Fifth Session, 41st Parliament

(2020) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Tuesday, August 11, 2020

Afternoon Sitting

Issue No. 355

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Tabling Documents

Speculation and vacancy tax, annual report, 2018 tax year

Orders of the Day

Committee of Supply

Estimates: Ministry of Forests, Lands, Natural Resource Operations and Rural Development (continued)

Hon. D. Donaldson

J. Rustad

Estimates: Ministry of Finance

Hon. C. James

S. Bond

T. Stone

T. Redies

S. Furstenau

A. Olsen

TUESDAY, AUGUST 11, 2020

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Tabling Documents

Hon. C. James: I rise to table the speculation and vacancy tax annual report for the

2018 tax year.

Orders of the Day

Hon. M. Farnworth: I call continued estimates debate, Ministry of Forests, Lands and Natural

Resource Operations.

Committee of Supply

ESTIMATES: MINISTRY OF FORESTS,

LANDS,

NATURAL RESOURCE OPERATIONS

AND RURAL DEVELOPMENT

(continued)

The House in Committee of Supply (Section B); R. Chouhan in the

chair.

The committee met at 1:35 p.m.

On Vote 29: ministry operations, $489,126,000

(continued) .

Hon. D. Donaldson: I have a couple of answers from this morning for the last couple

of questions that the member posed, if I can go ahead with

that.

As far as the cleaning up of the site on the Morice forest service

road where the Gitdumden clan had had some activity, I know the member….

I believe it was a letter to our ministry, and then today he talked

about media reports. So yes, we’ll provide it in writing. We’ll

investigate the issue and provide him what we discover in writing to

that question.

As far as the Wet’suwet’en First Nation and their FCRSA, which is

the revenue-sharing agreement for forestry activities in their area, the

member, being a former cabinet minister in this particular area of

interest, knows that FCRSAs are the responsibility of the Ministry of

Indigenous Relations and Reconciliation. However, we checked with them

over the break. In the interim, the FCRSA with the Wet’suwet’en First

Nation has been extended, and it will be renewed. We understand a letter

from MIRR is about to go out to the Wet’suwet’en First Nation explaining

that.

J. Rustad: There are a couple of questions that we’ll want to push out to the

minister here….

[1:40 p.m.]

The Chair: Okay, Member. I think there’s something wrong with the Wi-Fi

that you are using. Try again, please.

J. Rustad: Yes, my Wi-Fi here is not good, unfortunately. Perhaps what I will

do is I will submit a number of questions in writing to the minister to

get on the record.

In the Tahltan’s territory up in the northwest of the province,

hunters who have been issued LEH have been denied access or been told

they will be denied access by the Tahltan to be able to go out and hunt.

The reason that was given for this is because of COVID-19. Yet the

Tahltan are allowing guided hunts to be able to go into the territory,

which, obviously, would provide the Tahltan with a fee. So they’re

denying resident hunters an opportunity to fulfil their LEHs in the

northwest of the province to go in, through guides, and be able to hunt

in that area, or other people, not necessarily foreign, that use

guides.

The question to the minister is: why is the ministry allowing the

resident hunters to be blocked access to the Tahltan territory when the

same standard is not being held for other hunting opportunities through

guides?

[1:45 p.m.]

Hon. D. Donaldson: The member’s question — I think I caught the gist of it. I’m

familiar with low bandwidth in the northwest, so I hope you can hear my

answer properly as well.

I think the member might have characterized it as the province

allowing the Tahltan to restrict hunting. That’s not the case. The hunt

is open for residents and guided hunts in that area. However, we have

encouraged hunters who want to travel to that area to be mindful of the

provincial health officer’s orders. Dr. Bonnie Henry has consistently

stated that you should check with local conditions before visiting

remote communities and remote areas, to familiarize yourself with what

community wishes are.

Obviously, First Nations and Tahltan have a larger degree of risk

and loss, should the virus be introduced to communities. So as I said,

this is something that people should be aware of and investigate before

they travel to these remote First Nations communities. Many First

Nations have good reason to be on high alert, based on how pandemics

have devastated their communities in the past — in some cases, the

fairly recent past, whether it’s tuberculosis or smallpox.

We’ll continue to work with the Tahltan on their concerns. But at

this point, we have not restricted access to the hunting that’s

permitted in that area.

J. Rustad: As I said, I had a number of other questions, but given time and

the bandwidth, I think I will leave those questions for another time or

get them in writing, including still looking for a response with regards

to the elk issue in my riding.

I do want to make a couple of comments before I wrap up the

estimates. Hopefully, this will be able to come through. I will try to

speak slow and clear. The ministry has done a lot of what-we-heard

reports and put them out. I thought perhaps I would summarize what I

heard through this estimates process.

We have a tremendous amount of land base that needs replanting.

There’s work that needs to be done around com­munities. The Forest

Enhancement Society is the vehicle for doing that. The ministry is

providing no funding. The funding for that mechanism will run out.

Almost all of that is now allocated. It’s too bad because that means

literally there are more than one million hectares that will go

unplanted due to fires, as well as lots of work around communities in

terms of fire safe.

On the coast, we have seen policy after policy that has been

introduced that then has been adjusted because obviously there was very

little, if any, analysis done or modelling as to the cost structure. The

implementation of things like fibre recovery zones has simply downloaded

an additional cost onto producers, where we have seen, across the

province now, more than a 33 percent increase of costs in the Interior

and a 69 percent increase in costs on the coast under this

government.

We have become a high-cost producer. It makes us vulnerable to the

markets, to the market conditions, which ultimately means that mills

will take more downtime and create more disruption to an

industry.

[1:50 p.m.]

On the coast, we saw the longest strike ever in B.C.’s history

under this government. In addition, we saw Mosaic go down for eight

months in related, because of the strike, but other issues.

On top of that, B.C. now risks a trade war with Japan — obviously,

through Canada — by not being able to meet our obligations in terms of

exports through the Trans-Pacific Partnership. Another situation that

could further hurt our forest exports and our opportunities to be able

to access foreign markets.

Across the province, we see continued challenges in permitting,

particularly in some areas. I know the minister said that permitting

turnaround is short. However, every company I have talked to says

otherwise. So I’m not sure how those two numbers jibe, when some

companies are saying it can take four to five months to get permits

through and to get access on the land base.

We’ve seen disruptions. People not being able to access woodlot

licences because of disputes with First Nations.

In addition to this, across the province, we have seen a forest

health issue with the spruce beetle epidemic, which is not being

addressed effectively. In addition, an area being set aside for caribou,

where there is a known outbreak of spruce beetle that can no longer be

managed, can no longer be accessed. We’ll just let nature take its

course.

I seem to recall that was the response by the former NDP

government to the mountain pine beetle epidemic in Tweedsmuir Park, and

we all know what happened in that disaster. Spruce beetle, fortunately,

are of a different nature, but it’s unfortunate that we’re in this

situation, where these issues cannot be resolved.

We’ve seen tremendous uncertainty with things like the Interior

revitalization — that uncertainty hanging over industry’s head — and the

inability to be able to invest and to be able to enact. Even things like

in the southern Interior, where we have the category 2 sales, which are

designed to support the small operators and have opportunity. The recent

analysis appears to be about 87 percent of those sales going to large

companies. Obviously, not meeting the goals that were set

out.

The ministry continually talks about wanting to get more value

instead of volume. Fully agree that we should be trying to get more

value and have that value-added. But you have to have a primary industry

to have something to add value to, and that’s where we see big

challenges.

In that primary industry, on the coast, once again…. When you look

at the manufacturing rigs and the uncertainty that’s causing, and the

difference between the Interior and how the Interior is being managed to

the coast, it doesn’t make a lot of sense. It’s like the ministry is

targeting one very specific group or activity as opposed to having

policy that is good for the province.

It’s unfortunate that we see so much of this going on. Uncertainty

even with things like the private managed forest lands. Uncertainty on

the land base, in terms of the working forest. Reluctance to come

forward with information as to what’s going to be happening with old

growth. All of these things basically being kicked down the

road.

On wildlife, a lot of promises made by this government. In recent

conversations with wildlife groups, they’re asking: “Why have these

promises not been delivered? Why is it that the ministry is not moving

forward with what had been promised?”

In addition, we have the situation of the continual decline of

moose herds across the province and a complete lack of ability for this

ministry to look at the situation and reverse its course on its

antlerless hunt — the hunt for the cow calf — which makes no sense. You

go around to any hunter in the province. It’s hard to find anybody that

would ever agree to the policy that’s going on there, when everyone

knows the real issue at hand is predators and the need for predator

management on caribou issues.

[1:55 p.m.]

There are more things I’d like to touch on. With that, I do know

that there are other estimates that are waiting that would like to start

up here right away. So I will end my comment.

I want to thank the staff. Sorry for keeping them so long into the

Tuesday. I know that a tremendous number of people have to be online and

on a call to have access to information for the minister. We were hoping

to have this all wrapped up by Monday. Unfortunately, we weren’t able to

get there. But I do appreciate the efforts by staff.

I will follow up on the minister’s offer, as well, to have that

conversation about the Mackenzie supply area, in terms of the approaches

the ministry has taken to be able to support that community, which, of

course, has been struggling so badly over the last few years.

With that, I will turn it over to the minister and thank him for

his time here in estimates. Given my bandwidth, I don’t know if I’ll be

able to even stay on to hear the minister, but I certainly will read

Hansard to hear his remarks.

Hon. D. Donaldson: I, too, want to thank staff for their support, their knowledge and

their expertise and the member for Nechako Lakes for his comments. Of

course, I don’t agree with his perspective. He has a perspective, and he

has read it into the record.

I am more optimistic about the forest sector in B.C. and the moves

we’ve made. Now, with lumber prices up and stumpage reduced, many

workers are going back to work, whether it’s in mills or in the bush, in

harvesting. We know that share prices of the publicly traded companies

have fully recovered back to the levels they were at the beginning of

this year. So it’s an indication that they’re doing well and making a

profit.

We have challenges, certainly. That’s because not enough attention

was paid to the forest sector and other parts that we’re responsible for

in this ministry by the previous government. We have made changes, and

we’re determined to turn things around. I can tell you, on the coast, we

had exponential growth, under the previous government, in log exports.

We had an increasing concentration of tenure that wasn’t good for

competition or diversity. We launched the coast revitalization program

to address that and are implementing recommendations from

that.

In the Interior…. The member knows that there were reports that

his government received predicting the overcapacity issue with the

decline of the pine beetle. Not enough was done to support communities

to prepare for the day. We’ve done that. We’ve got the mass timber

portfolio fully launched, with the parliamentary secretary focusing on

it as well.

We were able to support communities with community grants to the

tune of $14 million coming at the end of the last fiscal year. Much of

that money went to rec sites and trails, not only to increase

infrastructure and liveability but tourism, when it bounces back, as

well as things like meat-processing facilities in remote communities and

the cannabis production facility in Williams Lake, under the Williams

Lake Indian Band.

We are also intent on bringing more fibre out of the forests. The

pellet industry is a good example of a success story in that regard.

Some of that work has been enhanced by forest health activities under

the Forest Enhancement Society of B.C. There’s $79 million allocated for

this fiscal year and $60 million for the next fiscal year, and we’re

working with the federal government to see a continuation of that

program.

Wildlife management. We finished our Together for Wild­life

engagement process. We’ll be putting a wildlife advisory committee in

place as a result of that. The ignored issues of the past will now get

full attention.

We had some good news today on the Big Bar landslide. The Whooshh

machine is working, so fish are making it through on that front. We

continue to respond to natural disasters such as that landslide and find

success.

[2:00 p.m.]

