to bring it forward here again, because it is
one that points out the impacts of this legislation when it is clearly
having these unintended consequences on a couple who are now having to
pay speculation tax when, clearly, this isn’t about speculation, and the
house is fully occupied and not vacant and not eligible for rental or
any other way to avoid the impact of the speculation tax.
I wonder if the minister could comment on whether she feels that
that situation is something that the speculation tax should apply
to.
Hon. C. James: I would expect the member, as the previous member did, to bring
forward the issues on behalf of their constituency. That’s their job. I
expect those to come forward. As the member has said, we received some
of those in the office as well.
Again, the member is quite right. I’m going to give the same
response, which is not to speak about a specific tax case. I think it’s
important, again, whether people pay taxes in British Columbia or pay
taxes in Alberta. There are a number of different factors that come into
account when it comes to the tax. I think, again, full information is
critical in making those determinations, and that’s
important.
I appreciate the member raising the issue. As the member knows
well, we will have an opportunity to hear from the mayors, as well, of
the communities that are impacted by the speculation tax. We’ll be
holding an opportunity for them to present their issues. Their community
will have the data from the speculation tax as well, which will give us
a good opportunity to be able to do a full review. That will occur each
year. As well, there is another review built in, so there are
opportunities along the way to address any unintended issues that may
arise.
S. Thomson: I’ll just, then, make a point around two other files. I know I
will get the same response, so I’ll just mention the files here. They
are in the minister’s office. Maybe if she could undertake to have a
look at them…. People are waiting for specific responses on
them.
[3:40 p.m.]
One is a file under the name of Fedak. The situation there is
that…. It’s a couple living in Kelowna, previously married, divorced.
She and her new husband have purchased a home, and it’s their principal
residence. Both filled out the speculation tax on it. She remains on
title on her former husband’s home, and she has a situation where there
has not been cooperation in getting her name removed from that title and
mortgage on her other home. She’s fighting that battle. She has limited
legal resources in order to be able to do that and now is finding
herself impacted by the speculation tax.
To the credit of the staff, I understand that they have been
provided some accommodation for the first year of the application but
have been told, unless she can get this straightened out, she’s going to
be impacted in the next year on it. Again, it’s a clear situation where
there is no speculation involved. Both homes are fully occupied, so
neither of them are vacant. Both are principal residences and, again,
being impacted by the tax.
Again, I go back to my point previously around there needing to be
a better appeal mechanism, maybe something sort of separate and
independent, that would look at these cases where, clearly, the impact
of the legislation is not what was intended. You’re having these
unintended consequences of the implementation of a rushed piece of
legislation. I’ll just raise that one.
Another one is very complicated, had quite a bit of back-and-forth
on it. It’s called the Truswell file. It involves an old piece of
property that the current owner inherited from his family through the
passing of his wife.
He has a life estate on it. Property title is in the ownership of
the children. The children don’t live here. One lives in White Rock. Two
live in the States. They spend significant amounts of time in the house,
but it’s not their principal residence. He, as the life estate holder,
also doesn’t spend all his time…. He also lives in the States for
periods of time.
It’s very, very, very complicated, and it gets caught up in the
legal side of what the definition of an owner is around life estate and
life tenancy and all those sorts of things. So we’ve been working back
and forth on this one with your staff. But I’ll just flag it as one that
needs some continued attention, because at this point, they are being
advised that they will still have to pay the speculation tax. All four
of them will have to pay their share of it.
This is a piece of property that has an official community plan
process over it with the city of Kelowna, which has designated it as
future park property. They don’t have the ability to sell it. It’s right
on the edge of Mission Creek in my riding. It’s just another one that
I’ll flag to the minister that needs some continued attention. I’m not
expecting a response to that.
My final question. I’ll just switch gears a little bit. I want to
just ask a question about the employers health tax and the application
of the employers health tax. This comes from a submission. A letter has
been written by the B.C. Cherry Growers Association to the minister’s
office. The letter was sent in, in January. They still haven’t had a
response to that letter.
It involves the application of the employers health tax around the
seasonal agriculture worker program.
