2015 Legislative Session: Fourth Session, 40th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Wednesday, October 7, 2015

Afternoon Sitting

Volume 29, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Routine Business

Introductions by Members

Ministerial Statements

Softwood lumber agreement

Hon. C. Clark

J. Horgan

Statements

(Standing Order 25B)

Beadifferent operations in Hope

L. Throness

Fish stocks and tourism at Kootenay Lake

M. Mungall

Port Moody Public Library

L. Reimer

Ted Pickell and Stewart World Port

D. Donaldson

Manufacturing industry

G. Kyllo

B. Ralston

Oral Questions

Youth death case and government support for youth in care and aging out of care

J. Horgan

Hon. C. Clark

K. Corrigan

Hon. S. Cadieux

C. James

Review of youth in care death case

D. Donaldson

Hon. S. Cadieux

Review of child placement case

R. Austin

Hon. S. Cadieux

Youth death case and government support for youth in care and aging out of care

R. Austin

Hon. S. Cadieux

Children and Youth Committee meeting cancellations

M. Farnworth

Hon. M. de Jong

Deaths of mother and son in Prince Rupert and inquest recommendations on transit services

M. Karagianis

Hon. S. Cadieux

Petitions

S. Fraser

Orders of the Day

Committee of the Whole House

Bill 36 — Auditor General for Local Government Amendment Act, 2015 (continued)

S. Robinson

Hon. P. Fassbender

V. Huntington

Report and

Third Reading of Bills

Bill 36 — Auditor General for Local Government Amendment Act, 2015

Second Reading of Bills

Bill 38 — Franchises Act

Hon. C. Oakes

J. Shin

J. Martin

C. James

J. Tegart

A. Dix

L. Reimer

B. Ralston

J. Thornthwaite

H. Bains

D. Bing

S. Robinson

S. Simpson

Hon. S. Anton

D. Barnett

Hon. C. Oakes

[ Page 9479 ]

WEDNESDAY, OCTOBER 7, 2015

The House met at 1:33 p.m.

[Madame Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

Hon. N. Letnick: It gives me great pleasure to introduce Jim and Clara Daley. I was in the hallway upstairs a few minutes ago, and they said: “You’re Norm Letnick.” I said, “Yes,” and they said: “We’re constituents of yours.” So would the House please make them welcome.

Joining us in the members’ gallery this afternoon is the Ambassador of Sweden to Canada, His Excellency Sjögren. He is accompanied by the honorary consul of Sweden at Vancouver, Mr. Gradin, and by Mr. Forslund, trade and business promotion, from the Embassy of Sweden in Ottawa. I’ll be meeting with the ambassador this afternoon to discuss bilateral relations between British Columbia and Sweden.

Would the House please extend a warm welcome to the ambassador, the honorary consul and Mr. Forslund.

J. Horgan: It is appropriate that I follow the Minister of Agriculture, seeing that Sweden’s greatest exports to British Columbia are named Henrik and Daniel. I want to thank them very much for that.

[1335]

It leads nicely into my introduction. Not joining us here in the gallery today is Adam Cracknell. Adam Cracknell was born in Prince Albert, Saskatchewan. He moved to Juan de Fuca as a teenager. He attended Belmont High School. He played minor hockey in Juan de Fuca, he played Junior B in Saanich, and he was a superstar in Cranbrook with the Kootenay Ice.

Adam was drafted by the Calgary Flames. He played briefly for the St. Louis Blues, the L.A. Kings and, most recently, the Columbus Blue Jackets.

Members will remember the enthusiasm we all had for Kraft Hockeyville here in British Columbia when the member for Saanich North was able to secure funding through all of the good efforts of all members of the House in a bipartisan way to bring Kraft Hockeyville to southern Vancouver Island. The game was played in Colwood. Who scored the winning goal in overtime? Well, it was Adam Cracknell, who was in Victoria and in Vancouver on a tryout contract.

His story is about perseverance and living hard to realize a dream. Tonight — not in the Legislature today, but tonight — Adam Cracknell will be in the dressing room with Daniel and Henrik as the starting fourth line centre for the Vancouver Canucks.

Hard work, perseverance, living the dream. Will we all give great thanks and congratulations to Adam Cracknell for a life well lived.

G. Kyllo: Joining us in the House today we have the Canadian Manufacturers and Exporters Association. We have Marcus Ewart-Johns, who is the vice-president of CME. Also joining him we have Jayson Myers, the president of CME, who’s visiting us today from Toronto.

We also have joining us Marilynn Knoch — she’s executive director of the B.C. PIA — and Betty Lou Pacey, the president of BL Innovative Lighting. We also have Dan Reader, who’s the president of Murray Latta Progressive; Stephan Peel, the vice-president of operations for Ironside Design Manufacturing; and Darryl Anderson, a regional representative for CME.

M. Farnworth: I’d like to take this opportunity to acknowledge that it is the birthday of one of the members of our House, and that is the Government House Leader. House, join me in wishing him happy birthday.

Hon. S. Bond: I’m very pleased to welcome a group of visitors to the gallery today. We have members of the Coalition of B.C. Businesses that are here this afternoon, all of them job creators across the province. We’re very much looking forward to our discussions this afternoon.

We have representatives from the Building Supply Industry Association, the New Car Dealers, the Canadian Home Builders, the Hotel Association — a very long list.

I do want to single out one of them, though, and just welcome in a special way the brand-new president of the B.C. Chamber of Commerce, Jon Garson.

I know the House will want to make all of our special guests welcome this afternoon.

B. Routley: Today, we will have a total of three groups visiting us from the Shawnigan Lake School. Their teacher, Paul Klassen, will be here, along with some help from the parents of these students. They’ll be here at different times during this afternoon.

Please join me in welcoming all of these students to this legislative precinct.

Hon. B. Bennett: I’d like to just recognize three individuals who are with the business coalition. Neil Moody is the CEO of the Home Builders Association of B.C. The president of the Home Builders Association of B.C. is one Simon Howse, who happens to be from Fernie. He emigrated from Australia, he came to Fernie to ski, and he never left. That was about ten years ago.

Welcome, Simon.

I’d also like to welcome an old friend of mine and of many other people in this House — at least on this side of the House — Muneesh Sharma, who worked here for

[ Page 9480 ]

many years and was an outstanding executive assistant to me when I first started in cabinet and to many other ministers as well.

Please help me welcome these three gentlemen.

J. Horgan: It’s rare that you get an addendum to an introduction. But joining us in the gallery, because he works here with security, is Adam’s father. I was unaware of this. Peter Cracknell is here today, and I know he’s the proudest father in the place, among a bunch of proud fathers.

Would the House thank Peter for having a great son named Adam and make him very, very welcome.

[1340]

S. Hammell: I’d like to welcome to the House Deborah Conner. Deborah is the executive director of the B.C. Schizophrenia Society. I’m sure she’s here to meet both sides of the House. Would the House make her welcome this afternoon.

Ministerial Statements

SOFTWOOD LUMBER AGREEMENT

Hon. C. Clark: I rise to make a statement because this Monday the Canada-U.S. softwood lumber agreement will expire. The agreement that we have at the moment ended five years of litigation between Canada and the U.S. The result of that was returning $2.4 billion in duties to B.C. softwood lumber producers. It provided certainty for the industry. It provided certainty for the 80 communities that rely on that industry and to the thousands of families who depend on that industry to put food on the table for their families.

I want to inform the House that as soon as this federal election is over, whatever the outcome, I will be speaking to the Prime Minister. In my discussion with him, I’m going to ensure that the federal government understands the importance of free and fair access to the U.S. market and what that means for British Columbia but also, in a country where so much of the national economy depends on what happens here in British Columbia, the importance of this agreement for every single Canadian.

I’m going to make sure that our Prime Minister makes the softwood lumber agreement and its renegotiation a priority.

We, in this province, are one of the world’s largest softwood lumber exporters. We have worked very hard to diversify our markets over the years, as well as our economy. Since 2006, softwood lumber exports to China have grown from just 1 percent to 25 percent today. That’s a remarkable change and something that’s been good for communities across the province. We’re going continue our work to expand Asian markets, but the United States will always remain a crucial market for us — our closest neighbours, our closest friends, anywhere in the world.

None of us in this province can forget that forestry built our province. We also know that we cannot take its continued success for granted. We have to work hard to ensure that forestry will endure as a key pillar of jobs and growth in B.C., to ensure that the 80 communities that depend on it continue to thrive.