I want to say a special thank-you. The member mentioned

replanting. We’ve planted a record number of trees this year, over 300

million. That was in the midst of a COVID pandemic. I want to thank

staff for their incredible work in ensuring that workers were safe in

that industry, that communities were safe in that industry and that we

were able to ensure that the trees got planted and follow provincial

health officer orders to keep people safe.

All in all, lots of work done. I enjoy the estimates process of

getting to canvass all sorts of topics. I thank, once again, the staff,

the critic and the members who took the opportunity to ask

questions.

Vote 29: ministry operations, $489,126,000 — approved.

Vote 30: fire management, $136,310,000 — approved.

Vote 51: Forest Practices Board, $3,861,000 — approved.

Hon. D. Donaldson: I move that the committee rise and report resolutions and

completion of the estimates of the Ministry of Forests, Lands, Natural

Resource Operations and Rural Development and seek leave to sit

again.

Motion approved.

The committee rose at 2:03 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of Supply (Section B), having reported resolutions, was

granted leave to sit again.

Hon. C. James: I call the estimates of the Ministry of Finance.

[2:05 p.m.]

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

The House in Committee of Supply (Section B); R. Chouhan in the

chair.

The committee met at 2:07 p.m.

On Vote 25: ministry operations, $267,491,000.

The Chair: Minister, if you want to make any further comments, please

proceed.

Hon. C. James: Thank you very much, Mr. Chair. I’ll just take a minute, because I

want to make sure that we have lots of opportunity for my critics, who I

can see up on the screen, to be able to ask the kinds of questions that

they want to ask.

I just want to say, first, to start, that these are very unique

times. They’re unique times in the way that we’re doing estimates

through technology. They’re unique times in going through a pandemic and

looking at supplementary votes through this process as well. So I want

to say a huge thank you to staff for the extraordinary job and the extra

load that they’ve had to put on to be able to prepare for these

estimates.

Thanks to my critics and thanks to the Legislature, because

certainly it is a unique time and a unique position for a Finance

Minister to have to come forward after a budget has been tabled to

request supplementary spending, to come forward with the estimate of the

kinds of spends that we believe will help the people of this

province.

I think the fact that this entire Legislature came together in a

very short period of time, during a very difficult time, really speaks

volumes to the individuals in this House. We may disagree, but when it

comes to very important times, I think we showed that we can come

together. We can get work done. We can move ahead on pieces. I think

that’s important to acknowledge during these difficult times.

I expect there’ll be lots of good questions. We’ll have lots of

opportunity to be able to canvass the material here. But I wanted to

start off with a recognition of that work that’s happened since the

budget was tabled and since we’ve moved into this pandemic.

S. Bond: I appreciate the opportunity to participate virtually today from,

obviously, my home constituency, which is Prince George–Valemount — so

from Prince George to, basically, the Alberta border. I’m most grateful

for the opportunity to spend some time with the Finance Minister and her

staff.

[2:10 p.m.]

I do want to begin by echoing her comments and begin with a thank

you, first of all, to her and her staff, who work very constructively,

actually, with the Finance critics, my co-critic from Surrey and me. We

will walk our way through a number of questions over the next couple of

days. I do want to thank her for the opportunity to have briefings, to

have conversations, to provide some suggestions and to have what I think

is a very healthy back-and-forth. As the minister points out, there are

places we’re going to agree to disagree, but we’ve also found ways to

work as constructively as we possibly can.

Thank you, also, to the staff. Having been a minister for a number

of years, I know how hard people have been working. They work hard at

the best of times, and certainly, we’re facing challenging times. So

those are long and difficult days and hours for public servants. I know

that my co-critic and I would want to express our gratitude to

them.

I think we’ve provided the minister’s office with a general road

map for where we’re going to head over the next couple of days. Let me

just perhaps walk through a bit of how this afternoon will look to start

with.

I’m going to start with some questions, basically what I’d like to

think of as the state of the province today. For the minister’s benefit,

so her staff is ready, this is going to be the more dry section, when we

talk about numbers. That’s what the Finance Ministry is all about. We’re

going to be asking for some specific numbers around revenue, net income

and those kinds of things to get a sense of the lay of the land. Then

we’ll walk our way through a number of other sections of estimates

questions.

I’ll start for a period of time. Hopefully, around three o’clock

we’ll have an opportunity to welcome a couple of other critics and MLAs

to spend some time on some specific topics. We’ll be starting those

around three o’clock, for the minister’s information.

Then we’ll hopefully…. I’m just reminding the Green Party that

they’ll be up to wrap up the day this afternoon. Hopefully we’ll be

getting to them at about 5:30 or so. I want to make sure that people are

aware of their time slots so that we can be as efficient as

possible.

With that, I want to thank the minister. We’ll roll up our sleeves

and walk our way through estimates. I think we’ve always found that we

can work quite constructively through these questions, and we’ll hope

that’s the case again during this estimates session.

The minister would certainly be aware that on July 14, she

presented what she considered a mid-line economic scenario. It was a way

of providing an economic update, something that, obviously, we as the

opposition were very interested in. It was good to see the minister lay

out that information for British Columbians.

The questions that I have to begin with actually relate to table

2, the fiscal scenario, just to give the staff a heads-up. What I’m

looking for here: we want to try to get a sense of the more detailed

figures that correspond with the line items that are in table 1.3 of the

Budget 2020 document. I can’t see the minister on my screen at this

moment, but I’m sure she’s aware of what I’m talking about.

One of the things that’s important for our clarity is that not all

of the line items are laid out in table 2 of the economic update. I’m

wondering if the minister could provide us with, specifically — we’ll

start with these two — property transfer and property taxes, as separate

figures. Again, it’s table 1.3 of the Budget 2020 document, and they’re

laid out in table 2 of the economic update. If the minister could

provide us with the specific numbers for property transfer and property

taxes, as separate figures.

[2:15 p.m.]

Hon. C. James: The number that the member refers to is $465 million in the table,

as the member was referring to. The division of that number — which is,

I think, what the member was looking for — is a drop of $425 million for

property transfer tax and $40 million for property taxes.

Just for clarification, this does not include the school tax cut

that we provided to businesses. That’s listed on another

line.

S. Bond: Thank you very much to the Finance Minister for that. I do

appreciate that. For the clarity around the school tax, I think that was

an important piece as well.

Could the minister provide the same detail for fuel and carbon

taxes, please?

Hon. C. James: The total drop for the

section that the member is referring to is

$382 million. To divide that out, it’s $117 million for fuel and $265

million for carbon tax. Similar to the other one, which didn’t include

the school tax piece that was related to COVID support, this does not

include the decision to delay, until October 1, the carbon tax increase

that was in place.

S. Bond: Thank you to the minister, and thank you, also, to the Chair. I’m

juggling a lot of buttons here. Thank you for your patience, hon. Chair.

It is appreciated.

We look forward to having some further discussions, obviously,

about the carbon tax — the impacts. The minister would also be well

aware of the report that was tabled today by BCBC around a low-carbon

plan. We look forward to having some more discussion, about that whole

sense of the carbon tax, in the days ahead.

Not surprisingly, the other line item that we would like to have

additional clarity on would be the natural resource revenues. If the

minister could provide those numbers for us, that would also be

appreciated.

[2:20 p.m.]

Hon. C. James: Thank you to the members for their patience as we go through,

making sure we’re getting accurate information via technology as

well.

Natural resource revenue. The total drop was $293 million. The

division of that is natural gas royalties, $141 mil­lion;

mining, $56 million; forestry, $37 million; water rentals, $25 million;

petroleum royalties, $23 million; and then other is $11 million. That

would include $8 million, for downstream benefits from the Columbia

River, and $3 million, which is just bonus bids and less activity. That

totals up to the $293 million.

S. Bond: Thank you to the minister and her staff. Absolutely, there will be

a lot of patience on both ends of the technology, I’m

certain.

Obviously, as we look at those numbers, we can certainly take a

moment to reflect on the significant challenges that the government is

facing. I mean, when we look at lost revenue and how we’re going to

manage through that, there are going to be some significant questions

about how we look at those resource revenues in particular and the

revenue lines there.

I want to now move to projected net income for some Crowns and

agencies, etc. We’ll start. The question for the minister and her staff

would be: at this point, what is the projected net income at B.C.

Hydro?

[2:25 p.m.]

Hon. C. James: For both B.C. Hydro and ICBC, we didn’t include an update in the

scenario that came forward in July. As I mentioned, there are a number

of pieces that have to still be collected. That’s why I felt it was

important to be clear that this simply was an estimate, a snapshot in

time. Both of those numbers, updates for B.C. Hydro and ICBC, will be

coming forward in Q1, which will be coming in September.

S. Bond: Well, thank you. I appreciate that response from the minister. But

in essence, this is pretty much the same question that we’ve looked at

related to the other areas. We certainly were not able to…. When we

listened and worked through the other critic opportunities with the

ministers responsible for Crown net income, we were a little concerned

that there doesn’t seem to be a clear sense of what those numbers

are.

Can the minister perhaps try once again to explain to us why at

this point there isn’t some sense of a projection of net income? We

understand there are a number of other factors to consider. Perhaps I’ll

attempt the question in a different format.

There is an $882 million loss in table 2, then, for each Crown.

Can the minister perhaps tie it to the lost revenue that’s noted? What

is the assumed loss? We understand that she can’t…. We’re not arguing

that there aren’t details outstanding, but at the very least, can the

minister give us a sense of what the assumed loss is for each Crown? In

this case, we’re starting with B.C. Hydro, and she’s referenced ICBC.

What would the assumed loss be for B.C. Hydro and ICBC?

[2:30 p.m.]

[S. Gibson in the chair.]

Hon. C. James: The member mentioned the two Crowns listed in the July statement,

in the July economic update. Those two Crowns were the LDB, Liquor

Distribution Branch, and the B.C. Lottery Corp. Those were the two

Crowns that were listed there. The drop was 882. The vast majority, 857

of that, was the B.C. Lottery Corp., because obviously casinos were

closed down, and therefore, that had an impact on that number — and 37

from LDB.

There was an “other,” if the member is adding them up. There was

another that just included Columbia River Basin and some adjustments

that were made there. So those are the only two Crowns that were

reported on in the July assumption.

Then the member asked about ICBC and Hydro and why they weren’t

included in July. This is a discussion we had when we came out with the

statement in July as well — to recognize that the economic statement was

simply a point in time. With ICBC and B.C. Hydro, both of them have

pieces that they are continuing to look at, to be able to look at

averaging out to give us a Q1 number.

For example, ICBC obviously had huge change in usage during the

early stages of COVID — very few accidents, very few vehicle usages,

etc., people not renewing their insurance. Then investments. Again,

because of the stock market and investments, a very volatile

time.

We will be reporting out. Q1 will be coming shortly. It won’t be

that long before we’re into September, and we’ll be reporting out. Then

we’ll have another couple of months to be able to do a more accurate

assumption on that piece.

Hydro is very similar. Of course, they look at rate-regulated

accounting. That, again, is a process that takes some time, that is done

over time, and we’ll have a read on that in first quarter as

well.

S. Bond: Just, then, to be completely clear, the deficit that was noted,

the drop in revenue there, was only based on BCLC and BCLDB modelling. I

think the minister would recognize that without any numbers for B.C.

Hydro or ICBC, that poses an incredible risk to the taxpayers of British

Columbia.

I know that one of my other colleagues, who has incredible

expertise on this file, will be asking some follow-up questions. But I

want to just have the minister…. You know, I understand that the next

quarterly is rapidly approaching. Is the minister saying that she and

her staff did absolutely no modelling or has no even basic assumptions

about B.C. Hydro or ICBC? Frankly, I would find that hard to

believe.

[2:35 p.m.]

All of us understand that the economic update was a point-in-time

reference, but to be clear, we are talking about what could be

incredibly significant risk to the taxpayers of British

Columbia.