As the minister may know, under that program, the contractual
arrangement between the parties, between Canada and Mexico and B.C. in
terms of that program, the farmer who is utilizing the seasonal
agriculture worker program is required to pay private medical insurance
for all of the employees that are brought in under the program. That’s
part of the contractual requirement.
[3:45 p.m.]
They’re not eligible for medical services premium coverage, yet
they are being assessed an employers health tax as the replacement tax
for MSP. It’s getting built into their…. Their payroll for all of that
is being assessed the employers health tax.
It seems to me that, first of all, it’s creating a very
significant impact on the agricultural industry, particularly, in this
case, the cherry growers, who are major users of the program. Given the
nature of the industry, the growth of the industry, the tremendous
opportunities in the export market…. And we’re seeing real growth in the
sector. I’m wondering if the minister could clarify or comment on her
views of the application of this tax on agricultural operations, farmers
and ranchers in British Columbia who are utilizing that program and, as
part of that program, having to pay a prescribed private health premium
for health coverage for those employees and now getting hit with this
tax.
I see two potential things that should be considered. They should
just be exempt from it, given the nature of it, or consideration should
be given that those temporary workers under the seasonal agriculture
worker program should be eligible for MSP coverage. Then you’d have some
fairness and some equity in terms of how things are being treated. In
this case, they’re having to pay the private insurance, and they’re
being assessed the employers health tax at the same time, and it’s
having a very significant impact on agricultural operations.
I know the members opposite and the government want to support the
agricultural industry and want to see that growth, yet you’ve got a
situation now here where you’re negatively impacting those
operations.
Hon. C. James: I want to start off by apologizing. I’m not sure where the
correspondence has gone, if it came in, in January. But I’m happy to
make sure we follow up so that a clear response goes back to the Cherry
Growers Association as well.
I think the first piece to note on the employers health tax and
the move to the employers health tax is that, as the member will know,
it was to get rid of a regressive tax around MSP premiums. It’s not a
tax — nor were the MSP premiums only there — that was directly linked to
spending that people may make on health care or the use of the health
care system, which would happen if you were linking it to a seasonal
workers program. There’s a link there to the use of the health care
system. In fact, that’s not the direct link. It’s a general application
tax, just as it is in other provinces. It’s tied for the lowest rate, as
the member knows, but not directly linked to the use of the health care
system by individuals.
[3:50 p.m.]
I think it’s also important to note that the support for moving
away from medical services premiums and moving to an employer health tax
is of benefit to everyone. A strong health care system is a plus for
everyone. The member quite rightly points out the challenges for
agriculture in finding workers and being able to have workers to be able
to address the work that they need doing. Again, addressing some of the
challenges in this province, whether it’s affordability or otherwise or
it’s medical service premiums or otherwise…. Making ourselves more
competitive as a province is going to be a help to everyone.
I recognize it doesn’t give the member or the cherry growers
association the specific answer they want, which is to look at an
exemption. This is a general application tax. It applies to all
employers across B.C. Payrolls of below $500,000 don’t pay. So again,
the vast majority of businesses are, in fact, not paying the employer
health tax. Then it’s graduated for $500,000 to $1 million, and $1.5
million and above, which will be paying the full tax.
Again, I think it’s just important to note that it’s not directly
linked — one of the examples the member raised. It’s not directly linked
to, in fact, the use of the health care system.
T. Redies: We weren’t sure how many questions the member from Kelowna was
going to be asking.
Minister, again, thank you for the opportunity for us to ask
questions with respect to the budget and the forecasts going out three
years. I’d like to thank the staff, again, for giving us that
opportunity and, in advance, for responding to our questions.
We’re going start first with the fiscal 2018-19 actuals and then
proceed from there into sort of the three-year forecast, if that gives
you, again, some help in terms of anticipating where we’re
going.
Hon. C. James: I just wanted to point out that ’18-19 actuals come in public
accounts, so that’s still to come. I just don’t want the member to feel
that she’s asking questions that we won’t have responses for because
they, in fact, come in public accounts.
T. Redies: Thank you for that. I appreciate that. I think this is mostly
public information that’s already in the budget, but if there is
anything that has to be deferred, then we’ll go from there.