In order to do this, we all need to very determinedly and purposefully work together — members of this House and, of course, members of the Houses of Parliament in our nation’s capital in Ottawa.

J. Horgan: I welcome the Premier’s commitment to ensuring that her full attention and the full attention of her government will be focused after the federal election — in fact, since the expiration of the softwood lumber agreement this week — on ensuring that we do renew that agreement in the interest of workers here and in the interest of our industry.

It’s critical to know that everyone in this House benefits, whether it’s the communities that the minister articulated…. I made my way through university working in the forest sector. Sadly, since 2002 there are 206 fewer mills in British Columbia and about 25,000 fewer employees. That doesn’t diminish the importance of us all working together to protect what remains and, in fact, grow the industry now and into the future.

My colleague from Surrey-Whalley has been tasked with monitoring the file on behalf of the official opposition. I know he has a very cooperative and working relationship with the Minister of International Trade.

I’m looking very much forward to sharing information and ideas about how we can work together in unison for all British Columbians to make sure we protect this critical and vital industry — not only to our past, I would argue, and I think the Premier agrees, but to our future.

But there is, of course, lots to do here at home that doesn’t involve international negotiations and that we can work on together as well to assist the industry today — trying to reduce the amount of raw log exports, for example, and a range of other issues that are in the hands of the government. I look forward to working with them on those as well.

It’s critical that we stick together on these trade agreements. It’s also critical that we work together to make sure we have a vibrant forest sector now and into the future.

[1345]

Statements

(Standing Order 25B)

BEADIFFERENT OPERATIONS IN HOPE

L. Throness: In honour of Small Business Month, I want to highlight a particularly interesting business in my riding. There are many enterprises, both large and small,

[ Page 9481 ]

that are like hidden gems in my communities. None could be more like that than a store in Hope called Beadifferent, which is a business name with a pun. Randy Swope began his business creating unique beadwork in 2004. His store offers pretty well anything that a creative person would ever want to make their own affordable jewelry.

But Randy does more than that. He creates his own jewelry out of molten glass in a workshop that he operates on site. I watched him demonstrate his craft, and the results are really beautiful. But Randy does more than that. He is also a woodcarver, already something of a tradition in Hope. You’ll find half a dozen of his carvings around town, two of the sasquatch in Harrison Hot Springs, as well as carvings in 18 other countries. I would invite members to go to his website and look, for example, at his carving of bear cubs, attached high up on a real tree. You would swear that the cubs are real too.

It’s not easy to make your living through art, but over a decade of hard work, ingenuity and natural talent, Randy has literally carved out a living for himself and his family. He’s a great example of an entrepreneur who, like the other 383,000 small business owners in our province, go about doing what they love to do, asking nothing from government but to get out of their way.

People like Randy Swope create a million jobs and make our province an even more unique and interesting place to visit. So next time you’re driving through Hope, why not stop at the bright purple storefront on 3rd Avenue, across from the municipal hall, and visit Beadifferent? You might come out with a new hobby and a whole new look.

FISH STOCKS AND TOURISM

AT KOOTENAY LAKE

M. Mungall: Well, Kootenay Lake is truly spectacular, and I can’t imagine a better place to be in the summertime — or the spring or the fall or the winter, for that matter. I’m not alone in this. Every year people flock to the lake to enjoy all that it has to offer on the shores, on the water, as well as what’s in the lake — fish.

Kootenay Lake is world-renowned for its amazing fish — the beautiful, red kokanee salmon, the ancient sturgeons and the incredible Gerrard rainbow trout. As Kerry Reed puts it on his website for Reel Adventures: “If you’re interested in catching a big fish, take a trip with Kerry and Reel Adventures in British Columbia for a chance to catch the biggest trout in the world.”

That’s exactly what superstars Justin Timberlake and Jessica Biel did in 2010. They were among the many who brought a total of 4 million angler dollars to Kootenay Lake that year. However, five years later, things aren’t looking so good for fishing in Kootenay Lake. Fish populations are plummeting, down to less than 10,000 kokanee spawners from one million, ten years ago. The bigger fish, which need the kokanee for food, are also declining.

As the B.C. Wildlife Federation put it, the Gerrard trout are eating themselves out of house and home. With fewer fish and smaller fish, derbies are being cancelled and businesses are losing customers. For Kerry Reed, he has lost 50 percent of his business.

People around the world want to know what’s going on and what’s going to be done to rebuild the Kootenay Lake fishery. Government has taken some action, but the B.C. Wildlife Federation says that more needs to be done and more can be done.

In moving forward, there is much to learn about how this collapse occurred and much to do to rebuild. In true Kootenay spirit, locals know that by working together, we can save Kootenay Lake fish and the international tourism it brings.

PORT MOODY PUBLIC LIBRARY

L. Reimer: October is Library Month in British Columbia. It is an opportunity to recognize the value of public libraries and the vital role they play in promoting literacy in every community across the province. I had the pleasure, during my years as a city councillor in Coquitlam, to sit on the library board while the new Coquitlam town centre branch was being built. No one would have guessed how incredibly well used it is and has been ever since it opened.

While some libraries are fixtures in the community, some are mobile, such as the mobile book bus in Coquitlam, now called Library Link. Libraries are partners in lifelong learning and help British Columbians of all ages access the information they need to live, learn, work and connect with people.

[1350]

In my own constituency of Port Moody–Coquitlam, the 15th annual Links to Literacy Golf Tournament was held in August at Westwood Plateau Golf and Country Club in support of the Port Moody Library. This year’s tournament raised over $35,000 to support our library’s literacy initiatives. The proceeds from this year’s tournament will be directed towards a new learning lounge in the library, which will benefit people of all ages.

Like all libraries across British Columbia, the Port Moody Library supports and encourages student learning through diverse collections, services and on-line resources. Libraries help people develop the skills required to find and evaluate information in order to adapt and succeed in what is becoming an increasingly knowledge-based economy.

My congratulations, therefore, go to all of the 2015 Links to Literacy sponsors and all the volunteers who made this year’s tournament a huge success.

TED PICKELL AND STEWART WORLD PORT

D. Donaldson: How do you get a couple of hundred people to stand on a long dock jutting out into the

[ Page 9482 ]

Portland Canal on a cool and wet northern September day and enjoy it? Well, it wasn’t a fishing tournament, and it wasn’t Crab Fest. How you do it is by offering a glimmer of a brighter future. More than a glimmer, actually, because on September 16, I joined a couple of hundred others in Stewart for the official opening of the Stewart World Port.

Ted Pickell, from northeastern B.C., invested $70 million to complete phase 1 of the port, with no provincial or federal dollars directly contributed. The Stewart World Port fills a gap: the break-bulk, roll-on, roll-off imported cargo side, where the northwest is only currently serviced by a port in Washington state.

I first toured the site with Ted Pickell and Stewart mayor Galina Durant about three years ago. At that time, my thoughts were about how important the project was on a north-south basis within Stikine for mining and other industrial projects in the northwest. That’s because there was, and still is, a concern about potential leakage of this business through the Alaskan port of Wrangell, through a potential road called the Bradfield connector west of Iskut and a possible B.C. Hydro inter-tie with the Alaska system.

The Stewart World Port will go a long way to prevent that leakage, but what is really interesting are the west-east possibilities. Already, ships will be coming, starting in January, carrying global giant Air Liquide cargo bound for Alberta. One heavy-haul operator at the official opening told me how he hoped to import 180-foot blades for a wind energy project in northeast B.C. through the port and along Highway 16.

The reality is concrete, and the potential is great. I thanked Ted Pickell that day for his belief and vision. It’s the type of local investment we need in northwest B.C. It is also a testimony to the determination and resilience of the people of Stewart, who remain rooted to place through the ups and downs of the global resource economy. Their future, indeed, looks brighter.

MANUFACTURING INDUSTRY

G. Kyllo: For the second consecutive year, the government is supporting manufacturing by proclaiming October 11 to 17 as Manufacturing Week in B.C. Manufacturing has enormous economic and social impacts in British Columbia. In fact, most jobs, directly or indirectly, depend on manufacturing.

Through the B.C. jobs plan, our government encourages young people to enter the field and access the training required to pursue rewarding careers in the industry. Manufacturing Week draws attention to these innovative, family-supporting jobs and showcases how manufacturing contributes to our province’s diverse, strong and growing economy.

To give you a measure of the impact of manufacturing in B.C., $14.3 billion is the dollar amount that manufacturing contributes to the B.C. economy every year. There are also 12,000 manufacturing companies in British Columbia, and in 2014, we had 161,000 people employed in the manufacturing sector. It’s also worth noting that the average manufacturing wage is 12 percent higher than the provincial average.