I’d be very interested in knowing: was there any modelling done by

the Ministry of Finance related to the projected net income of B.C.

Hydro and ICBC, even as a point-in-time reference?

Hon. C. James: Just a couple of things that I think are important. The member

will know, if she looked at the July statement and heard the public

statements I made when I introduced the economic statement, that I

talked about a number of risks. The member is quite right. There are a

number of unknowns. There are a number of risks that exist, both on the

plus and the negative side. That’s the challenge of the pandemic — the

reality of not knowing what’s ahead, of not knowing the challenges

ahead.

Certainly, when it’s early going, the trends and the volatility

create those kinds of difficulties. It’s why, as I said, there was a

long page of risks that we talked about when making that statement and

delivering that statement to the public. But we felt it was important to

bring forward the information that we did have at that point.

Just a couple of examples. The member asked about why we wouldn’t

be using them right now, why we wouldn’t be looking at assumptions right

now for Hydro and ICBC. Well, those organizations also need their

statistics to be able to give us the kind of information that we need.

For example, the first Q, the first quarter stats for ICBC, come in

mid-August, so those will be stats coming in shortly. They don’t have

those stats around their first quarter.

Again, I talked about the volatility — people not renewing their

insurance but also lower claims and fewer accidents, falling revenue

from investments and then investments coming back again. Again, with all

of that volatility, that information is being gathered and will be

gathered so that we can make sure that that’s there for Q1.

[2:40 p.m.]

The same applies to B.C. Hydro. Both of those Crown corporations

are putting that information together. They know that Q1 will be there.

They will have their own first Q information to be able to provide that

data to us, and then that comes in the public reporting that comes at

Q1. Yes, a risk, and yes, identified as a risk in July.

S. Bond: I appreciate the minister’s response. Of course I saw the update,

heard the commentary and saw the list of risks.

One final question. I know that there will be a lot more

discussion about these, especially the Crowns. Can the minister then

simply tell me, did the ministry do any financial modelling based on

projected net income for B.C. Hydro or ICBC? I totally grant the

minister that there is volatility and there are all of those factors

that the minister described, but the question is: did the ministry, did

the minister, look at what the projected net income would potentially be

for B.C. Hydro and ICBC? Was there any modelling done by her

ministry?

Hon. C. James: No, as I already said. Because of the volatility and because of

the information that isn’t available until, as I mentioned, mid-August

when you’re looking at Qs, assumptions, modelling was not done for B.C.

Hydro and ICBC. That will come in Q1.

S. Bond: Thank you to the minister for that response. I certainly

understand volatility. I’m surprised by that answer a bit.

But one final question on this for the moment. There is a cabinet

OIC in place, and it directs B.C. Hydro’s revenue to be set at $712

million by the BCUC. Does that still remain effective? Should we then,

or can we, treat that as the expected income for B.C. Hydro?

Hon. C. James: The member is quite right: $712 million is the income set for this

year and next. We have no plans at this point to change that, but

obviously, no one planned the pandemic either. I think we all know that

the world could change, but at this point, we don’t expect to make any

changes to that over the next two years.

[2:45 p.m.]

S. Bond: Thank you for that clarity. I do appreciate that.

I want to talk just briefly about the impacts to

taxpayer-supported agencies. I’m hoping the minister can provide us a

bit of a breakdown on some of the impacts. Let’s look at, for example,

international student enrolment. We’ve certainly seen the impacts. In

fact, recently there was an

article that talked about the state of

post-secondary education around the world and included Canada amongst

that long list of countries it examined. The hard-hit sector would be

post-secondary institutions because of the incorporation of a

significant international student enrolment.

Let’s start with that one, perhaps. Could the minister provide me

with a sense of what assumptions were built into the scenario regarding

international student enrolment?

Hon. C. James: There is no question. The member is quite right: the international

student enrolment will have a big impact. It’ll have a big impact mainly

on post-secondary education, but as the member would know from our days

as school trustees, it also has an impact on some school districts that

take in international students as well.

Just a bit of a breakdown for the member. Of the 869 around a loss

for taxpayer-supported agencies, the largest amount of that, 775, is

international tuition. Again, I want to stress — and I’ll do this

throughout all the numbers — as the member will know, this is simply a

scenario.

There was work done by the post-secondary ministry, of course, to

contact the universities and the colleges to look at their numbers. It’s

a best guess, a best estimate, a best scenario at this stage, because,

again, until actual enrolment occurs…. They know there have been some

students who have remained in British Columbia who they’re still looking

at as students.

That’s a piece that is there. A drop in $63 million from school

districts — that’s the amount, obviously a much smaller amount, for

international students. Then a $31 million drop was PavCo. That’s the

convention centre and B.C. Place drop.

[2:50 p.m.]

S. Bond: One last question before I move on to another section. I’m

wondering if the minister could…. There’s a lot of uncertainty for

institutions, obviously, and concerns about how they’re going to

continue to operate and manage all of the funding. It’s the same for

school districts.

Can the minister, perhaps, give us a sense of…? Will

universities…? Obviously, lower tuition income. What is the government’s

plan in terms of holding those institutions whole? How are those funding

gaps going to be managed by the government? Has the Minister of

Finance…? What is her plan, working with the Minister of Advanced

Education, to actually deal with those dramatic drops in

revenue?

Hon. C. James: Yes. There is no question that this will be, again…. We talk about

volatility. We know it will be a challenging year, certainly, for

post-secondary, in particular.

The Minister of Advanced Education is working closely with the

universities and colleges. Also, thanks to the universities and

colleges. They’re also working hard on their budgets right now. Many of

them are looking at where they can make adjustments, where they can

address some of those pressures.

We’re monitoring that closely from the Ministry of Finance. Again,

early going yet. But this is a piece that we’ll be watching

closely.

S. Bond: Thank you to the minister. I’m certain that MLAs right across the

province who are connected to post-secondary institutions will also be

monitoring that, and we’ll be hearing back from those institutions about

enrolment numbers and the challenges that we’re facing. We certainly

want to make sure that our students continue to have the opportunities

that they deserve.

I’m going to switch over, for a few minutes, before I turn it over

to one of my colleagues. I want to talk a little bit about the regular

budget, as we would call it, that the minister tabled.

I’m wondering if the Finance Minister could tell me a little bit

about how COVID-19 has impacted the ministry’s expenses. We know that

there have been extra programs outlined and implemented. There has been

a variety of things.

I’m wondering if the minister can tell us how COVID-19 has

directly impacted the ministry’s expenses. Perhaps, in that answer, she

could let us know whether or not the ministry itself has drawn on any

contingency allocations or supplementary estimates funding. If that is

the case, where, in the ministry budget, were those amounts allocated?

If the minister could bundle those answers for me, that would be

helpful.

[2:55 p.m.]

Hon. C. James: There are four areas that impact the Ministry of Finance that have

come from contingencies. The first is the B.C. emergency benefit for

workers. That is, as the member will know, over $1 billion. We’re

estimating it at roughly $1.2 billion. That comes from $5 billion COVID

contingency. So those are dollars that came to the Ministry of Finance

to be able to provide the $1,000 through the emergency benefit for

workers.

The second piece is the commercial rental assistance program. The

member will know that this is for a program administered by CMHC with

the federal government. That’s $79 million, and that again comes from

the $5 billion. These are the areas that impact the Ministry of Finance,

as the member was asking.

The third area is the pandemic pay. That’s $106 million for the

pandemic pay — our portion. Then the last piece would be admin costs.

These would be, as the member has said, a number of programs and

services that the Ministry of Finance has put in place to be able to get

the dollars out. That’s $1.062 million. That’s coming, again, from the

$5 billion.

S. Bond: Thank you to the minister for that response. I appreciate it. I

know that we’re going to have some very specific questions about some of

those programs as we move later into the estimates.

[3:00 p.m.]

I’m going to ask one final question for now about the budget that

was tabled and the assumptions around that, and then I’m going to turn

the floor over. So I’ll ask the question, and then I’m going to turn the

floor over to my colleague from Kamloops–South Thompson. He’ll begin his

questions, and then we will certainly have more follow-up questions from

the Finance co-critics in the hours and days ahead.

For now, the last question to the minister is really about

caseload assumptions, as she described them in Budget 2020. Just for the

record, perhaps the minister could clarify for us: have caseload

assumptions, since the budget was tabled, changed? Are they up or down?

And how do those changes impact total expenses in the budget?

We’re very interested in caseload assumptions and how those might

be addressed, so I’ll wait to hear the minister’s answers.

I know that my colleague from Kamloops–South Thompson is, I think,

in the House physically, so he’ll begin his questions. We’ll wait for

that answer and then turn it over to my colleague.

Hon. C. James: There wasn’t a breakdown of the specific caseload pressures in

ministries. But if the member looks at the pandemic pay and the dollars

that have gone out in the pandemic pay…. I know we’ll have more

discussion of that over the next couple of days. It’s a given that many

of the pressures and the funding that went to those ministries was

related to caseload pressures during the pandemic.

That would include Social Development, for example — the caseload

pressure, obviously, on income assistance, on disabilities and on CLBC.

That would include child care. That would include the Ministry of

Children and Families. That would include Health. And that would include

Housing, particularly in the homelessness area. Those were all funded

through the $5 billion pandemic, because they’re pandemic impacts, but

obviously, some of that impact would have been caseload as

well.

[3:05 p.m.]

T. Stone: I’m really pleased to take my place in this estimates debate with

respect to the Ministry of Finance estimates.

I, too, will add my initial comments that my colleague from Prince

George–Valemount mentioned earlier — that we certainly all understand

and appreciate the incredible work that the folks, the men and women, in

the ministry and all of the related agencies do on a day-to-day basis in

normal times. We are certainly not in normal times at the moment and

won’t be for likely the considerable future, so I take my hat off to all

of those folks for the great work that they do on behalf of British

Columbians under a tremendous amount of stress and duress, I’m sure, on

many days.

To the Minister of Finance, a couple of different topics that I

would like to cover today. The first involves strata insurance.

Certainly, as the minister knows, we had an extensive debate in second

reading on the strata legislation that was brought forward. I guess the

most common theme that we’re all hearing — and we were hearing this

before the legislation was brought forward, and we’re hearing this still

to this day — is: where is the financial relief? Where is the immediate

assistance for 1.5 million British Columbians living in strata units as

estimated by the B.C. Financial Services Authority?

Some of these folks, against the backdrop of COVID and potentially

having lost their jobs or having had their small business impacted in a

significant way…. Maybe they’ve lost one income out of a couple in the

household. Whatever their circumstances are, in addition to those

financial stresses, they have also been hit hard, these strata owners,

with huge increases in their insurance costs, which have flowed through

to $200-, $300- or $400-per-month increases in monthly fees, one-time

special assessments, etc. People cannot afford it.

My first question to the minister would be this. As that

legislation and that strata plan were being put together, did the

minister consider including, as part of that plan, financial assistance

for people under significant distress that would impact them in a

positive way in the here and now? Did she consider that kind of support?

If she didn’t, why? Why was no financial support actually included in

the action plan that government brought forward?

Hon. C. James: I know the member has worked very hard on this. In fact, as the

Minister of Housing said when the legislation came forward, there were a

couple of pieces that the member had raised that were included in the

legislation. I know this was, as the member has said, canvassed very

well during the debate on the legislation.

To go back a bit, I think it’s important to recognize that exactly

the reasons that the member raises — the pressures that people are

facing, the challenges that are being faced for those individuals who

are in stratas and are seeing their insurance go up….

[3:10 p.m.]

That’s exactly the reason that we, in fact, asked the BCFSA to

investigate this issue — to make sure that we got a good read of where

things were at, to make sure that we had a good recognition of the

challenges on some of the approaches that could be taken. We looked and

are continuing to look at all the options that are available to

us.