The original fiscal 2018-19 plan forecasts spending at $53.6
billion, but actual spending came in at $55.7 billion. Can the minister
explain why the government spent $2 billion more of the taxpayers’ money
than it originally planned?
[3:55 p.m.]
Hon. C. James: Thank you for the question. A few pieces just to point out in
those changes that occurred. I think the biggest one will be no surprise
to anyone, which would be the fire, the challenges we faced when it came
to fire management costs — a $551 million difference, which is a very
large number that we had to deal with — as well as flood. Again, the
irony — the fire management and the flood costs, which were $308
million.
Student loan interest elimination, $217 million. Refundable tax
credits, $372 million — a large portion of that was related to film tax
credits. That’s, again, past years coming back. That made a big
difference in that piece. Health authorities, $312 million.
Those are the big…. I can walk through all the minor areas, but
those are the large areas that made the difference. And then
supplementary estimates, of course, which was $375 million. I know the
members have had their opportunity to ask those questions as
well.
T. Redies: Thank you, Minister, for the answer. That was helpful, actually,
because I did have the numbers for FLNRO and the $308 million for public
safety, but I wasn’t 100 percent sure what that was. So it was the
floods.
I think what you’re clarifying is that of the $269 million
additional spending in the Finance budget versus what actually happened,
$217 million was in the student loan administration. Am I correct in
that? If so, what is the balance that was spent additionally in Finance
in fiscal 2018-19?
[4:00 p.m.]
Hon. C. James: My apologies to the member. It’s, again, looking at the ’18-19
numbers and bringing them into this year’s budget and the challenges
there. The member is right. Student loans is the largest portion of
that, 217. Then the other portion is affordable housing.
[4:05 p.m.]
We have the housing initiative fund in the Ministry of Finance, as
the member may know, and there were grants to increase affordability in
the existing housing units that were accounted for. Those are the two
big pieces that made the difference in the budget.
T. Redies: Thank you to the minister for that answer. Would the minister
categorize this, dare I say, excess spending all on forecastable
events?
Hon. C. James: Both of these issues, I think as the member knows well, are key
parts of our government’s platform around affordability. If we’re
talking about the student loans — the member asked whether these were
planned approaches — student loans was a piece that certainly we have
been taking a look at. The second piece, of course, was the housing
initiative fund and again looking at how we can create more affordable
housing.
Both these programs were in fact programs that were reviewed, that
were analyzed, that went through the usual process that they would to
determine the costs that were there and then allocated within the
budget.
T. Redies: The minister is focusing on, I guess, what should have been
forecastable events given that they were platform promises that were
made. I have another question, but since she has raised this particular
issue, I would like to ask her: why, then, was it an unbudgeted
item?
Hon. C. James: I think it’s important just to take a few minutes to talk about
the setting of priorities and the determination of what goes into the
budget and what doesn’t go into the budget. It isn’t a plan to determine
these are the pieces that are going into the budget without looking at
all of the…. I know we’ll have lots of conversation around assumptions
and around economic forecasts. It is important that all of those pieces
be taken into account.
As I often say, as Minister of Finance, it is rare that something
crosses my desk that isn’t worth, from somebody’s perspective, looking
at for funding. It isn’t possible to be able to fund everything. It
isn’t possible to be able to include it all.
Therefore, part of the decision-making process that occurs through
the fall and in setting priorities is to determine what priorities
government is going to go ahead with, what gets built into the budget,
what the economic circumstances are of the province, what the second-
and third-quarter reports come forward with.
All of those pieces are critical in making decisions around where
the priorities are, when you determine something goes ahead, when you
determine that you can balance the fiscal needs of the province and
responsibility to build in prudence and to make sure that we have a
strong economic base and the investments in people that are going to
help you continue to grow the economy. That’s exactly the process that
we’ve used in every budget that we’ve developed.
T. Redies: I think the minister has established that these were not planned
expenditures, but as soon as they saw room for it, they decided to go
ahead with the expenditures.
I guess my question is also with respect to the other items that
were essentially overspending vis-à-vis the original 2018 budget. Again,
does the minister see those as actually events that could have been
forecast or events that were not forecastable?