The goal of Manufacturing Week is to raise the profile of the sector and to find ways to reduce barriers to job growth in the manufacturing sector. Our government is building stronger partnerships with industry and labour in key sectors, such as the aerospace manufacturing industry, to deliver training and apprenticeships to keep up with the demand for skilled workers.

In B.C., we make just about everything, thanks to our vast forests, rich mineral deposits, a highly educated workforce and a provincewide focus on research and innovation. By proclaiming Manufacturing Week, we demonstrate our commitment to work with manufacturing companies to help build success and create new opportunities for growth.

B. Ralston: October is Manufacturing Month in British Columbia. It’s not just a week; it’s a month. Manufacturing is a significant part of the British Columbia economy, yet it’s sometimes overlooked and underappreciated by the public and by policy-makers. Non-resource manufacturing, particularly, is a bigger part of our industrial base than many may realize.

[1355]

British Columbia’s highly visible resource-based manufacturing sector — wood products, pulp and paper, petroleum and coal products, and primary metal products — are important and contribute significantly to British Columbia’s international exports. Yet according to the Business Council of B.C., non-resource manufacturing is even larger than resource-based manufacturing, both in terms of GDP output and number of jobs here in British Columbia.

Non-resource manufacturing in British Columbia is very diverse, comprising 14 different industries. Among the industries: food, machinery, fabricated metal, computer and electronic products, transportation equipment, beverages, chemicals, non-metallic mineral products, plastics and rubber manufacturing, printing and other related products.

The entire manufacturing sector pays wages that are, on average, 15 percent higher than the overall wage for all industries. Manufacturers are much more likely to invest significantly in private sector research and development.

Manufacturing firms in British Columbia tend to be bigger than firms in other sectors and are, therefore, better able to sell into other markets within Canada and abroad. Naturally, there are challenges. However, this month is the occasion to celebrate the achievements of the sector. I invite members to visit firms in their ridings and engage with the workers and the business leaders of this vibrant part of the B.C. economy.

[ Page 9483 ]

Oral Questions

YOUTH DEATH CASE AND

GOVERNMENT SUPPORT FOR YOUTH

IN CARE AND AGING OUT OF CARE

J. Horgan: Last week we in the opposition laid out and underscored the scope of the failures of the Ministry of Children and Families when it comes to protecting and caring for children in care: children dying of unexpected and unexplained circumstances, children being placed in care with abusers and children being taken from group homes, inappropriately housed and left abandoned.

The Premier has said that she wants to learn from these examples, and I’m encouraged by that. But would she agree with me that the best way to learn these lessons is to bring in new eyes and a new vision for protecting children in British Columbia?

Hon. C. Clark: As I’ve said in the House over these last several weeks a number of times, the issue of a review is something that is underway in the ministry. Having Bob Plecas — a former, respected deputy minister, who served governments of all stripes in our province — come in and look at some of the specific issues will be a big help to that. Making sure that we understand very specifically what happened in the case of Alex Gervais will be another important piece of the puzzle.

I want to make sure that this work is done as quickly as possible. Children who depend on us, depend on us today. We need to make sure that we get the information, get to the bottom of what happened, to try and ensure that we can address the issues that any review will raise as quickly as we possibly can so that we can ensure that those children who are in government care are looked after as well as possible today.

Madame Speaker: The Leader of the Official Opposition on a supplemental.

J. Horgan: I agree that reviews of the deaths of children in care are critical if we’re going to learn anything. Again, I disagree with the Premier on who best to have a new and reviewed and invigorated look at how the ministry cares for people. Therefore, I want to raise the case of Carly Fraser.

Carly Fraser was in the care of the ministry, a deeply troubled teenager with a history of drug abuse, mental illness and attempted suicide. She was put in a group home for one year, and at the end of that year, she was then removed, at age 16, to a basement apartment, left with minimal supervision and without any supports whatsoever. She was sexually abused on that first weekend, and life spiralled down further for that 16-year-old.

My question to the Premier is: is that what we can expect from the Ministry of Children and Families — that 16-year-old girls are going to be left to their own devices in basement apartments?

Hon. C. Clark: Well, of course, the member knows I cannot, will not — because the law prevents me — and should not comment on specific cases of individuals. But I will say this.

You know, the Ministry of Children and Families has worked very, very hard, all of the staff on the front lines doing some of the hardest jobs in the world. The minister has worked incredibly hard, as well, to make sure that the ministry is as modern and as up to date as possible and continuing to strive to always improve — increasing front-line staff by 21 percent, decreasing the number of children in care.

[1400]

We do believe and we know, based on the science that we see, that children are better off in almost every case when we can find ways to support them in staying in their families, making sure that those families have what they need to do their job as parents as well as they can and allowing those children to maintain those relationships, which are so vitally important.

The number of children who are in the care of the government is now down to about the lowest level it has been in 15 years. That has been the result of a lot of hard work, and it has been a purposeful goal that the government has set so that we can ensure that we are always doing better to support children who are vulnerable across the province.

Madame Speaker: The Leader of the Official Opposition on a further supplemental.

J. Horgan: The Premier’s response is incongruous to Lisa Fraser, the mother of Carly, who was here today and who was seeking answers and seeking help, just as the Premier alleged the ministry would be directing their staff to do.

This went on for some time. At 16, she was moved out of the basement apartment and into another group home. She fled from that group home, and that led to harder drugs and a harder life. Twenty hours after she turned 19, Carly Fraser leapt from the Lions Gate Bridge and took her own life. Her mother had appealed to the ministry for help, but she had aged out — 20 hours and had aged out. So no review will be done by the ministry as a result of that.

How can we possibly learn from the loss of Carly’s life if the ministry won’t even open the file?

Hon. C. Clark: We and the ministry certainly seek to learn from the experiences, both positive and negative, of all of the children who have found their way through government care.

For most of them, that experience is one that can set them on the path to a new life — 273 youth placed for

[ Page 9484 ]

adoption this year. That’s up by 21 percent since 2014. For those children, the story is a better one, where they get an opportunity to start a new life in a new family and where they know that they will have permanency. They know who will be there when they celebrate their birthday the following year.

There are stories, as the member points out, and real events in people’s lives that are not so positive. The ministry strives to make sure that they learn from all of these events, that we support our front-line workers by increasing the number of front-line workers — for example, another 110 child care workers added this year, an increase of 11 percent — that we’re supporting them through training and that, through regular reviews, some of which are underway now, we’re constantly improving the practice of the ministry.

These children and their families depend on us to make sure…. Because they are vulnerable, we do the best we can to protect them. We are going to continue to do that, and this minister is working incredibly hard every day to make sure that everything we do is constantly improving.

K. Corrigan: The Premier talks about some children doing better after they are in care, and Carly Fraser was doing better. She was in a group home that she was doing well in. But when she hit the age of 16, she was removed from that group home where she was progressing. She was going to school. She was working. She was taken out of that group home, and her mom was told that happened because they were “out of time.” That was the quote from the social workers.

For her, within a couple of months in that basement suite, living by herself, she was raped twice. She quit school, she quit her job, and she started on a downward spiral that resulted, eventually, in her death when she jumped from the Lions Gate Bridge.

When we asked the Premier questions about Alex Gervais’s death, she blamed the delegated agency and said there would be consequences. Then she said that government needed to review the matter in order to understand who was at fault.

When it came to Carly Fraser, the government had a very different approach. When Carly’s mother, just a few months ago, asked the ministry to review her death, the ministry refused and closed her file. The reason they gave was that Carly Fraser jumped from the Lions Gate Bridge on her 19th birthday.

Does the Premier really believe that because Carly took her own life 20 hours and 35 minutes after turning 19, the ministry has no obligation to review her case and learn from the tragedy of her death?

[1405]

Hon. S. Cadieux: The member and the members opposite all know all too well that we cannot speak about the specifics of any circumstance, happy or tragic, in this House.

What I can tell you is that we have been making continuous improvements in the Ministry of Children and Families. We’re measuring and analyzing the work we do with more scrutiny than ever. Our annual performance management report is on line and available, and it’s unique among provinces. In fact, other provinces are looking to us for advice on how we do that work. I’ve insisted on expansion of the ministry’s quality assurance to include work around adoptions, because permanency is one of the most important things that we can do for children in care, and it hasn’t been good enough.