The legislation, as I know the member has heard myself say and the

minister say, is a first step to address a number of the pieces —

looking at the drivers in the market, looking at how we lower risk,

which is critical in all of these pieces. But it is simply a first step.

We recognize that as well.

We will be looking forward to the further report coming forward

from the BCFSA. If more action — and I expect that there will be more

action that will be needed — comes forward, those, again, will be

considered, just as we’re considering everything.

T. Stone: Well, the BCFSA process, which the minister just referenced, which

involved the provision of a draft or initial report with some initial

findings…. That was now several months ago. Everyone is expected to now

wait for a number of months for the final recommendations to come in the

fall, if, indeed, that happens on that timeline.

I think the question to the minister, as I mentioned a moment ago,

is: what consideration of financial support, financial assistance was in

the minister’s purview of thinking over the last number of months? I’ll

give her one, more specific, in asking this question. Has the minister,

has the government considered providing a tax holiday to strata owners

on the 4.4 percent insurance premium tax, which the BCFSA report that

the minister mentioned…?

There’s about $300 million of strata insurance premiums that are

collected every year in British Columbia. That was in that BCFSA report.

A 4.4 percent tax on that amount works out to about $13.2 million on an

annual basis. That would be a start, in terms of leaving that $13.2

million in the pockets of strata owners for a period of time. Is that

something that the minister has considered, and is that something that

the minister is prepared to consider implementing in the near

future?

[3:15 p.m.]

Hon. C. James: Again, I know the member has had this discussion with the Minister

of Housing as well. Very clear. I mean, the tax is not new. It’s been

collected for decades on all kinds of insurance. It certainly isn’t the

cause of the rapidly increasing insurance premiums. If we averaged it

out for each strata owner or condo dweller, you could be looking at a

savings of $20 for each of those individuals. That’s certainly not

something that’s going to address the pressures, as the member knows

well, that people are facing.

Certainly, also, no guarantee that those tax savings will be paid

on to consumers who pay that property insurance. A company could reduce

their premiums. The company could not pass on the savings at all, given

the market conditions.

I think, as the member knows…. I know there was a good discussion

on this issue during the legislation. There are a whole number of

pieces. This is a private-market challenge and has to be dealt with from

that perspective. That’s why it’s so important to make sure that BCFSA

does the work that they’re doing to give us a read of what kinds of

things can be done.

Transparency is critical. We know that addressing the issue of

transparency, whether we’re talking about insurance and the cost of

insurance, whether we’re talking about companies that are getting out of

the insurance and not providing those kinds of premiums, making sure

that those pieces are addressed, as they were through the legislation,

is an important step. But again, simply a first step. I think, as the

member has been quoted often — we’ve certainly said this — and BCFSA

pointed out in their report: there is no quick fix. There is no quick

fix for this issue.

This is a longer-term piece. We certainly recognize that we have

to address it and that people who are paying the increasing insurance

are struggling. There’s no question about it. That’s why we’re moving

ahead with the legislation. That’s why we moved ahead with it, and

that’s why we’re having BCFSA come back with their second piece, the

interim report, and then the final report for us as well.

T. Stone: The minister indicated that there would be no guarantee that any

savings from a tax holiday on the 4.4 percent insurance premium tax

would actually be realized by strata owners. Well, you know, there are a

number of mechanisms that the minister has available to her. These

individuals could be provided rebates on these amounts. There are a

number of ways to ensure that the dollars remain in the pockets of

strata owners who are being hit hard.

Again, the point is that the plan that was brought forward, the

legislation that was brought forward and debated in this House, really

provided no immediate supports for, no immediate assistance for, people

who really need it. That’s what we’re trying to understand — what the

government’s plan is, moving forward.

This insurance premium tax has been increasing steadily over the

last number of years, I think in direct correlation to the massive

increase in what insurance companies are charging. Again, the minister

knows well: 200, 300, 400 percent increases year over year in the total

dollar value of the insurance premium that’s charged to strata owners,

strata corporations. It’s outrageous. It’s totally unacceptable. It’s

irresponsible, and it’s not affordable for people.

But as those premiums have increased, the 4.4 percent tax

continues to be collected. So the government is actually realizing an

ever-increasing amount of tax from this insurance premium tax. Can the

minister tell me: over the three-year fiscal plan, what is the total

additional dollars that the Ministry of Finance will collect in the form

of this insurance premium tax?

[3:20 p.m.]

Hon. C. James: This is table A9 in the budget — $660 million for ’20-21, $670

million for ’21-22 and $680 million for ’22-23. That’s for the broad

insurance. That’s not broken out. That’s for the broad insurance amount

that’s built into the budget.

T. Stone: What portion of the $660 million in ’20-21, the $670 million in

’21-22 and the $680 million in ’22-23…? What portion of those totals

represents the taxes collected on the strata insurance

premiums?

Hon. C. James: This is a broad number that comes in. It’s basically just a 4.4

percent across all insurance. Whether it’s commercial property, car,

properties or whether it’s strata or not strata — it’s not broken down.

The branch just brings it in.

I mean, it’s an interesting piece for us to take a look at, to

see, as we do this review. I expect BCFSA may have something to say

about this, as well, whether we want to start tracking that separately.

At this point, it’s just the broad number that comes in from the

branch.

T. Stone: Well, I would strongly urge the minister and the government to

direct the BCFSA to do that. Certainly, in their initial report, they

did estimate…. I think the number was $300 million per year as collected

in the form of tax on strata insurance premiums. They indicated that

that amount was increasing year over year, obviously, in direct

correlation with premiums going up.

[3:25 p.m.]

I guess on this piece we’ve heard a lot from the government and

from the minister about a series of measures that they’ve taken and,

certainly, a strong view that they have about not wanting government to

profit off of real estate market taxes. We do know that there is an

approach there that the government has implemented over the last three

years.

I guess my last question on this piece would be: if that’s the

general approach — not wanting to profit off of these market real estate

taxes — why would this have not been made a higher priority sooner by

the minister, insofar as looking at this insurance premium tax,

understanding what portion of it is applicable to strata insurance

premiums and what mechanisms could be implemented to provide tax relief

for people here — to leave these dollars in the pockets of strata

owners?

Hon. C. James: I think I come back again to the fact that there is no

presumption, even if the tax was reduced, that any of those savings

would, in fact, go to the strata owners. Our focus is making sure that

the strata owners are seeing relief from the pressures they’re facing.

There certainly would no requirement for those tax savings to be passed

on by a company that pays them. They could simply utilize it themselves.

So we’re focused on what we can do for the individuals — what we can do

to make sure that their issues are addressed and the pressures that

they’re facing, cost-wise, are addressed.

When it comes to how quickly we moved on the issue, I think it’s

very clear. When the member looks at when we referred this issue to the

BCFSA, when the concerns were coming forward, when we started seeing

these kinds of challenges, we knew, again, that a private sector issue

was going to be a challenge to address. That’s why we asked, and why I

asked, the BCFSA to take a look at this issue, to do an investigation,

to give us an interim report, to begin the work that needed to be done

through the legislation and then to bring a report forward to look at

further steps that could be taken — this being simply step 1.

T. Stone: Well, again, leaving the tax dollars in the pockets of financially

distressed strata owners could be done through a direct rebate to them.

That would assure that the issue that the minister mentions — the

concern she mentions around those dollars being pocketed, perhaps, at

the broker level and so forth — wouldn’t happen.

I would urge the minister to again not rule out, in the near

future, hopefully, taking another look at the insurance premium tax as

one step amongst a series of additional steps that, frankly, need to be

taken quickly to alleviate the financial distress that is being faced by

so many British Columbians due to soaring strata insurance

costs.

I will move to the next piece. Is the minister willing to consider

and commit to extending the property tax deferment program for a period

of time — again, as another tool that would work for some and would not

necessarily work for others — as a strategy that could be embraced by

some of these strata owners in an effort to grapple with these

skyrocketing strata insurance costs?

Hon. C. James: I just want to make one point — I think it’s an important one —

around the insurance tax that is paid. The premium tax is paid by the

insurance companies, not the individuals. It’s just important to make

sure that we recognize that — that that is the company itself. So they

have a choice of whether they pass those savings on or not, if we reduce

down the tax. I think that’s where a lot of the issue comes around

what’s possible and what isn’t.

[3:30 p.m.]

The issue of the property tax deferral. The member will know this

from being in government — that the eligibility was expanded. So there

are 80 percent of British Columbians who are actually eligible right now

for the deferral. Whether everybody is aware of that…. Perhaps it’s

another good point around getting information out.

[R. Chouhan in the chair.]

I’m not ruling out anything in future steps. I’m not ruling out

anything. I think we’ll get the report from BCFSA; we’ll take a look at

it; we’ll work with the Minister of Housing; we’ll look at what options

might be there and look at what possibilities are there.

I appreciate the member’s ideas and the member’s proposals that

have come forward as well.

T. Stone: Thank you to the minister.

The BCFSA report that we both keep referencing here — the interim

findings also found that the largest percentage of claims costs related

to water damage. Forty-six percent of all the total claims costs, I

believe, from 2017 to present day relate to water damage. I think the

number in the report was 56 percent for 2018. It doesn’t matter who you

talk to. The prevalence and the severity of damage caused by water seem

to be a growing problem and a part of what’s driving the increased costs

of insurance.

One of the ideas that we had proposed way back in February was for

the creation of a water damage prevention program, a program that would

offer some funding in the form of one-time grants to homeowners to make

those necessary upgrades, whether it be low-flow toilets, steel-braided

hosing, modern recessed fire sprinkling systems, shut-off valves — those

kinds of things.

I’m wondering if the minister can indicate whether or not she is

considering and willing to consider the creation of that kind of a

program. It would seem to me that would be a good way to push some money

out there quickly to at least help people make these kinds of the

upgrades necessary, which should have the impact of perhaps putting some

downward pressure on rates in the months and years ahead.

Hon. C. James: I think this, again, comes back to the…. We’ve talked about the

BCFSA report that’s coming forward. BCFSA did identify water damage as

one of those pieces in their interim look. They wanted to talk more with

consumers.

I think we all know that there are stories of stratas that have

done a great job around their maintenance and kept their maintenance up,

and others that have not and the challenges that that’s created in the

market. But the challenge is, most importantly, for all the strata

owners in buildings where maintenance has been deferred and they haven’t

looked at their maintenance. So it’s certainly a piece.

[3:35 p.m.]

Again, I’m not closing the door to any ideas. It’s certainly an

idea that we expect we’ll hear more from when the BCFSA report comes

forward, because they did identify it early on. So I’m not closing the

door to any kinds of options that may be workable to address this

issue.

T. Stone: Well, in the spirit of not closing any doors to any ideas, the

member for Abbotsford West introduced, via an amendment to the

legislation that was before this House in recent weeks, the concept of

allowing for self-insurance in the strata insurance space. The minister

would know well that British Columbia is well-positioned on this front,

insofar as the captive legislation, as it’s called, that’s already in

place. There’s a bit of a framework there. There’s a long history of

different types of organizations that have embraced self-insurance. B.C.

Ferries has a self-insurance plan. The Municipal Finance Authority and

all kinds of law firms use that concept in terms of their partner

insurance and so forth.

Recognizing that the international insurance industry is taking

advantage of British Columbians today, through these outrageous,

irresponsible, unaffordable insurance increases year over year, is the

minister prepared to do the work and to direct BCFSA, perhaps as part of

this, to do the work to pave a road here to a day, hopefully in the

not-too-distant future, where British Columbians who live in stratas —

those 1.5 million British Columbians — may have the choice of purchasing

existing insurance products, as they know them today, or opting for a

self-insurance option? Is the minister prepared to do the work to look

into that for British Columbians, who are being hammered by these high

insurance costs?