[4:10 p.m.]
Hon. C. James: I think there are a couple of areas the member is talking about.
One would be statutory expenditures, and perhaps the other one is
supplementary estimates and the process for supplementary
estimates.
Just so I’m clear, I want to speak about statutory. If we speak
about the statutory expenditures, there are a few key areas, as the
member knows well. There are opportunities for statutory expenditures
where you spend what you have to — fires and floods obviously being one
of those. As the member knows, we have increased the fire budget for
this coming year, for ’19-20, but we also recognize, again, that that
goes up and down. The fire seasons go up and down. Rather than leave
money stranded in an area, you provide for the statutory expenditure,
which is: you spend what you need to, to be able to fight the
fire.
I don’t agree with the member’s characterization around
overspending at all. In fact, there are, as I said, key areas built in
for exactly these kinds of purposes, and that’s what we utilize them
for.
T. Redies: Thank you, Minister, for the answer.
Actually, where we’re going with this is that, again, we have made
numerous…. Well, there’s lots of evidence that this government is
spending at a breakneck pace and is potentially spending beyond the
capacity of the economy and, with unforecastable events like forestry
fires and flooding, is not actually being prudent in its spending. My
colleague is going to canvass a couple of questions which are going to
address this even further.
Obviously, the government has to spend for fires and floods, but
the point is that if the government has its pedal to the metal on
spending and is not being prudent with respect to the management of its
budget or its finances, then that could put the province into a deficit
situation.
[4:15 p.m.]
I’m going to talk now about the refundable tax credit transfers,
which the minister really hasn’t addressed. These were $372 million over
the original February budget of fiscal ’18-19. Why is that,
Minister?
Hon. C. James: As I mentioned earlier when I talked about refundable tax credits,
the vast majority of the $372 million is film tax credits. These are
years that come in from past work that’s been done, so filming that’s
already occurred.
I think it’s important to note that there was an industry
reassessment that occurred in 2017. That industry reassessment changed,
obviously, the numbers that were coming in around the refundable tax
credit. That, again, two- and three-year lag that occurs creates the
kinds of numbers that you’re seeing here.
We’ve been working, as the member may know — I think we talked a
little bit about this in last year’s estimates — with the film industry
to look at how we could provide more stability and predictability in the
numbers. We’ve had some very good conversations with the industry to
talk about things like pre-certification, so we could have a
pre-certification done on the project so that we would have a better
sense of what was coming when it came to tax credits.
That’s one of the areas that we’re exploring with the industry.
They’re very supportive as well. That’s something that we’re looking at
to be able to address some of the change that you see, year to
year.
T. Redies: Thank you, Minister, for the answer. I mean, it’s great that we
have a film industry that is very buoyant.
[4:20 p.m.]
I guess my question is: given that the actual tax credits came in
30 percent above what was forecast for fiscal ’18-19 and given that the
changes occurred in 2017 — notwithstanding the conversations that the
minister has been speaking about, with the film credit industry — is the
minister comfortable that her forecasting process around these film
credits is sufficiently robust, that British Columbians can rely on the
forecasted numbers going forward? Again, a $372 million difference that
represents a 30 percent increase is a significant variance. I guess what
I’m looking for is assurance from the minister that we won’t see that
type of issue again.
Hon. C. James: I think what the member describes is exactly the part of the
discussion that we’ve had with the industry. It’s to talk together, to
work together to look at how we can continue the kind of growth that
we’re seeing and continue the strong economic activity in our province
but also to be able to forecast the kinds of numbers.
I think it’s important to note, though, that when you’re
forecasting refundable tax credits, for example, or tax information
coming back from CRA, it’s often a 12-to-24 month lag before those
numbers come in. The member will remember that from one of our first
budgets, when the numbers shifted on the corporate income tax and then
shifted the other way. You had a down, and then you had an up the
following quarter.
There’s always some volatility that is there, but I certainly feel
very comfortable about the work that we did with the industry. We’ve
increased the amount that we expect to come in, in outer years. I think
that will take into account the pieces that are here. As I said, the
precertification piece, I believe, will make a big difference when it
comes to being able to forecast what’s coming and being able to make
those kinds of calls when it comes to building into the
budget.