As promised, as part of our response to the representative’s report on Paige in the Downtown Eastside, for the first time ever, all 19-year-olds who tragically die but have received services from the ministry in the last year will also have their full case file reviewed by the office of the provincial director.

Madame Speaker: Burnaby–Deer Lake on a supplemental.

K. Corrigan: Well, the minister may say that she can’t talk about this case. Carly is not around to protect anymore, and her mother is in the gallery. She’d certainly like some answers, because she’s been getting nothing but the wrong answers so far.

The minister certainly has the ability to order a review. Carly’s mother, Lisa, wants a review of her daughter’s death. She thinks that a review will help the public understand what went wrong, why the ministry abandoned Carly and what government can do to prevent more such tragedies. As I said earlier, on August 6, just two months ago, she wrote to the minister and asked her to initiate a director’s review.

Here’s what the response said: “Because she was 19 years old at the time of her death, she was no longer considered a child or youth, and therefore, according to ministry policy, her apparent suicide was not reported to the director, nor can this incident be considered for a case review.”

The Premier said we should learn from tragedies. Again, does she really believe that we shouldn’t learn from Carly’s case because she took her life 20 hours and 35 minutes after she turned 19?

Hon. S. Cadieux: Again, I cannot speak to the specifics of any circumstances in the House. The members are always welcome to bring concerns that are raised to them to my office, and within the limits of what we are allowed to disclose, we will do that.

Certainly, we are always looking for ways to improve the work that we do and the services that we provide to children and families in this province. I’ve outlined much of that over the last couple of weeks, and I expect that I will have opportunity to outline more for the members.

[ Page 9485 ]

C. James: The ministry’s indifference to Carly’s plight started well before her death. Her care agreement expired when she was 17. Her mother, Lisa, pleaded with the ministry to renew the agreement and help Carly. The ministry did not renew this agreement. Carly ended up on the streets and deteriorated further and further.

The Premier says that they’ve decreased the number of children in care. Well, let’s all remember in this House that Carly was one of those children. She was pushed out the door without supports and without government care.

Does the Premier recognize that children like Carly deserve better than they are getting from her government? And will she support a case review for Carly and her mother, Lisa?

Hon. S. Cadieux: As the members know, we’re not going to talk about the specifics of any case in this House, and we are always looking at the services that we provide to youth.

Our front-line social workers every day do the hardest work in the province. They do that work because they care about kids and they care about the outcomes for those kids. For anybody to suggest otherwise is absolutely incredulous.

[1410]

Madame Speaker: Victoria–Beacon Hill on a supplemental.

C. James: What is incredulous is that this government has removed the supports that social workers need on the ground to give the supports to children like Carly. That’s what has happened from this government.

The ministry knew about Carly at the time her care agreement expired at 17. They knew she was using drugs. They knew she’d been institutionalized with mental health issues. They knew she’d been sexually assaulted twice. They knew she had attempted suicide at least once and talked openly about doing it again.

So does the Premier think or believe — not talking about a specific case — that cutting a 17-year-old off without any ministry supports is the right decision ever to make?

Hon. S. Cadieux: The services available through the Ministry of Children and Families are extensive. We have a system of supports through our foster families, through group homes, through individualized resources for youth. For older youth, we have agreements with young adults, if that suits the individual.

The work that the social workers do on a daily basis is tailored to the individual child and their needs. That work continues with the supports provided through our child and youth with special needs budgets, programs and services to help youth with disabilities, to support youth with mental health challenges.

We know that the children and youth and families that interact with the Ministry of Children and Families on a daily basis are some of the most vulnerable in our province, some of the most complex and difficult and challenging circumstances for us to work with but, most importantly, for those families and individuals to deal with. And our intent and our work every day is to try and provide the absolute best system of supports that we can.

REVIEW OF YOUTH IN CARE DEATH CASE

D. Donaldson: The family of Alex Gervais is calling for an independent investigation into his death, but the minister insists on an internal review. Yet in the J.P. case, the minister decided to appoint an independent review conducted by Bob Plecas.

Stó:lō Tribal Council vice-president, Tyrone McNeil, points out that that is a double standard of accountability. To the minister, why the double standard?

Hon. S. Cadieux: The member well knows that any time there is a death of a child in care, there are a number of processes that are triggered, the first of which is a coroner’s look and a police investigation. Then the director takes their opportunity, and in this case, the provincial director of child welfare has launched a case review.

It is not appropriate for the minister or any member of the House to instruct or advise the provincial director on how to conduct that review or what it entails. It is also not appropriate….

The director must do that work unfettered. The whole point is to keep politics out of reviews. The process for a review is the same by the director, regardless of whether or not a delegated agency or a ministry office was in charge of the file.

The director has developed additional policy, as I mentioned just earlier, that every death involving a child in care will be reviewed — and expanding powers to review the death of a child that has been in care of the ministry past their 18th birthday.

I will let the review unfold. Following that, the Representative for Children and Youth retains authority to also do a review, should she feel that’s necessary.

Madame Speaker: Member for Stikine on a supplemental.

[1415]

D. Donaldson: In one case, the minister appoints an independent review when a young girl is sexually abused in the ministry’s care. In Alex Gervais’s death, the Premier and the minister point fingers at the delegated agency before an internal review is even conducted. That demonstrates chaotic leadership at the top of this ministry.

Will the minister do what the family is asking? Will she do what the Stó:lō chiefs are asking? Will she agree to an independent investigation into the death of Alex Gervais?

[ Page 9486 ]

Hon. S. Cadieux: As I said, the director of child welfare has launched a review, and we will wait to see what the result of that review provides us in terms of information on what happened in this particular instance and what case practice, policy or other implications flow from that.

REVIEW OF CHILD PLACEMENT CASE

R. Austin: The children’s minister committed that the Plecas review into the J.P. case would be completed by October 13 and will be made public by October 21. My question is: will the minister honour that commitment?

Hon. S. Cadieux: The appointment of Mr. Plecas was, I believe, a responsible and coherent approach to a very difficult situation. What motivated that appointment was the desire to address a very difficult situation and respect the needs of the family in the case. We also must be respectful of legal requirements. As such, I have been informed by Mr. Plecas that he may request an extension in time. If that is indeed the case, then we will report that as well.

Madame Speaker: The member for Skeena on a supplemental.

YOUTH DEATH CASE AND

GOVERNMENT SUPPORT FOR YOUTH

IN CARE AND AGING OUT OF CARE

R. Austin: Almost six months ago, the Representative for Children and Youth issued a heartbreaking report into the tragic life of an aboriginal girl named Paige. Paige died alone on the streets of Vancouver, shortly after aging out of care. The children’s minister refused to accept the recommendations made in that report. All she offered was the promise of a rapid response team to help youth on the Downtown Eastside.

Nearly half a year later, we’ve seen no real action and no real response on the ground, let alone a rapid response. Does the minister think that that’s acceptable?

Hon. S. Cadieux: I am pleased to report to the member that in fact the team is fully operational and working. They’ve met. They’re to look at the needs of the most high-needs individuals in the Downtown Eastside. We’ll have more to say about the model and the response to the rest of the recommendations in that report, once we’ve had an opportunity to brief the representative.

CHILDREN AND YOUTH COMMITTEE

MEETING CANCELLATIONS

M. Farnworth: Yesterday, in response to questions on why the Select Standing Committee on Children and Youth cancelled its previously scheduled hearings, the Premier said: “It is not the Premier’s or any member of the government’s role to be directing the work of a select standing committee of the Legislature” and that these decisions are made by the committee.

Given those comments, hon. Speaker, I will direct my question under Standing Order 47A, MacMinn’s fourth edition, the rules under which this House operates, to the only member who can answer my question, the Chair of the Select Standing Committee on Children and Youth, the member for North Vancouver–Seymour.

I’m sorry that the Premier thinks it’s a humorous issue, but it was a very serious question. My question to the Chair of the Select Standing Committee on Children and Youth, the member for North Vancouver–Seymour: can the Chair tell this House what obligations were so important that they required the sudden cancellation of already-scheduled meetings with the children’s representative?

Madame Speaker: If I might, the purpose of question period is to seek information from members of executive council.

[1420]

M. Farnworth: Thank you, hon. Speaker. I would draw your attention to the standing orders, MacMinn’s fourth edition, 40(1)(a), page 141, Erskine May’s edition 23, page 345, Beauchesne’s sixth edition, page 119, that deal with questions to private members. The authority states that the only time you can ask to a private member is a Chair of a committee.