Hon. C. James: I know the member knows this, but just to remind the few people

that might be listening, this option does exist already. There is a

regulatory structure in place already. Groups can utilize this kind of

structure, a self-insurance program, currently. But we recognize that

perhaps this might be an idea that could be looked at. So we’ve

certainly asked BCFSA to include a review of this idea in their report

as well.

T. Stone: Well, I will certainly look forward to reading what the BCFSA

comes back with on that. It sounds like the minister has provided some

direction to them on this. Certainly, we agree there is a framework in

place here in British Columbia. That’s why it makes this such a

potentially exciting option.

However, as the minister has just acknowledged — and I will

reinforce what she has acknowledged — there is a tremendous amount of

work that would be required, regulatory work to do on this, and likely

the requirement for government to step up for a period of time, whether

it be a year or two or three years to provide some financial bridging

support of some kind. So a lot of work to do on this front. But I

appreciate hearing the minister say that it is something that BCFSA has

been asked to include in their upcoming report.

I asked this question during the debate on the bill, to the

Minister of Housing. The question was around transparency.

[3:40 p.m.]

I think one of the challenges that many British Columbians who are

facing these high insurance costs have expressed to us is: “I don’t

understand how they arrive at these numbers. How is it possible that my

insurance premium can go from $80,000 one year and the next year, 12

months later, with no claims against my building, we’re now expected to

come up with $450,000?” This is one example. Water deductibles have gone

from $5,000 per occurrence to $250,000 per occurrence. I mean, it’s

ridiculous.

There has been a pretty wide call — I certainly support this call,

and my colleagues on the opposition support this call — for greater

transparency. The data and the information that insurance companies

provide BCFSA should be made available to the public.

Now, the Minister of Housing’s response to me on this question was

that there would be a data component included as part of the BCFSA

report expected this fall. Fair enough. I expect that. I think we all

figured that that would be the case.

When I asked the minister if she would be willing to commit to

ensuring that there is ongoing transparency — not just as a one-off, in

a special case of a report that has been asked to be commissioned, but

as an ongoing manner of doing business, a requirement to provide the

transparency to British Columbians on how the insurance companies are

arriving at the numbers that they are, the data and the information that

go into those calculations — she was non-committal.

I would like to ask the Minister of Finance today if she could

commit to ensuring that beyond this next update or this next report from

BCFSA this fall…. Is the minister prepared to commit to ensuring that

there is transparency on a go-forward basis, beyond that, so that

British Columbians have the data at their fingertips, the information at

their fingertips, to better understand — they might not like it — how

these insurance companies are arriving at the outrageous numbers that

they are?

Hon. C. James: I think there are a couple of different pieces around disclosures,

as the member will know.

[3:45 p.m.]

One, obviously, is in the legislation. We want to make sure that

individual strata owners have full disclosure, whether it’s around fees

or a company that’s not going to renew or a company that is going to

increase the insurance. We want to make sure that notice and that kind

of information get to the individual owner.

I think the member — correct me if I’m wrong — is more looking at

commercial information and information that BCFSA may have the ability

to be able to collect and to analyze, to have a better sense of why

we’re seeing some of the kinds of increases that we’re seeing — how

those numbers are arrived at. BCFSA does have the ability to be able to

collect that data. They’re working with the insurance companies. But

they do have the ability to collect filing information as well, if they

need to.

T. Stone: I appreciate that. I guess what British Columbians are saying —

those that are being really hard hit by these increases — is they’re

wanting some answers. They want to see the numbers, the data and the

information themselves. Frankly, until British Columbians have, perhaps,

a choice in this space, a self-insurance choice, which would be

wonderful to see in the not-too-distant future, they have to deal with

the existing insurance sector.

We happen to support the call for much greater transparency right

down at the consumer level of, yes, the insurance company information

that they’re providing the BCFSA. So I guess one final time on that: is

the minister prepared to make some changes here to commit to ensuring,

beyond this next report from the BCFSA, that British Columbians will be

able to easily, at no cost, access the information that would provide

them with some answers, from a data and information perspective, as to

how their premiums have gone from $80,000 to $450,000 in one year, as

one example?

Hon. C. James: I’m sure there are all kinds of ideas that will come forward

through the report and through the consultation. I think we have to

remember that BCFSA is doing that consultation right now. They’re

talking to individuals. They’re talking to stratas. They’re talking,

obviously, to insurance as well. But they’re also having those

conversations with the strata owners.

I don’t want to prejudge what the approach may be that BCFSA may

recommend or may bring forward or the ideas that may come forward from

the consultation. But certainly, I’m committed to transparency, and I’m

happy to have a further conversation, after the report comes out, with

the member, as well, to look at what might be possible, going into the

future, to add to the transparency for strata owners.

T. Stone: The legislation that the government brought forward has 16

sections in it. Fourteen of the sections require either further

consultations, as the minister has mentioned several times in our

back-and-forth here today…. A number of the sections also don’t come

into force until some regulations have been developed, and those

regulations, in many cases, require ongoing consultations as well.

Wrapped around all of that is a commitment from the government, which

we’ve heard many times, that this is just a start and there will be

additional things coming.

Can the minister provide, again, the 1.5 million strata owners out

there, beyond “This is a start, and there’s more coming…”? Can these

hard-working folks, who are dealing with these massive increases in

their strata costs, look forward to — and can the minister be specific —

any financial measures that are going to provide immediate financial

assistance to these folks this year?

[3:50 p.m.]

Hon. C. James: I guess we’re kind of coming full circle to the place we started,

which is the fact that there isn’t a quick fix for this private sector

challenge. I wish there was, but there isn’t. It is something that we

have to work on long term. I certainly hope that the definition that is

in the legislation around defining what is common property and what gets

insured will address some of the pieces.

It’s certainly been a discussion in many of the stratas that I

talk to. They’ve begun that work. They’ve started looking at their

strata. They’re looking at more definition there that may actually bring

their rates down. That’s a piece that I think could provide some

support. Certainly, the banning of fees, I think, will help as

well.

I think this is a longer-term piece that has to be worked on. It’s

all of our obligation to work on this on behalf of, as the member has

pointed out, the hundreds of thousands of people who live in stratas and

are impacted by this.

T. Stone: I hope that that happens as well. It’s a tremen­dous amount

of financial distress that’s being faced by a lot of British Columbians,

particularly with the compounded effect of COVID and job loss and small

businesses going under. We’ve got to do more. This government needs to

do more to support people that are facing these outrageous increases in

their strata insurance costs.

We’re going to continue to urge the government to do more, and

we’ll continue to ask questions, and we’ll continue to look forward to a

debate on this. Hopefully, there are some much more tangible actions in

the near future that will provide immediate assistance.

I’d like to turn our attention to a topic completely unrelated to

strata, the B.C. Infrastructure Benefits Corp. I’ve got a series of

questions here. I’ll just ask it in sort of a three-part question. It’s

been two years since the government created B.C. Infrastructure

Benefits.

My first question would be this: what has been the total cost that

has been spent establishing and staffing up the BCIB? Two, how many FTEs

are employed at BCIB as non-project workers? And three, what is the

total value of services contracted by BCIB so far, and what services are

being contracted?

[3:55 p.m.]

Hon. C. James: The total budget for BCIB for ’19-20 was $8 million. For ’20-21,

it’s $11 million. The number of staff who are not project workers is

Then, if I could just get a clarification from the member on the

services and what he meant by contract services. Maybe he could give me

a little more specifics, just so I make sure I get the accurate

information — what the member would be referring to in that number that

he’s looking for.

T. Stone: Well, again, I’m just looking for the total value of services that

are contracted by BCIB, so the services that they contract to bring in

and what that mix of services looks like.

Hon. C. James: On the total value of services contracted, the only contracted

service would be the payroll system for BCIB. In order to save money,

they use the contractor that has the contract for the government system.

They used the government system, and that was $1.4 million.

T. Stone: Under the total revenue

section of B.C. Infrastructure Benefits

statement here, it refers to a service fee that provides for total

revenue of $11.3 million in the current fiscal year, and then it

increases to $15 million in each of the next two years of the fiscal

plan — this service fee revenue. I’m just wondering if the minister

could explain what this service fee revenue actually entails?

[4:00 p.m.]

Hon. C. James: The member is talking about the fee, what is involved in that.

Yes, the owner pays BCIB for services that are provided to carry out the

CBA, the community benefits agreement. That would include — remember

that BCIB is the employer — everything from what you would think of as

an employer: the basics around payroll, the basics around human

resources, project management, IT, making sure that the credentials are

there, that those pieces are in place, a safety program and management

for the safety program, financial planning and reporting, compliance,

risk management. All of those pieces are included as part of that. An

active role, again, around the worksite.

[4:05 p.m.]

They provide on-site supports and services as well, both to the

workers as well as the contractors. Labour relations — I think I

mentioned that. There’s Indigenous and gender competency training that,

again, is provided for the workplace to ensure that the equity groups

are not only able to work on the project but are comfortable and stay on

the project and continue to build that diverse workforce that is so

important for our province and so important for the industry as

well.

T. Stone: Can the minister tell us what is involved in the outreach and

engagement expense line item? Again, that provides for $1 million this

year, $2 million next year and $2 million the year after that, so $5

million over the course of the fiscal plan.

What work is constituted within this outreach and engagement

expense line item? Do any of these expenditures in this line item

provide for advertisements promoting community benefits

agreements?

Hon. C. James: I’m glad the member is asking these questions, because I think

these are critical questions to the community benefits agreement and the

opportunities that it provides to people in the province and the

benefits that come to the people in the province by having, again, a

diverse workforce.

Certainly, things will shift with COVID. But pre-COVID, as we

know…. In fact, I heard last week from a number of people in the

construction industry that they’re still facing challenges around having

a broad enough work base — well skilled, well trained and ready to be on

the workforce now for a number of the projects that are there. The

outreach and engagement piece is a critical piece to be able to make

sure that we are engaging with communities.

The simple question…. First, the question that the member asked

about advertising — no, there’s no advertising being done through BCIB.

BCIB, through their outreach and engagement, works directly with

specific communities.

[4:10 p.m.]

They engage with all of the Indigenous communities. They reach out

to organizations that work in the area with a number of these diverse

communities, like MOSAIC and like women in trades. They work with those

organizations. They work with the communities themselves to look at

opportunities for local jobs, because as the member knows, that’s part

of the project and looking at the projects — looking for diverse

individuals to work on these projects as well.

Then I think that a really critical piece of all of this, of

course, is the referrals that are done for people who may have some of

the skills and have shown an interest and expressed an interest in

working and have engaged through this process but need other skills and

other training.

The referral…. We have referral agreements through BCIB with over

30 organizations around the province. Again, it provides an opportunity

for people to get those skills that they need to be able to go into the

workforce. As I said, that’s not a benefit simply to the projects. It’s

a benefit, in fact, to all British Columbians, because these people will

continue to work, likely in their field, and provide those skills to all

of us.

T. Stone: Well, certainly we take issue with the minister’s comments that

the community benefits agreements actually provide any tangible benefits

to the public. We’ll talk about a few projects in a moment, but every

project that has a CBA attached to it has escalated significantly in

cost. Every project that has a CBA wrapped around it has seen scope

reduction in those projects. Every project that has a CBA wrapped around

it has been delayed by two to three years.

The assertion that this is about providing additional employment

benefits and opportunities for British Columbians is perhaps the

greatest charade of this whole exercise. As the former Minister of

Transportation, I can tell this House and the minister and others that

there was never a challenge recruiting a tremendous number of Indigenous

people to projects. The last Trans-Canada project, just east of

Kamloops, we had set a new and very exciting high-water mark of over 25

percent in the entire workforce being Indigenous people from all of the

nations in and around where the project was, east of Kamloops. We didn’t

need a community benefits agreement to do that.