I think the other interesting piece, of course, with the film
industry…. I think, certainly, that this province has tried, as other
provinces have, to get rid of the “let’s play off each other” as we look
at how we attract the industry and how we, instead, build a base for
stable, long-term growth in our province. Other outside factors take
into account the kinds of numbers that we’re looking at as well. The
dollar makes a big difference. Has some jurisdiction offered a huge tax
break that then attracts industry that would have been here in that time
period? That’s the kind of volatility that I expect could continue, but
I certainly feel comfortable with the work that we’ve done and the look
at the precertification for these numbers.
T. Redies: Thank you, Minister, for the answer. Again, a 30 percent swing in
unforecasted numbers is a significant variance. That’s what concerns us
going forward, because if we continue to see swings like that, then
obviously that will eat into the ability of the ministry to balance
budgets.
[4:25 p.m.]
The minister…. I may have heard her incorrectly, so I apologize if
I did. I think she said that they were increasing the tax credits. In
fact, my numbers here…. Again, I could be wrong. It’s been a week or so
since I looked at them. What I have is that in fiscal 2019-20, these
credits are actually forecast to come down to $1.489 billion. Am I
correct? Why are they coming down? Again, is the minister sufficiently
comfortable that we are not going to see a significant swing upwards in
these tax credits going forward?
Hon. C. James: I can understand…. The piece that’s important to note in the
’18-19 year is that it included a prior-year adjustment, which was a
one-time adjustment. That’s about $174 million, so that has to be taken
into account. I think the other piece to note is that the rates were
adjusted in 2016, so the rates were lowered in 2016. That was a
negotiated agreement with the previous government and the industry to
lower the rates. Existing films, work that was going on, were
grandparented in. That, again, caused the blip that you saw in 2017 and
the increase that came up in 2018, when you’re talking about, again, the
lag that came in.
We expect when you take off the one-time accounting and when you
take a look at the rate adjustment flowing through now from 2016 —
because now you’ve had those 24 months, and that’s when we often get the
information — you’ll see that there’s a drop in 2019-20, taking into
account those two pieces and then an increase in the outer
years.
[4:30 p.m.]
T. Redies: Thank you, Minister. I guess I’m still not following, if there was
a known one-time adjustment, why that was not built into the original
budget.
Hon. C. James: In fact, I think what the member is asking is, basically, the crux
of the challenge that we’ve been working on with the industry. It was
expected — I’m speaking for previous governments — after the rates were
adjusted in 2016 that there would be lower activity. With the rate
adjustment that happened in 2016, that was built into the 2017 budget,
but instead, you saw an increase. That’s what’s occurred.
[R. Chouhan in the chair.]
That’s why you see the changes, and that’s why it was so important
to us to sit down and look at prior assessments, because, in fact, there
isn’t a good analysis, and there hasn’t been a good analysis in this
province around what productions are out there, what’s coming up and
what might be anticipated.
As part of our looking at how we do a better job of taking a look
at these numbers, that’s why we’ve had the discussion with industry. In
fact, it is exactly the crux of the challenge that we faced as
government coming in and looking at these numbers.
T. Redies: Thank you, Minister, for that answer. Just looking at the SUCH
sector now, in 2018-19 it was $549 million higher than the original
budget. Why is that? What caused those overages? Can the minister take
us through what controls she has in place to prevent runaway spending in
these areas?
[4:35 p.m.]
Hon. C. James: Just to speak about the SUCH sector — the health authority’s
post-secondary school districts, hospitals, etc. — a portion of the dollars in that budget come from grants
from the ministry. So that’s obviously something we control — whether we
give those grants or don’t give those grants. That’s about $200 of the
amount that the member was looking at.
Then the rest of the spending in this is own-source revenue.
Again, that would be spending controlled by the individual sectors, so
they would control that spending and how they determine to spend that.
They obviously have to follow rules around balanced budgets, etc., but
they have the authority to spend their own revenue, and a large portion
of that would probably be…. They don’t list specifics, but international
student fees for universities would probably be a large portion of the
own-source revenue.