The Premier, in her comments, made it clear that it is not the role of the executive council to direct the work of a committee. Therefore, hon. Speaker, the only opportunity that I have to ask about this business is by directing a question to the Chair of the standing committee.

Again my question is to the Chair of the Select Standing Committee on Children and Youth. What were the obligations? Why were they so important that they required the cancellation of already scheduled meetings with the children’s representative, the very individual that the executive council set up the committee that she chairs to hear from?

Hon. M. de Jong: I have not, I’m afraid, committed Standing Order 47A to memory. I realize this, generally, isn’t the place where we have procedural discussions, so I will make my comments brief and point out that in the reference that the hon. Opposition House Leader has made, it speaks to the fact that questions could not suggest a particular subject for inquiry, nor could the question deal with evidence before a committee.

In Parliamentary Practice , it indicates a very, very narrow scope, and, Madame Speaker, I would suggest that this particular question falls outside of that scope.

[ Page 9487 ]

Madame Speaker: If I might comment, it has not been the practice of this House. It has not been the practice.

M. Farnworth: Thank you, hon. Chair. That’s why I respond to my colleague the Government House Leader. These are the standing orders, MacMinn’s fourth edition, that govern this House. It’s very clear on the narrow scope that a question to the Chair of the committee can be permitted.

I am not asking about votes on the committee. I am not asking for a referral or for the committee to do something, which my colleague the hon. House Leader would be absolutely correct on. I am asking for an explanation for a decision that the committee Chair made. That is perfectly legitimate under the standing orders of this House and backed up by both Beauchesne’s and Erskine May, which also guide this House.

Hon. M. de Jong: I’m always interested, of course, in the hon. member’s views on the

interpretation. I’m going to suggest that in this case, this is a little bit of uncharted territory for the House and, in those circumstances, seek guidance from the Chair.

The hon. Opposition House Leader may, like me, wish you to have some time to consider what that guidance would be. That may be the best way to resolve the issue, given the fact that the passage quoted a few moments ago doesn’t refer to any precedent within this chamber for the procedure that the member has referred to.

DEATHS OF MOTHER AND SON IN PRINCE

RUPERT AND INQUEST RECOMMENDATIONS

ON TRANSIT SERVICES

M. Karagianis: During the recent inquest into the deaths of Angie and Robbie Robinson, we learned that lack of access to affordable transportation between communities is a real barrier to families needing to access services for children with autism.

[1425]

The inquest sent a recommendation to the Minister of Children and Families. It asked her to “ensure transportation costs and availability are part of respite planning.”

Will the Minister of Children and Families be acting on this recommendation?

Hon. S. Cadieux: As I said, I thank the Coroners Service and the jurors for their work. It was certainly difficult work, I’m sure, to hear about and to consider the very tragic circumstances surrounding this tragic murder-suicide.

The coroner’s recommendations will be taken and reviewed and thought about very seriously before we respond. We’ll do that in addition to considering the practice considerations that were highlighted during the recent testimony and that information that was examined through the director’s case review of this circumstance as well.

We anticipate formally receiving the recommendations in the near future, and after consideration, we’ll be in a better position to respond specifically to the recommendations.

M. Karagianis: For many years now in the House, we have been calling on the B.C. Liberal government to bring in an enhanced public transportation system to link northern communities. The coroner’s inquest is calling on the minister, again — a second recommendation — to “ensure transportation issues are addressed separately from autism and other special needs funding for families in rural and remote communities.”

Again, a question to the minister: will the Minister of Children and Families be demanding better transportation services between northern, rural and remote communities so that families can access services they need along this route?

Hon. S. Cadieux: I think there are a number of interesting and serious recommendations to be considered. We know that service provision in rural and remote communities is a challenge, not just for autism services or supports for people with autism, but also, similar challenges are faced by individuals needing medical treatment and otherwise.

We will consider the recommendations thoroughly and provide a response.

[End of question period.]

S. Fraser: I seek leave to present a petition.

Madame Speaker: Proceed.

Petitions

S. Fraser: Just a heads-up to our esteemed chamber staff that in the interests of hernia prevention, I will be delivering those cards and petitions. There are about 100 pounds of them.

I have petitions from over 6,000 individuals very concerned about the loss of our remaining old-growth forest. The petition is calling on the Premier to deny permits for old-growth logging in the Walbran Valley.

Madame Speaker: Hon. Member and all those who would wish to table petitions in the future, the tabling can only occur if the petition is actually in the chamber.

Orders of the Day

Hon. M. de Jong: Continued committee stage debate on Bill 36.

[1430]

[ Page 9488 ]

Committee of the Whole House

BILL 36 — AUDITOR GENERAL FOR

LOCAL GOVERNMENT

AMENDMENT ACT, 2015

(continued)

The House in Committee of the Whole (Section

B) on Bill 36; R. Chouhan in the chair.

The committee met at 2:31 p.m.

section 10 (continued) .

S. Robinson: Glad that we’re back at it here again today. I have a number of questions on this section,

section 10.

The second amendment adds a new subsection that says: “For certainty, at a meeting convened in accordance with subsection (3) (a), the audit council may consider recommending to the minister the suspension or removal of the auditor general.”

I would like to hear from the minister, if he could share with the House, how he understands that amendment.

Hon. P. Fassbender: I think I answered this, in part, yesterday. The audit council’s role is to provide oversight and review of the performance of the office. They can on their own volition, based on that review or any concerns that they have, make recommendations to the minister.

S. Robinson: Does all of the audit council have to agree to this? How does that play out in practical terms?

Hon. P. Fassbender: Clearly, the audit council is a group that works together. They deliberate. They ask for reports or reviews, and then, by resolution, they would make a decision that would go forward to the minister as a result of that.

S. Robinson: Well, it might be clear to the minister, but it’s not as clear to me because the way that I read it, in the original legislation,

section 21(3)(a), it says a meeting of the audit council “may be convened by the chair or by 2 members of the council with prior notice to the chair.”

Does that mean that the entire audit council needs to be there in order to have the discussion, or can just two members constitute enough of a meeting in order to make a decision?

Hon. P. Fassbender: The general practice of any committee, and why this is there, is if the chair was to be absent and two members of that council would want to convene a meeting — that is to call a meeting — of all of the members of the council, they can do that.

S. Robinson: If that’s the case — and my understanding is that the act already provides the audit council the ability to make recommendations around suspensions and terminations — why is an amendment that provides for the audit council to meet to discuss suspension or termination being introduced? Why is this particular amendment necessary?

[1435]

Hon. P. Fassbender: The purpose of this is to bring absolute clarity to the audit council — that this is one of their responsibilities and that they can, on their own volition, make a recommendation to the minister.

S. Robinson: That suggests that in the original act, it wasn’t clear what the role of the audit council was. Now this is to define very specifically what they can and can’t do, so that the audit council can recommend to the minister that the auditor general is not performing and ought to be fired.

Hon. P. Fassbender: Indeed, it is to bring absolute clarity. Where there may have been an inferred responsibility previously, now it is absolutely clear to the audit council what their responsibilities are and what they are able to do, on their own volition, in making recommendations to the minister.

S. Robinson: Yesterday, when I was asking the minister questions, he certainly had lots to say about not reading into the future what possibilities might be, but I do really believe that when you’re writing legislation you have to anticipate. If you don’t anticipate, like they did originally when they put this out, then you wind up with holes in the legislation.

I think it’s important that the minister entertain the idea of anticipating what could happen. I would like to ask the minister a question that entertains possibilities.

What happens if the audit council feels that there is some concern about the performance of the Auditor General for Local Government, but the minister believes that it’s just fine, that the performance is just fine? How does that play out in this future possibility?

Hon. P. Fassbender: What we have learned, because of past situations, is that the role of the minister in working with the audit council, hearing recommendations, is paramount to ensure the good order and the good process that we move forward. The minister’s responsibility is to work with the chair and with the audit council, to receive their recommendations, but ultimately, as it is in the case of the appointment of the Auditor General for Local Government, the minister has the final decision-making power.

S. Robinson: Based on the minister’s response to that question, with the minister working closely with the aud-

[ Page 9489 ]

it council chair, can he explain how the independence of the office, the independence from politicians and from political influence, is going to be maintained?

Hon. P. Fassbender: Well, very easily. The minister will want to ensure that the audit council has the opportunity to speak with the minister, to make recommendations to the minister, and the minister is bound by practice to listen to that and then make a determination if one is required.

That has no influence on the independence of the office and the operating of the office, because the Auditor General for Local Government, as I said yesterday, has the right to make any decisions in terms of the functioning of the office, the reports that are being done.