Every company will tell you that they, of course, look to hire as

local as they possibly can. That’s good business sense. That results in

lower costs for them — not having to worry about people travelling great

distances to and from their worksites.

There was no problem before CBAs with respect to apprentice

training. To this day, 82 percent of apprentice training is done by

open-shop workplaces. So what problem the government was trying to fix

here with the imposition of CBAs, insofar as the interests of workers

and contractors and taxpayers, is not known to me.

What I can say, however, is that if you’re one of the 19

NDP–selected unions that benefit from these agreements, it’s a pretty

good deal for you. It’s a pretty, pretty good deal. Eighty-five percent

of the construction workers in this province that work on major

infrastructure projects are actually excluded from working on these

projects, unless they choose to join one of the 19 NDP unions. How is

that fair?

I’ve got a series of questions that relate to the recruitment of

workers for these CBA projects — or the BCIB projects, I guess, is a

more accurate way of describing them. The first one, to the minister, is

kind of a two-parter.

The first would be this. To date, how many workers on BCIB

projects have been recruited directly by BCIB, and how many workers have

been brought along by contractors? The second question would be: has

BCIB had any difficulties recruiting sufficient workers to work on these

projects? If yes, is that part of what’s contributing to driving up the

cost of these CBA projects?

[4:15 p.m. - 4:20 p.m.]

Hon. C. James: Just to identify the projects. I think it’s important to recognize

the projects that are CBA projects. We currently have the Broadway

subway project, the Pattullo Bridge replacement project and then a

number of segments, as the member will know well from the area he lives

in, on the Trans-Canada Highway from Kamloops to the Alberta border.

Chase West and Illecillewaet are the projects right now that are active

in that Trans-Canada project.

I don’t have the specific numbers. We’ll get them for the member.

He asked about how many workers on the project have been recruited and

how many came with contracts. The majority of the workers on the

projects have been recruited by BCIB. Those are on the projects, as I

said, that already have work on them. Obviously, the other projects

still have to go out and get the work going.

[4:25 p.m.]

T. Stone: When the minister gets back to me — and I appreciate her offering

to do that — with those numbers, I would also, again, respectfully

request that she include in that any comment that she can offer about

any difficulties that BCIB may be having recruiting sufficient workers

to work on these projects.

In the very short amount of time that I have left, I just wanted

to ask the minister if she really, truly believes that these projects

are good value for taxpayers’ money.

Now, again, the context here, up to this point…. We have had a

number of suggestions from government as to what the impact on the

project cost is when a CBA is attached to it. We’ve heard 7 percent.

We’ve heard 9 percent. We’ve heard 10 percent. When we actually look at

a number of the projects that have CBAs attached to them, the cost

escalations are far, far in excess of 7 percent, 9 percent.

The Hoffman’s Bluff to Jade Mountain project, which is just east

of Kamloops, has had a 30 percent cost increase. That project was

originally three segments, 9.9 kilometres long. It’s now been cut back

to two segments, only 4.9 kilometres long. It originally included two

full grade-separated interchanges. It now will include one. It used to

include an underpass for emergency access at Coburn Street. That’s been

taken out. There were safety access improvements at Mattey’s Road. Those

are no longer there.

The project has gone from $199 million to $260 million, a $61

million increase. Again, it’s less highway, fewer interchanges and fewer

emergency access components for $61 million more — three years late, as

well, by the way.

Salmon Arm west. The minister mentioned this one, I believe. It

originally was a 6.1 kilometre project with three segments. It’s now

been downgraded and scoped to a two-segment project of 3.3 kilometres —

again, three years delayed. Project cost has gone up by 13.5 percent.

It’s gone up from $162 million to $184 million.

The Illecillewaet project that the minister referenced has had a

35 percent cost increase. The original budget of $63 million has gone up

to $85 million, and you get half a kilometre less of four-laning with

that project. The Kicking Horse Canyon project has gone from an original

budget of $450 million to $601 million. That’s a 33 percent cost

increase.

With all of these projects and, God help us, the Broadway line,

the Pattullo Bridge, likely the Surrey rapid transit project, if the

government decides to incorporate a CBA there…. I mean, these are

multi-billion-dollar projects with a CBA attached. Based on the track

record of cost increase — 33 percent on one project, 35 percent on

another project, 30 percent on the project just east of Kamloops and 13½

percent in Salmon Arm — one shudders at the thought of just how much

taxpayers’ money is going to be spent due to cost escalation relating to

these community benefit agreements, again, that don’t appear to be

actually providing any benefits to any workers either.

My question to the Minister of Finance, because ultimately,

literally, the buck stops on her desk, is: against the backdrop of all

of these existing CBA projects with these massive cost increases, does

she believe that these projects with these kinds of cost escalations,

scope reductions and time delays…? Does she continue to believe that the

cost of a CBA is in that range of 7 to 9 percent, and does she believe

that these cost escalations and what people are going to actually

get…?

Less for more, I say, should be the NDP slogan when it comes to

highway projects. Does she believe that these projects represent good

value for the taxpayer?

[4:30 p.m.]

[S. Gibson in the chair.]

The Chair: Minister of Finance.

Hon. C. James: Thank you very much, Chair. Welcome back.

The member has asked whether I believe that CBAs are good value. I

certainly believe they’re good value. I certainly believe they’re good

value for all British Columbians, both in the immediate and in the long

term.

I think when you are spending public dollars, you need to look at

exactly that. You need to look at value for money. You need to look at

where the benefits are going to be felt. You need to ensure that those

benefits are not just felt in the immediate but are felt in the long

term.

The member talks about the escalation of costs. I’m going to leave

aside a long list that I could bring up — I’m not going to go there — of

the previous government’s projects. I think it is important to note…. If

we look at the escalation of costs, many of these projects were budgeted

four and five years before they came forward for their budgets to be

revised. We did see, no question, a hot labour market and a hot economy.

We saw the price of materials go up. That has an impact on budgets.

There’s no question about that.

It’s important to recognize that a large challenge that was being

faced…. It was something we heard over and over again from business,

from people in the construction industry, from people in communities —

the challenges of finding a well-trained workforce.

That’s exactly what we’re investing in — using public dollars to

ensure that we have a well-trained, well-educated workforce. People are

able to find jobs. All British Columbians have a chance to be able to

contribute to the economy. We have less job disputes. There is more

productivity. There are skills that are offered to

individuals.

Those are critical pieces to invest in, to be able to build a

long-term, sustainable economy. You can’t do that if you don’t provide

support for people to be well trained; for people to have good,

family-supporting jobs; for people to be able to find a trade and to get

the full skills and the full ticket they need to be able to continue

that work into the future and to support their family. So, yes, I think

these are very important and wise dollars to be spent when you look at

building a long-term, sustainable economy.

I also want to mention…. The member has used a whole range of

numbers. We’ve been very upfront about the costs of the community

benefits agreements — 4 to 7 percent on projects. Again, when you look

at the supports that provides, long term, for a workforce, I think it’s

a very good investment for the dollars.

I think it’s also important — the member mentioned projects and

costs of projects — to recognize that both Broadway and Pattullo came

in, in fact, exactly on budget with the bids. So for the member to say

that there are problems on all these projects…. In fact, they came in on

budget — what was budgeted for those projects when they were put

out.

[4:35 p.m.]

I think the other piece is that there’s great interest in the

projects that are there. For Chase, we got six bids, for example. People

are interested in bidding on these projects. They’re seeing the benefits

to their local communities. They’re seeing the benefits to them as

employers. So, yes, I do believe there’s great benefit in these

projects.

T. Redies: Good afternoon, Minister and staff. I’m glad to have an

opportunity and appreciate the opportunity to ask a few questions in

what, I guess, is going to be my last finance estimates.

Minister, I’m going to be focusing my questions around B.C.

Investment Management Corp., ICBC, WorkSafe and Hydro, mostly around the

financial assets and the pensions, just to give you a bit of a heads-up

in terms of where I’m going to be focused.

I’ll go to the B.C. Investment Management Corp. Can the minister

provide us with a brief overview of the COVID-19 impact to major

BCI-managed investment funds, including the public service pension plan?

If there have been any negative impacts, what has been done to mitigate

those?

[4:40 p.m.]

Hon. C. James: Welcome to the member. I’m pleased to be able to answer questions

for, as the member said, what may be the last estimates for the member

to take

part in. Congratulations to the member as well.

I’d refer the member, because this is important for others who may

be interested as well…. As we all know, BCI has a very good reputation

and a very strong reputation when it comes to all of their investments

and, in fact, is quite renowned for the good work that they do. I think

that’s continuing despite COVID, which I think speaks volumes to the

work that’s done there.

BCI had a release on July 30 that is up on their website that the

member is welcome to take a look at. They talk about the fact that

they’re announcing an 8.5 annualized rate of return for the ten-year

period for fiscal 2020 — again, very strong information. They’ll have

further information coming out in an annual report which comes out on

August 17, just as a preview for the member to be able to take a look

at.

I think the other piece that is important is that they recognize,

in this release that they put out on July 30, that the annualized return

for the combined pension plan clients is in positive territory at 3

percent, net of all fees, which again, given COVID, given the

challenges, shows the strong, solid performance, despite the impact that

I think every investment is facing because of what’s gone on.

T. Redies: Thank you, Minister, for that answer.

Can the minister give us some insight as to how much, for example,

WorkSafeBC and B.C. Hydro and other public entities that are managed by

BCIMC…? Can she give us some insight as to how much their financial

assets, in particular their equity positions, were impacted prior to

March 31, 2020?

[4:45 p.m.]

Hon. C. James: Just to be clear that it wouldn’t be BCI who would be speaking to

individual clients’ portfolios. They wouldn’t be reporting out on them.

They leave that…. That’s obviously a client piece for them so that’s up

to the individual clients, like ICBC or B.C. Hydro, to put that

information out. So BCI wouldn’t be reporting on individual clients’

portfolios, but obviously, there’s a tie-in to the Ministry of Finance

when it comes to B.C. Hydro and ICBC.

I’m not sure if the member had an opportunity to listen to us

canvassing some of this earlier about the July report and whether the

July report had any indication of some of the challenges that may have

been faced by B.C. Hydro, for example, or ICBC. A little too early yet

because of the volatility that has gone on and also because some of

their information — the first Q report, for example — isn’t coming in

until mid-August for ICBC.

Again, that information will come forward in Q1, so we’ll have an

update in Q1 on those specific Crowns and what the investment portfolios

and any of the impacts that would come forward through the Minister of

Finance and the Q1 report.

T. Redies: Minister, I find it hard to believe that you don’t know or at

least have an idea of what has happened on those portfolios,

particularly as it relates to year-end. I think the world knows that the

stock markets, obviously, showed tremendous volatility and fell

substantially — almost 25 percent, I think, that the Dow was down in

March. Unfortunately, of course, entities like WorkSafeBC and ICBC have

their year-ends as of March 31.

The AG, actually, was quoted in the press, on May 14, 2020, I

believe, in the Times Colonist , saying that ICBC was facing a

$1 billion loss on its investments. The minister also confirmed that the

current financial asset portfolio — about 25 percent is invested in

stocks or about $4 billion.

Now, that would seem to suggest that both WorkSafeBC and ICBC….

Again, timing is everything, but it would appear they could be facing,

both of them, a $1 billion loss as of March 31.

Can the minister confirm that they are looking at significant

losses on their investment portfolio, and if she can’t confirm that, can

she explain why she doesn’t know, as Minister of Finance, what the

potential impact is on her government’s balance sheet?