T. Redies: Thank you for the answer. That’s a lot of international student
fees, if that’s actually what is happening. I mean, the reason why we’re
asking these questions, I think the minister can appreciate, is that
spending under this government is going up by $10 billion from the time
they took office to the end of this fiscal year.
[4:40 p.m.]
It’s really important that British Columbian hardworking taxpayers
know that this money is being spent wisely and is also being spent
prudently. I think we, on this side of the House, have some real
concerns that the pace of spending is unsustainable.
Minister, just with respect to the forest fires that we’ve been
speaking about, the minister mentioned that the government has increased
the budget to, I believe, about $117 million this year. But we know in
the last two years, the government has spent almost $1 billion fighting
forest fires. Is $117 million budgeted for forest fires really
realistic, given that we are actually expecting one of the hottest
summers coming up and given past experience?
Hon. C. James: I think, as the member knows, the forest fire budget that we had
the last two years, being the worst we’ve seen…. Before that, again, the
budget really fluctuated. That’s been a common process over the last
number of years.
Yes. I do feel comfortable with the number we have built in, at
$101 million. But I also think the other pieces to put in context to
support that are the prevention and resiliency dollars we added again.
We had money in the ’18-19 budget, but we also added on top of that
another $60 million for the prevention work. That’s a critical piece of
work that has been occurring, to be able look at everything from
clearing to the prevention work that is there.
[4:45 p.m.]
Then I think the other piece to note…. The member has mentioned
prudence in a number of different places. I would agree that prudence is
critical in a budget. In fact, it’s something that I have spoken very
strongly about as I’ve delivered the budgets that I’ve delivered as
Finance Minister.
If you take into account the three-year fiscal plan, we have $2.65
billion over three years built in the forecast allowance and
contingencies. In fact, in this year, forecast allowance and
contingencies at $1.25 billion is the highest level ever built in — ever
— in a budget, for contingencies and forecast allowance. I think that’s
critical, and I think that’s being recognized. If you take a look at the
rating agencies and their ratings for British Columbia, if you take a
look at the comments that are made, the recognition of prudence being
built into the budget is there and is, I believe, an important factor to
build in. I think we’ve shown that in our numbers.
S. Bond: I know that the minister is comfortable with that number when it
comes to fires in British Columbia, but I’m sure she’s also aware that
we’ve got fires in British Columbia today, and they are starting earlier
than anticipated. They’re going to continue to be an issue. So we will
continue to monitor the fact that, at some point, we actually have to
embrace assumptions in the budget that mirror, sadly, more of what is
realistically happening on the ground. I certainly can…. We have
certainly lived that fear in my constituency and across northern British
Columbia and other parts of the province. We’ll continue to look at that
particular line item.
I think my colleague has always done an excellent job of sort of
looking at the math behind the budget. We have significant concerns
about the sustainability of spending that this government is doing. In
fact, when you look at debt…. Yes, the minister is correct that bond
rating agencies have, at this point, been fairly positive. But let’s be
clear. This government inherited a triple-A credit rating and very sound
financial practice. There were also some warnings contained in the
latest triple-A credit rating which talked about policy decisions. Those
are the kinds of things that we’re going to be monitoring very
carefully.
In fact, for British Columbians, I think it’s always helpful to
look at…. When we talk about numbers — billions — British Columbians
often glaze over, but from a pragmatic perspective, when you look at the
three-year plan that this minister and the NDP have tabled, their plan
is to increase the total provincial debt in British Columbia at a rate
of…. When you do the math, it actually works out to about $403 million a
month that will be increasing in British Columbia. So we have some
significant concerns.
Maybe we can start with the minister. Can the minister confirm for
us that the federal government provided a $1.6 billion federal transfer?
Could she outline for us the reason that British Columbia got that
transfer and perhaps indicate whether or not she anticipates that that
would be something that would be repeated by the federal
government?
[4:50 p.m.]
Hon. C. James: I just want to make sure I respond to the member’s actual
question. Could the member let us know where she’s referred to the $1.6
billion federal transfer, where that number is in the budget that she’s
referring to?
S. Bond: Well, I think that’s precisely the point. I’m sure the minister
can confirm that