[1440]

S. Robinson: Well, I would beg to differ around what influence looks like. Certainly, the minister has his own perspective on what influence looks like.

I would like to hear from the minister, because he talked so much yesterday with such passion and commitment about a partnership and a relationship with the UBCM, how he sees this fitting into that relationship, given that the UBCM has said on their site that they see the independence of the audit council as very important. That’s a quote from the UBCM’s website. They have expressed some concerns.

How is he planning to address his relationship with the UBCM about making sure that his relationship with the audit council, a council that he’s saying he will work very closely with…? Where will the independence wall be established?

Hon. P. Fassbender: Clearly, the audit council is appointed by the minister. The audit council operates separately from the minister. They have their deliberations. They work with the Auditor General for Local Government to ensure that the principles of the office are being maintained. The minister is clearly willing to hear recommendations that come from the audit council, when the audit council deems that it wants to make those recommendations to the minister.

The minister does not sit with the audit council and direct them on what they need to do but is there to hear their recommendations once they have come to some conclusion on any issue.

S. Robinson: I’d like to know how members of this House will know that that’s in fact happening.

Hon. P. Fassbender: Because it will be happening.

S. Robinson: So this is another one of the “just trust us” models of governance. That’s really very, very helpful.

I don’t have any other questions on this.

Section 10 approved.

section 11.

S. Robinson: I have a number of questions on this section.

section 11, there are additional parts that are made in terms of access to records and information. I’m particularly interested to understand why this didn’t appear in the first version of the act.

Hon. P. Fassbender: Again, as a result of the practice that was under the old act, it was clear that the Auditor General for Local Government needed to have complete clarity as to the responsibilities to provide the audit council with any records or information that they needed in order to do their work and their responsibilities as they are defined.

S. Robinson: There is clarity that there was lack of clarity, is really what I’m hearing, so they had to bring in some clarity. That’s great.

What’s the difference between this

section and the requirement under subsection 16(2)(

c) that requires the AGLG to provide records to the audit council and staff assisting the council?

[1445]

Hon. P. Fassbender: Under the previous act, the Auditor General for Local Government had the discretion to provide the information. This modification absolutely ensures that when the audit council asks for information, it has to be provided. Again, because of experience that we had, it was very clear that that had to be very clear and that it was legislated that the Auditor General for Local Government had to provide that information.

S. Robinson: If I am to understand the minister’s explanation, the previous AGLG, who was fired by the minister, would refuse to provide documents. That was the

interpretation that was understood by that previous Auditor General for Local Government, and then she subsequently decided to sue as a result. So this is a way to make sure that this doesn’t happen again. That’s helpful.

Moving along, I have another question related to this. Can the minister give an example of a record that would be exempted under subsection 21.1(1)(a), “a record or information obtained in the exercise of a power or the performance of a duty of the auditor general under this Act”?

Hon. P. Fassbender: The clarity here is that when the Auditor General for Local Government and the office does its work, it receives documents in confidence from local governments. This ensures that the audit council can’t reach through the Auditor General for Local Government to documents from local governments.

[ Page 9490 ]

Their role is to get information from the auditor general that he provides in terms of his

summary reports and so on.

S. Robinson: Can the minister describe what the expectation, then, is of which documents will be provided? Which are the standard documents that one would expect would be asked of the Auditor General for Local Government to provide to the audit council?

Hon. P. Fassbender: By example, any of the working documents that the Auditor General for Local Government has on the performance and the functioning of the office, the reports that are being compiled, which ones are underway, what status they might be…. There are a number of things that actually relate to the functioning of the office and the work that they’re doing.

As I said, it does not include those things which are given in confidence by local governments to the auditor general, but all of those other things that relate to the staffing of the office and all of those issues are what the audit council can ask for and would receive.

S. Robinson: I thank the minister for that response. That was helpful.

I have another question that relates to the part, “Report to minister.” That’s 21.2: “The audit council may prepare a report respecting the performance of the auditor general in relation to any or all of the matters referred to in

section 19 (1) (

j) and may provide the report to the minister.”

[1450]

Can the minister please tell us what the purpose of this clause is?

Hon. P. Fassbender: I believe I’ve answered it, but I will answer it again. The role of the audit council is to review the performance of the Office of the Auditor General for Local Government and all of its aspects as it relates to its performance, whether that be reports that are underway — any of those things. This makes it absolutely clear that the audit council, based on that review, may provide a report or recommendations to the minister as a result of that review.

S. Robinson: It does say “may provide” a report, which gives them a lot of flexibility. What does the minister envision would be the conditions under which the audit council…? Or perhaps he has expectations under which the audit council would actually act on this clause.

Hon. P. Fassbender: I think it’s very clear. The audit council does its work if they feel, based on that review, they have a recommendation or communication they want to make to the minister. They have the opportunity to do that. We’re not suggesting that they have to do it a certain number of times. That is in their discretion because they are independent in the reviews that they do as well.

S. Robinson: The minister says that they are independent if they do a review. Well, what happens if, for example, in this House there are some questions during question period that we ask of the minister that suggest that maybe there are problems over there in the Auditor General for Local Government office, as happened last February, March and well into April? Will the minister be able to go to the audit council and ask for a report? Does it work both ways?

Hon. P. Fassbender: For me, it is very clear. If indeed the minister is made aware of an issue that someone brings to the minister’s attention — because the minister is absolutely finally responsible for this function — then the minister would pick up the phone, speak to the chair of the audit council and say: “A concern has been raised. Is there an issue that the audit council has reviewed and has a perspective on?”

If they did, then I would say: “I would appreciate your report, based on that.” Or the chair would determine that he would ask the audit council to look into something that had been registered as a complaint, and if there was a report that came out of it, that would come forward to the minister.

If the chair said that the audit council has no concern over that issue and has nothing to communicate to the minister, then the minister would accept that position from the audit council.

V. Huntington: I wonder if the minister could advise us whether, in the performance of their duties — they are reviewing or monitoring the preparation of a performance audit or the conduct of a performance audit — the audit council itself could not make a determination of the appropriateness of that preparation or conduct without having access to the record of local government.

[1455]

If they’re not permitted access to those records, then how, if they were in a conundrum, could they determine whether the conduct of that audit was appropriate or not?

Hon. P. Fassbender: For clarity for the member, the role of the audit council is to provide overview and oversight on the overall performance of the office, not the specific review of individual reports. If there was a concern about that, and in order to protect the confidentiality of local governments, the audit council has the opportunity, through the professional organizations, to raise that issue. That would be reviewed by a party that is bound to that same confidentiality standard that the Auditor General for Local Government office is as well.

V. Huntington: But with respect to the minister’s answer,

section 8 specifically says that the audit council

[ Page 9491 ]

can review and monitor the performance of the auditor general in respect of the exercise of his powers and performance of his duties, in the planning and conduct of performance audits and the preparation of performance audit reports, annual reports and other reports, if any.

Again, with respect, I would say that if they can monitor and review whether or not those reports and the conduct of those reports are being prepared appropriately, how could they do that without access to the information that is bound and the central purpose of the preparation of those reports? How could they do that? It’s quite specific here in

section 8 that they have that authority.

Hon. P. Fassbender: Again, to provide clarity, the audit council’s job is to look at the overall performance of the office, the scope of the audits and the reports that are being done — the timeliness of those — and the management of the overall operation.

[1500]

There is a quality assurance council, as part of the Auditor General for Local Government, that gets into the detail of each of the individual audits. That is not the role of the audit council. It is ensuring, under standards that are common practice within the industry, that the Auditor General for Local Government respects the confidentiality. The audit council’s role is not to get into the detail of those audits but to look at the bigger picture of the overall performance of the office.

V. Huntington: I thank the minister for that answer. I’m just looking at the specific wording of the sections and trying to reach clarity. I appreciate it.

The minister just mentioned a quality assurance council. Did I misunderstand him, or is there some other body here that we’re not aware of?

Hon. P. Fassbender: Standard practice for auditor general offices is to bring in a quality assurance council that comes in. They’re contracted to come in to make sure that the appropriate procedures are followed, that the diligence is done under the professional standards. That is not a separate council set up by the audit council or the Office of the Auditor General. They bring in people, which is a bit of a check and balance for them as well. They are brought in as needed by the Office of the Auditor General.

S. Robinson: This is interesting, and I appreciate the member for Delta South asking the question. It’s the first time I’ve heard about this quality assurance council, and I’m puzzled by these layers of bureaucracy that we keep seeing and how much this is costing taxpayers. Certainly, it invites questions about value for money, given the cost of this office.