[4:50 p.m.]

Hon. C. James: Just a couple of pieces. Perhaps it’s timing. I understand the

frustration from the member in making sure she gets the information. It

will be coming.

The member asked about the end of March and what happened at the

end of March, at the end of the fiscal year. That will come out in

Public Accounts, which is coming out shortly. That’ll be on its way

shortly. That will give an accounting for the end of the year for ICBC,

certainly — for ICBC and Hydro. It’ll include their annual reports,

which also will give a good sense of what occurred at the end of the

year. We’ll also have Q1 coming out, which will come out in September.

Q1, again, will give a picture of this fiscal year and the impact going

in.

I think, as the member has pointed out, there’s certainly, no

question, volatility and, no question, some challenges. I think that

will continue. I don’t expect we’re out of those woods yet. But I think

making sure that we have that full information to be able to put the

accurate picture out is critical.

WorkSafe isn’t part of government. They have their own financials.

That’s separate and apart from our responsibility — my responsibility —

when it comes to a direct way. Obviously, it impacts all of us in

British Columbia in a bigger way but a different way for me as Finance

Minister.

The public accounts will report on the past year. That’ll be

coming out shortly and give us the full picture for the end of the year,

which would take into account the impact, certainly in March — probably

February and March, as the member will know. I know she follows these

things closely. Then we will have Q1, which will give us the following

quarter and will give us a better picture — true picture, I think — of

the kind of impact of the investments, because as we know, the market

has gone up and down. I think you’ll see some adjustments that will have

occurred between public accounts in Q1 as well, and that’ll give the

full picture for that.

T. Redies: Thank you, Minister, for that answer. I think we are all aware of

the timing on the public accounts and this and that. I appreciate that

the minister doesn’t want to, I guess, be too forthcoming until those

numbers are out.

But I think, for all intents and purposes, it looks like ICBC,

which already doesn’t have any equity — in fact, I think it’s negative

equity — is facing a fairly substantial impairment charge, at least as

of year-end. Could the minister at least acknowledge whether or not ICBC

is going to be taking an impairment charge? If she can’t tell us the

exact amount, could she just confirm that that is going to be the

case?

[4:55 p.m.]

Hon. C. James: I recognize the member wants the information now, but again, the

public accounts will be coming out shortly. Q1 will be coming out

shortly. That will give a better picture of where we’re at, what

happened at the end of the fiscal year and what happened as we

transitioned into this fiscal year. I think it’s important to see that

whole picture.

T. Redies: All right. I guess we’ll have to wait for the public accounts, but

I don’t think any of us will be too surprised to see a substantial

impairment charge. Albeit, the Q1 numbers may look better.

Perhaps we can talk a little bit about the actual overall

investment practices of some of the Crowns. Has the minister read, for

example, the investment policies of ICBC and entities like WorkSafe? The

Attorney General confirmed that about 23 percent of ICBC’s financial

assets are invested in equities. Does she feel, for public Crown

corporations, which do have a significant impact financially on the

province’s balance sheet and financial position, that it is appropriate

and advisable for them to be investing that heavily in

equities?

[5:00 p.m.]

Hon. C. James: I think the first piece that’s important to note — the member will

know this, I’m sure — is that ICBC’s portfolio has now gone to BCI and

that they are now investing on behalf of ICBC. Certainly from my

perspective, from the minister’s perspective at ICBC and from

government’s perspective, that’s a very smart and strategic

direction.

Obviously, BCI takes a long-term perspective. When I talked about

the numbers — from the release that BCI has on their website — at the

end of July, it speaks to that long-term view. That speaks not simply to

the short-term, more risky approach or to short-term volatility, but in

fact looks at a long-term view. I think that’s important not only for

BCI and the pension clients but for Crown corporations within government

as well.

I certainly feel very positive about the direction, and I think

BCI’s expertise and the advice that they give to their clients, their

defensive approach, their approach around investing for the long term,

will benefit all British Columbians.

T. Redies: Thank you, Minister, for that answer. I also agree with you. I

think moving the portfolio, the financial assets of ICBC to BCIMC, makes

sense.

Having said that, what I asked was whether or not the minister

thinks that, in the case of ICBC, having 25 percent of a portfolio that

is upwards of $20 billion invested in equities is a good thing from the

perspective of the Minister of Finance, who has to reflect these losses,

due to volatility, back into the government’s financials.

Again, this is the challenge when you’re dealing with large

numbers. If you have 25 percent of $20 billion, it’s $4 billion. If

there’s a 25 percent drop in markets, which occurs from time to time,

that’s a $1 billion loss. Were the minister and the ministry aware of

these potential risks? Had they included them in their risk modelling?

Again, these downturns in the markets are not like pandemics, which only

happen once in a while. They do happen more frequently.

I guess I’d like to understand what the ministry has been doing up

until this point in terms of understanding that risk, modelling it and

managing for it.

[5:05 p.m.]

Hon. C. James: I think the key in all of this is the work and the performance of

BCI when it comes to managing portfolios, whether it’s pension

portfolios or other client portfolios. I am very confident in the

direction that is being taken by BCI. I’m confident that BCI is alive to

the risk and recognizes the importance of keeping a reasonable standard

in place when it comes to the mix of the portfolio. It looks at

diversification, and I think that’s important.

I think we have to remember, again, that they’re taking a

long-term view. I think they have looked at a reasonable standard. Their

performance, as I mentioned at the very beginning of our conversation,

has been validated, no question, when you look at comparing them to

their peers. So I am very comfortable, as I said. I believe that it was

the right direction for ICBC. They are making sure that they’re looking

at the long term, and BCI has shown that in the work that they’ve

done.

Does that mean that ICBC itself and the challenges that it has

faced aren’t a risk, at all, to our financial plan? No, I think the

member will know from the July economic statement that I put out — and,

certainly, our previous budget — that ICBC continues to be on the risk

list because of the challenges that it has had, because of the

losses.

That’s part of the reason that the Attorney General has taken such

a focus and is looking at shifting the entire organization to make sure

it gets back on track. So ICBC continues to be a risk, no question, but

I am very comfortable and confident with the work that BCI does and the

work that they will do in making sure that they’re looking at the

long-term view in protecting those resources and those

investments.

T. Redies: Thank you, Minister, for that answer. I’m not disputing your

comments with respect to BCIMC. I guess what I still haven’t heard an

answer to is whether or not the Ministry of Finance was appropriately

modelling the risk of some of these large financial portfolios of the

Crowns with respect to volatility in the marketplace.

[5:10 p.m.]

I mean, had they anticipated…? Did the Ministry of Finance

anticipate that there could be a 25 percent reduction in the value of

the equities held by ICBC that could result in a $1 billion

loss?

I’m trying to understand the extent of risk modelling and

management at the Ministry of Finance level. If you have these big pools

of financial assets and you do get volatility, then…. I would like some

comfort that somebody in the Ministry of Finance was keeping an eye on

this and had recognized the potential risks.

Hon. C. James: No question that modelling, risk management is a large part of the

ministry, as the member will know from other estimates that we’ve gone

through. We take that very seriously, and we obviously did modelling,

took a look at the risk, particularly with ICBC, because of the

challenges that have been happening. We were doing very close

monitoring.

That also happens with BCI. So BCI, also, for their clients, of

course, does risk modelling as well and will be doing risk management as

well. Certainly, from their perspective…. As I said, I trust the work

that they do and the work that they would’ve been doing in

this.

[5:15 p.m.]

Then, again, the specifics will come out when we get to public

accounts and when we get to Q1 around what the actual results were. I

think that will help with the information the member is looking for as

well.

T. Redies: Thank you, Minister.

Minister, a couple of years ago when ICBC…. I’m just doing this

off of memory now, so I apologize if I get a few of the numbers

incorrect. When ICBC announced its first, I believe, $1.3 billion loss,

the loss was predicated on a re-evaluation of about 700-odd claims that

had been revised upwards in terms of cost to ICBC from about $34,000 to,

I believe, $400,000.

Is ICBC re-evaluating any of those claims in light of, maybe,

reduced crashes or anything else that might be reflected on the March

31, 2020, financials?

Hon. C. James: There’s an annual review at the end of every fiscal, regardless.

Not just related to COVID, not just related to shifts that have

happened, but sit down with the actuaries, sit down with the auditors

and go through that re-evaluation or an evaluation of claims. That

occurs at the end of every year, and that information will come out,

obviously, in their annual report and in their information when we get

to end of year as well.

T. Redies: Whilst I may not be here, I would think that my Finance critic

colleagues, the MLA for Surrey South and the MLA for Prince

George–Valemount, will want to get a brief on just exactly what is

happening with those claims, because we know, as we’ve seen in the past,

that a re-evaluation downwards can have a significant impact on the

profitability of ICBC, and, likewise, an actuarial revision upwards

could also have a significant impact. So I would hope that the minister

will enable her staff and the ICBC staff to take the Finance critics

through that, because I think it’s a very important piece of

transparency that’s needed.

I’m going to just move on, in the interests of time. In terms of

ICBC, is ICBC still paying insurance premium taxes to the government?

Have these revenues changed at all due to the COVID-19 pandemic, and if

so, by what magnitude?

[5:20 p.m.]

Hon. C. James: We had a little bit of a discussion around insurance premium tax

in the discussion around strata, so those numbers that I provided to

another member were — this is budget estimates — $660 million for

’20-21, $670 million for ’21-22 and $680 million for ’22-23. We don’t

break that out. We don’t break out insurance premium tax, so that would

include…. Yes, car insurance, property insurance, commercial insurance,

etc., will be included in there. And yes, ICBC continues to pay that

tax.

T. Redies: Just following on to that, last year following a court loss

related to expert evidence rules it was stated that there was going to

be a $400 million impact to ICBC’s bottom line. But I don’t believe it’s

been reflected yet in the fiscal update that the minister provided in

July.

I guess what I’m trying to understand…. Is that $400 million going

to be reflected in the 2020 results or in 2021? If the minister could

just describe how that is being handled. Or is it not going to be

reflected at all because of the Evidence Act going through?

Hon. C. James: The member mentioned the July statement. She may not have been

connected to the earlier part of our estimates, but we talked a little

bit about both B.C. Hydro and ICBC. Neither of those Crown corporations

were included in the July update, so we didn’t include them. Again,

there’s a lot of volatility, still, during that time period when we were

looking at putting the scenario together for July. So that information

and the information that the member asked for will all be included as

part of public accounts when that comes out for ’19-20.

T. Redies: Well, maybe I just should be a little bit more specific. The $400

million hit to ICBC as a result of losing the court case last year, is

it going to be reflected in 2020 numbers or 2021? You know, I’m just

asking. You don’t have to give me, I guess, the specific

details.

[5:25 p.m.]

One would have thought that because the Evidence Act did not get

passed until after the year-end, it would still have to be reflected in

the 2020 financials. Can the minister at least provide that

clarification?

Hon. C. James: I would just refer the member to public accounts in the ’19-20

year for that information. That’ll be included in that information, in

’19-20 year.

T. Redies: All right. Thank you, Minister. I guess I’m not going to get an

exact answer there. All roads lead to public accounts and the Q1s, I

guess. We’ll be anxiously looking at those to see if some of our

concerns are actually being manifested, which I suspect they are going

to be.

Going back to ICBC, one question I didn’t get a chance to ask the

minister with respect to BCIMC was when exactly the switch of ICBC’s

investments over to BCIMC actually occurred. What cost savings were

realized as a result of that? Can the minister let us know whether or

not that’s going to be reflected in the 2020 results or the 2021

results?