I do have a question about what the minister said earlier, in response to one of my earlier questions. The minister stated that he can, in fact, ask for a report from the audit council. I have a question about how this is different from perhaps asking for a report from a deputy minister, given that the minister does handpick the audit council. In some ways, one could perhaps perceive that the audit council reflects the desires of the minister, but they’re somewhat independent, sort of, because they’re in a different body, and the minister can then ask them to report back to the minister.

I’m still trying to reconcile…. I know that the minister has been, perhaps, frustrated, because he keeps saying “for clarity.” But I’m still struggling with, and I think others in this House are struggling with…. I think that British Columbians need to have some assurance that there really is independence in this office, given how strongly this government was committed to independence in the office and that it would be disrespectful of that if we didn’t ensure that there was real, clear independence in the office.

If this is troublesome to the minister in terms of my continuing to ask about it, that means that the assurances — I don’t think they’re really clear to members in this House.

Hon. P. Fassbender: What’s very clear is the fact that the audit council is appointed by the minister. The criteria for the kinds of individuals that we would be appointing to that council are contained within the act. I indicated yesterday, in response to UBCM and local governments and the issue of sensitivity to local governments, that my intent is to appoint two previously elected individuals to that council.

There’s no question in my mind that members opposite might say the people that are appointed have a particular bias. I do not believe that for a second. The quality of the individuals that are in the audit council have been selected for their background, their experience, their sensitivity.

[1505]

As I said, the minister does not direct the audit council on what to do. That is up to them, given the context of their responsibilities. They operate independently, but ultimately, they are charged with reporting to the minister. If there are issues that the audit council believes require action by the minister, they will communicate that to the minister. But the audit council is a body that meets on its own. If they have an issue they wish to discuss with the minister, they’re free to do that, and from that, the minister may or may not take any action, as required.

S. Robinson: Thank you for that response.

I’m sure the minister is well aware, and I’m certainly well aware, as some of my other colleagues are well aware, of appointments that have been made where there perhaps hasn’t been the kind of expertise one would expect. There is one that just came out of my community that has people shaking their heads about an appointment that this government made and saying: “We don’t even

[ Page 9492 ]

understand how it was that she got appointed.” But that, we know, happens quite often in different communities — that we wind up shaking our heads.

The minister said yesterday as well as today about his commitment to appoint two additional people to the audit council. I’m assuming that grows the number to seven, because I can do math and I do understand math concepts. The minister has said that several times. Perhaps he could share with the House what the timeline is on those appointments.

Hon. P. Fassbender: Imminent.

S. Robinson: I have a couple more questions on this. Actually, no, I don’t. I got distracted, so I will let this one pass.

Section 11 approved.

section 12.

S. Robinson: Okay. On this one, we have some stuff being repealed, and then there is a change in some of the language around: “fiscal year addressed by the estimate referred to in paragraph (a)” and substituting “upcoming fiscal year.”

I just want to make sure I understand what the meaning is of that. If the minister could just clarify the purpose of that change and make sure that I understand it, I would appreciate it.

Hon. P. Fassbender: Those changes are consequential to

section 9, and it just brings clarity in terms of the fiscal year and the estimate process that is clarified there as well.

S. Robinson: I thank the minister for his response to that.

Further down in this section, we see that there is a subsection that is expanded, (3.1), where it says: “Before preparing a proposed annual service plan under subsection (1), the auditor general must, in the manner and to the extent the auditor general considers advisable, consult with the Union of British Columbia Municipalities respecting themes on which some or all performance audits may be based.”

Has the minister had a chance to chat with the UBCM in terms of this particular change in the legislation?

Hon. P. Fassbender: When I met with the executive of UBCM, at least the outgoing and the incoming presidents, I made it very clear that, again, as a result of feedback from UBCM, it is the expectation of the minister to the Auditor General for Local Government to sit down with UBCM and to talk about the various themes that would be used in the functioning of the office.

[1510]

That relationship is one that needs to be built and that was not existent previously. It is an important function in terms of assuring local governments that the role of the office is to be one of supporting change and opportunities for local government in identifying best practices. That relationship is an important function of the office. That is why it is clarified in here that that is one of the things the Auditor General for Local Government is expected to do.

S. Robinson: The operative word in this clause is “consult,” and consult can take on many different meanings. Sometimes consultation is one-way. “Consulting” means informing, for some. I’ve certainly seen examples where that’s happened — where people were consulted, but really they were informed — and other times where consultation has happened, but it’s after a decision is made. So the consultation is after the fact.

I’d like to hear from the minister how he understands “consult” in this specific context.

Hon. P. Fassbender: Clearly, in discussions with UBCM, my

interpretation of that…. It is again up to the Auditor General for Local Government, because the functioning and the scope of work to be done are decisions of the Auditor General for Local Government.

But clearly, I have said to UBCM — and have said to the successful candidate who will be filling that office — that the expectation is that the Auditor General for Local Government will meet not only with UBCM as a body but with individual local governments to talk about the themes, the scope, the kinds of things that will be reviewed. That will be prior to terms of reference being developed for any given review, not afterwards.

S. Robinson: I’m hearing a little bit of a mixed message. I don’t know if the minister will appreciate the subtleties of this.

On the one hand, it’s up to the auditor general, and then on the other hand, there are expectations of the minister. I’m just trying to get clarity, because that’s not the same. They’re not equivalent. They’re different concepts. “Up to the auditor general” means it’s up to the auditor general. And if there are expectations of the minister, then it needs to be really clear that these are expectations of the minister.

The minister can’t leave it up to the auditor general and do this arm’s-length thing, but then have expectations. If the minister can, at least for the benefit of this House, tell us how he understands those two sides…. I’m not sure how you can leave something up to somebody, but then have these expectations that are laid out somewhere else.

Hon. P. Fassbender: I’ve said a number of times in this discussion that the lessons we learned that brought us to where we are today — but more importantly, where we’re going tomorrow — is that this office’s function is to

[ Page 9493 ]

support local governments. It is not to provide a negative view of what local governments do but to help them move forward in a positive way.

Clearly, the minister’s expectation — I’ve said it publicly, and I stand by the comments that we have made as government — is that we want to see the Office of the Auditor General for Local Government be sensitive to local government’s needs, be sensitive to the issues that they face and to work with them. That is the direction.

[1515]

Beyond that, the minister does not direct and will not direct the Auditor General for Local Government any further than to say — as I clearly said when I met the successful candidate: “My sincere desire is that two years from now, local governments will be able to stand up, as will UBCM as their representative body, and say, ‘We have a good working relationship with the office of the auditor general but also recognize that they have an independent function, even though we have a relationship with it to do the work that needs to be done, and we appreciate the value of the work of the office of the auditor general.’”

S. Robinson: I think at this point I’d like to reiterate that when this office was first proposed, it was always to support local government. This isn’t a new idea. It was always about supporting local government. We know that that was an experiment that went completely sideways. If it’s frustrating to the minister that we’re taking our time making sure that we get it right, given the colossal failure and waste of taxpayer dollars, I’m sorry if I’m doing too thorough a job for the minister.

I think it’s important to recognize that the UBCM does not support this office. Fifty-four percent voted to endorse to eliminate, or ask the government to eliminate, this office. The UBCM is quite concerned. That’s how I read that.

I think it’s worthwhile to make sure that this challenge around whether it’s independent or not is explained thoroughly and understood. The suspicion among local governments is that the independence of this office, which everyone believes is crucial, is being eroded by some of these changes.

I’m going to continue to ask the minister questions along those lines, because I think saying that something is independent when it’s not is problematic. Saying that I, as minister, have expectations of this office suggests that the minister actually does have influence about what happens out of that office. Then to say, “Well, no, it’s independent….” It’s like being a little bit pregnant. Either you have independence or you don’t have independence. Either you’re pregnant or you’re not pregnant. So I’m going continue asking those questions.

Moving on, in this section, by repealing subsection 5(a)…. That’s part of what’s happening in this amendment. I have questions, again, around what this removal means in terms of the actual practice and what we can expect to see from the audit council.

Hon. P. Fassbender: It has nothing to do with the operations of the office. It has everything to do…. It is consequential to the

section on the budget for the office.

S. Robinson: Does the removal of this subsection mean that the audit council can recommend changes that may affect the estimates process?

Hon. P. Fassbender: Again, it’s clear that subsection 9 has been repealed. That is why this change has been made.