Hon. C. James: The transition of the funds happened in the summer and fall of

2019. That was when the funds were transitioned over. The reason around

the transition wasn’t done as a cost-cutting exercise. It was done for a

couple of reasons. One, certainly, is the expertise that BCI has — the

opportunities that it brought, the new products, the experience

there.

[5:30 p.m.]

ICBC’s portfolio was large enough that they would have also had to

look at some additional supports when it came to things like IT and

other things. So I guess, in that respect, it would have been cost

savings in that if ICBC had taken on those additional costs, it would

have cost the investment. The decision was made to move to BCI to be

able to actually address the large size of the portfolio and get the new

expertise that they knew was available and the expertise that was

available through the corporation as well.

T. Redies: My final question is basically, again, back to the volatility of

the markets and whether or not there are any unfunded pension

liabilities as of March 31, 2020, on any of the Crowns that might have

to be reflected in the government’s financial statements.

[R. Chouhan in the chair.]

Hon. C. James: No. We don’t have any changes to the pension plans, either

government or the Crowns. Certainly, as we’ve talked about the

importance of looking at the long term and not looking at volatility,

we’re very comfortable, and there aren’t any changes.

T. Redies: I just wanted to, if I may, take a couple of moments just to thank

the minister for our various exchanges over the last few years. We don’t

always agree on policy, but I have a lot of respect for the minister. I

want to wish her all the best in the coming months and years. Thank

you.

I think the MLA for Cowichan Valley will be asking questions from

here.

Hon. C. James: I’ll just add my appreciation as well. When the member announced

she was moving on, I talked about the good debate and good discussion

and good disagreements we’ve had across the table with all my critics,

including the member.

I certainly want to wish her well, both in her health and in her

future career as well, and thank her for her service to her community

and her service to the province.

S. Furstenau: Just while she’s still there, the member for Surrey–White Rock…. I

really appreciate what she has brought to the Legislature. Sad to see

her go. Science World is very lucky that they’re going to be getting

her. It’s been a pleasure to work across the aisle from her. Also just a

really great example of an MLA putting everything into the work that

she’s brought here. I just wanted to acknowledge her and her good

work.

Also the minister. I know we’re getting to the end of yet another

long day for the Minister of Finance, and she is doing a remarkable job

of taking on this huge task again. I want to also express my

appreciation for her.

When I went out for lunch today, one of the workers who is fasting

outside of the Legislature — her name is Nadia — stopped and asked if I

was aware of the issue that they were bringing up by fasting in front of

the Legislature. She asked if I would put a question to the minister,

which I think is a really excellent question.

It was: will there be conditions on any funding that goes to the

tourism sector, particularly to hotels, that companies that receive any

supportive funding, government funding, from the province will be

required to hire back the workers who have been laid off rather than

moving to new workers at a lower rate? I’m wondering if the minister

could help answer that question for Nadia.

[5:35 p.m.]

Hon. C. James: I’ll talk a little bit just about the economic recovery plan,

because I know the specifics. I certainly had a chance to chat with some

of the members who are here at the Legislature as well, to talk about

their issues. I know the Minister of Labour is having discussions with

the individuals as well, so I’ll leave that conversation…. I believe the

Minister of Tourism and the Minister of Labour were meeting with the

individuals.

On the economic recovery plan. I think it does speak to the

importance of the work that we’re doing on the economic recovery plan.

There is a focus with that plan, and a focus around the ideas that have

come forward, to make sure that we are looking specifically at getting

jobs back — both new jobs as well as existing jobs. How do we support

industry to be able to do that?

We are also very specifically looking at the hardest-hit sectors,

and there is no question that hospitality and tourism are some of the

hardest-hit sectors. We’re also looking, of course, at the demographics

that have happened. COVID is not an equal opportunity pandemic. We know

that youth have been harder hit. We know that women have been harder

hit. Again, we are looking through our recovery plan at those specifics.

Again, I know the member will know this — that the Minister of Labour

and Minister of Tourism are talking to the folks at the

Legislature.

I want to reassure the individual who asked the question, as well

as the member, that we are very specifically looking at how we make sure

that people have those jobs, how we make sure that there are

opportunities for jobs for those individuals in the hardest-hit sector,

which would, obviously, be in the hospitality sector as well.

S. Furstenau: Thank you to the minister for that response.

I do want to dig a bit more deeply into the COVID recovery

planning and funds. As the minister has already indicated, and rightly

so, the pandemic and its economic impacts have not been equal but indeed

highlighted inequalities that already exist and, in many ways, is

exacerbating these inequalities.

In terms of how the minister has approached the COVID recovery

and, from our point of view, how important it is that it is a green

recovery — that it is recognizing that we also need to be transitioning

our economy with some urgency — can the minister give some insight into

a little bit more about who gets funding in the green economy as part of

the COVID recovery? Which stakeholders have been prioritized in

consultations? And how is revenue being tracked and monitored on an

ongoing basis as part of the recovery program?

[5:40 p.m.]

Hon. C. James: I want to take us a step back. I think it’s important to look at

the economic recovery plan and the process that we’re utilizing to be

able to put this together. I’m very proud of it. It’s very focused on

British Columbians and the values of British Columbians and those things

that matter to the people of this province.

As I mentioned earlier, and the member mentioned as well, the

pandemic has really highlighted a number of gaps in our communities, in

our province, in our economy — and exacerbated those gaps in many ways.

This is an opportunity for us, as we look at economic recovery, to look

at how we can make sure that we’re building on the values that matter to

British Columbians.

First off, as the Premier and I announced when we talked about the

opportunity for British Columbians to engage, we opened this process to

everyone. There was no prioritizing of stakeholders. We prioritized the

proposals that came forward, based on the values, but no prioritizing of

stakeholders. Everyone had an opportunity.

I have to say we had an extraordinary number of proposals come in

from the groups one would imagine — community organizations,

environmental groups, business groups, etc. But we also had individuals

who wrote in with their ideas and their approaches and were pleased to

take part.

We had a survey going where people filled in their ideas. They had

an opportunity to submit. But we also did a number of town halls, and we

did a number of individual-focused approaches and discussions as well

with the tech industry, with innovation, with environment groups, again

with business groups, with under-40s, with youth. So this was a very

broad consultation process to engage people.

We began with the three priorities that we have as government,

again looking at how we address affordability for people in our

province, how we make sure that we provide good-quality services and

supports that people need, and how we ensure that we have a sustainable

economy in British Columbia. From that, we drew on the values that

matter to the people of this province.

As proposals came forward, we looked at prioritizing them based on

the values that matter to the people of this province. Those values

include equity and inclusion, reconciliation with Indigenous people, a

clean B.C., good jobs, innovation, a sustainable economy.

Then I think the other important piece in here is that the

proposals also had to be responsive. They had to make sure that we can

address some of the pressures that people are facing now — not simply

into the future, but also: how are we going to address the people that

are struggling now? How we are going to make sure we provide those

supports?

So that’s the process that we’ve been going through at this stage.

As I said, I’m really proud of the engagement that British Columbians

took in this process. I think that some very good ideas, certainly, came

forward.

S. Furstenau: I think that the minister should be proud. It’s been a lot of work

in a short amount of time. I do appreciate the effort to put addressing

inequality and the people who are hit hardest by the pandemic at the

centre of her work. That’s very important, and it’s much

appreciated.

I would like to know from the minister how much CleanBC is driving

the economic plan and the recovery spending from the Ministry of

Finance, as well as looking at DRIPA. So the two big pieces that came

in, in 2019 that are sort of visionary — how have they informed the

recovery plan?

[5:45 p.m.]

Hon. C. James: I’m glad that the member asked about the spending on CleanBC. It

gives me a chance to remind people, as well, that the $1.5 billion for

the economic recovery plan…. As I’ve said all along, everything we do is

about economic recovery, particularly in this pandemic. Everything we’ve

done from the day that we started addressing the issue of COVID has been

about economic recovery, because economic recovery, of course, has to

include health and safety as the primary piece. If we don’t address

that, we don’t have the opportunity to look at rebuilding our

economy.

The $1.5 billion is, yes, an amount that we designated as we go

into the fall, but all of the dollars we’ve spent until now — in fact,

all of the dollars that we’re investing through our budget and through

the decisions we’ve made as a government — help with economic recovery

as well.

The example of CleanBC — $1.3 billion over four years is the

existing investment in CleanBC. That, again, helps build a recovery that

is sustainable, that will address our responsibilities when it comes to

climate action. I think it’s important to recognize.

The other one I often talk about is our investments that we’ve

made in education in our budgets, the investments that we’ve made in

providing support for former youth in care, looking at getting rid of

interest on student loans and then providing an access grant for this

fall for students. Those are pieces that we made as investments to be

able to build a strong, sustainable economy and will help with economic

recovery and are wise investments as we look at how we address the

economic recovery post-COVID as well.

When it comes to the ideas that are coming forward and the

proposals that are coming forward, again, we certainly have looked at —

as I mentioned earlier — climate change and the environment, equity and

inclusion and reconciliation as key pieces that are critical. So as

proposals come forward, we look at how they align, how they recognize

and do our part towards addressing climate change and the environment,

but also how they align and how they could help us to expand the

opportunities that we’ve already invested in CleanBC.

Making sure that we’re being wise in our investments and expanding

the opportunities…. Equity and inclusion, similarly, on reconciliation —

again, an opportunity to be able to move ahead. Such a critical piece

for a sustainable economic growth in our province is to address

reconciliation with Indigenous peoples. Again, that’s on the criteria

that’s there for proposals that come forward.

S. Furstenau: Can the minister let us know if the ministry’s investment

portfolio has changed as a result of COVID-19, and if so, how? For

example, is the minister prioritizing green investments as part of the

recovery?

[5:50 p.m.]

Hon. C. James: Perhaps the member can add if this doesn’t hit the mark. I’m

presuming the member is talking about our investment portfolio in

government, the investments we’re making, rather than the investments in

programs, because we’ve talked a little bit about that. But if the

member is talking about programs, we can go back to that as

well.

Certainly, we are doing a number of pieces. We’re looking at, and

we have been working on, developing a green bond for British Columbia.

We have a good strong reputation across the world. So the opportunity

for us to be able to develop a green bond is critical. We have been

taking our time in doing this because, again, we want to make sure that

it is well credentialed, that it is seen globally as an accurate green

bond. So we’re working through CICERO from Norway, who does ratings and

gives us ratings. We’ve developed…. We’ll work with them around that

piece.

The member will probably know we’re actively using and raising our

profile around ESG — environmental, social and governance — factors in

our province. We again, as part of the work we’ve been doing…. I’ll

recognize the work we do with the Green caucus, as well, through our

CASA agreement. It really is an integrated approach in looking at

investments, in looking at our priorities as government. So utilizing

more and more…. We see companies utilizing those kinds of

portfolios.

I know we’ve had conversations, the member and I, about how we

expand our GBA+ ratings in our budget and how we look at a further

expansion of that in other areas — how we start taking into account our

social and environmental pieces as well.

[5:55 p.m.]

That’s certainly a piece that we’re continuing to look at how we

expand as a government, because I think B.C. has a good story to tell,

and I think we’ve got an opportunity to do that. Whether it’s CleanBC,

whether it’s our recovery plan, whether it’s our focus on a sustainable

approach across the board, on social investments, environmental

investments and economic investments, I think British Columbia is in a

good position to be able to utilize those pieces.

S. Furstenau: That was what I was looking for. Thank you very much for that

answer. I’m just going to ask one last question, and then I’ll be

handing over to my colleague, the interim leader and MLA for Saanich

North and the Islands.

I’m following up on a question that he raised today in question

period about Site C, which is becoming, it seems, more and more of a

cost burden for ratepayers of the future in British Columbia, already in

the red as of December 2019 due to geotechnical instability and contract

disputes. The report that came out recently really highlights that it

goes beyond