V. Huntington: Earlier my colleague asked…. Given the use of the word “consider,” I think yesterday my colleague asked: what evidentiary requirements were there to ensure that an issue had been considered? I note on page 4, the page that

section 12 is found, and in sections 12, 13, 14 and 16, we see the word “consider.” All the way through these amendments we see the word consider.

The minister suggested that there were no evidentiary rules for that word. I wonder if he has considered at all whether there ought to be a definition for consider in this act.

Hon. P. Fassbender: I have considered it, and I consider the comment being a considered comment. The bottom line is that the language is being put there specifically in legislative language to ensure that the auditor general can consider, may consider — doesn’t have to — the information.

[1520]

S. Robinson: I see the member for Delta South and I were thinking along the same lines, because I have a whole number of questions about that language, around the difference between “may consider” and “must consider.” In some of the original act, there was “may consider.” Now there is “must consider.”

I’d like to know how…. The minister is now, I think, ultimately responsible for this office, which is how I’m understanding this. The minister is taking responsibility for the operations of the Auditor General for Local Government. How will he know that the AGLG…?

Where it says “must consider,” how will he know that it has been considered, versus the old language, which was “may consider”? That’s clearly different. There is an intention there that it be different, and I’d like to know how he would know the difference.

Hon. P. Fassbender: In that particular section, it says that “the auditor general must, in the manner and to the extent that the auditor general considers advisable, consult with the Union of British Columbia Municipalities.” So this

section clearly states: “…must, in the manner and

[ Page 9494 ]

to the extent that the auditor general considers advisable…” That is just to, again, bring clarity and to ensure that the auditor general knows that one of the intents of this office is to work with the Union of B.C. Municipalities in a collaborative and a cooperative fashion.

Section 12 approved.

section 13.

S. Robinson: We were getting ahead of ourselves a little earlier. Again here, we see this “must consider.” There’s a subsection in it: “

(4.1) The auditor general must consider any comments provided by the audit council under subsection (4).”

Again, we have this process that is…. I think I understand the intent. I think the intent is to go from “may consider” to “must consider,” which implies a directive. But if there’s no requirement to demonstrate, if there’s no evidence to suggest that that has been considered, how would the minister — who’s now declaring, with this legislation, that he’s ultimately responsible — know that the Auditor General for Local

[ Page 9495 ]

Government had, in fact, considered comments provided by the audit council?

Hon. P. Fassbender: Well, very easily. In the previous sections that we talked at length about, the audit council is the one who determines the functioning of the office, including comments that they make back to the auditor general. And clearly, if the Auditor General for Local Government did not consider the comments of the audit council, I suspect that that would have them question the performance of the office and may lead to a recommendation coming to the minister.

S. Robinson: If I’m to understand this…. I’m trying to overlay this in terms of how I imagine conversations had gone on previously with the audit council and the previous Auditor General for Local Government, where the legislation said “may.” The previous Auditor General for Local Government, who subsequently sued the government, read the legislation to say “may consider.” She chose, I imagine, to hear what was said but didn’t choose to act on the audit council’s request.

This is about making sure that the Auditor General for Local Government in fact acts in the way that is expected by the audit council, and all members of the audit council are appointed by the minister. I’m just trying to make sure that I understand the relationships, all the way down, in terms of understanding what the minister’s expectation is of the behaviour, the choices and the actions of the Auditor General for Local Government.

[1525]

Hon. P. Fassbender: Clearly, the audit council considers the performance of the office. If they see a gap or they have a concern, they would communicate that to the Auditor General for Local Government. The Auditor General for Local Government must consider their input but is not bound to do anything about that input if indeed the auditor general feels, because of their independence, that that has no relevance to the performance of their duties.

If that was to be the case and the audit council disagreed, again, the audit council then would have the opportunity and the right to communicate through a report and a motion of the audit council to the minister.

Sections 13 to 17 inclusive approved.

section 18.

S. Robinson: In

section 18, we have a substitution and review of the act, and I have a number of questions about this piece. It says: “Subject to subsection (2), the minister may, at any time, review one or both of (

a) this Act, and (

b) the functioning of the office of the auditor general.” It then goes on.

I’ll just speak to that. I want to ask about the specific purposes of these changes.

Hon. P. Fassbender: As the member, I am sure, is aware, the previous act had a time frame of five years. This now provides that the minister may at any time review the act or the functioning of the office, based, again, as I’ve said, on any recommendations and reports that come from the audit council.

S. Robinson: Perhaps the minister can explain specifically what it was that inspired the changes that we’re seeing here before us today?

Hon. P. Fassbender: It again goes back to the learning that we did in the functioning of the office. Again I reiterate what I said at the very beginning of committee stage that this was a new venture on the part of our government to achieve some very clear goals.

What was also obvious…. The members opposite were the ones that were standing in this House in question period many times asking where the minister’s leadership was in dealing with the issues they had raised about the functioning of the office.

Because of that learning, we are very clear that if issues do come up at any time that significantly impact the functioning of the office or, indeed, even the act, the minister may make changes at that time.

[1530]

S. Robinson: As I’m listening to the minister, I do recall how in this chamber we certainly had lots of questions about what was happening in that office. We all know the story about how the Auditor General for Local Government was fired and subsequently sued government. I understand that a settlement was made. We also know that there was a lot of waste of taxpayer dollars.

The minister likes to talk about the one taxpayer. I agree. There is one taxpayer. And we know that at this point, by my calculations, it’s over $7 million for half a dozen reports, of which two were found useful. For the sake of just having full knowledge, perhaps the minister can report to this House how much the settlement was for the previous Auditor General for Local Government.

Hon. P. Fassbender: No, I will not comment on that as part of this committee stage.

S. Robinson: I appreciate the response. Given the changes in terms of review…. And we know that this review, the idea of reviewing as needed, is really the change that we’re seeing, because the five years seem to provide some anxiety for the government around this office.

I’d like to know how this idea that the minister can review at a whim or at a desire, his desire, might impact on the independence of this office.

Hon. P. Fassbender: Not at all. Clearly, the review would be done if issues came to light either through the audit council or by other situations. But ultimately, the office and the functioning fall under the minister’s responsibilities. The minister is ultimately accountable, and as such, the minister would have the ability to move in a timely and effective manner if problems did arise again, which, I believe, with the changes we’ve made, will not be the case.

S. Robinson: Well, given the cost of this office to the taxpayers so far, I would hope that there wouldn’t be any more waste of tax dollars. But the minister, in answering the question, said that if issues came to light that would prompt a review of the act, but it doesn’t say that here. It says: “Subject to subsection (2), the minister may, at any time, review one or both….” It doesn’t say that the minister may, if issues come to light, review one or both.

I’m wondering if the minister can take a look at this and point out…. It does say “at any time.” It doesn’t specify that there have to be particular concerns that are brought by the audit council or brought by the Auditor General for Local Government. It just says “at any time,” which I read as “when the minister wants to, because the minister wants to,” not because there’s a particular issue.

Hon. P. Fassbender: If the minister was to review the act, it would come into this House, and the minister would have to give an explanation of why changes were being proposed to the act. That’s the process that we’re in right now in the changes that we are making to the act.

Again, the minister is not looking to review things for the sake of doing a review. The review is something that is a responsibility to ensure that the office fulfils the mandate that it’s been established to do.

S. Robinson: While the minister’s response about reviewing the act — it comes into this chamber — is quite accurate, it doesn’t speak to the functioning of the Office of the Auditor General. What that means, the way I read it, is that there doesn’t have to be a particular issue. The minister can also just say: “Well, gee, hmm. I heard from some community somewhere that they’re not happy with the auditor for local government. I’m going to go and take a look at the office and the operations of the office.”

I’m sure the minister can appreciate that this is some of the angst, certainly, that I am hearing from folks at the UBCM and how I’m understanding their concern that they put on their website around the independence.

[1535]

This is an issue related to the independence of this office, and I think it would be great to hear from the minister about how he is prepared to ensure that that’s, in fact, going to be the case.

Hon. P. Fassbender: I think, clearly, all of the changes that we are proposing in this act, all of the relationship issues that we’ve addressed that have come forward from UBCM and local governments, are to ensure absolute accountability for the purpose of the office and the functioning of the office. That’s the intent, and I can assure the member opposite that the minister is not going to, based on one community saying they didn’t like something, do a review of the functioning of the office.

I would suggest to that community very clearly that they work with the Office of the Auditor General for Local Government and raise their concerns. This further emphasizes the importance of the office being sensitive to local governments’ needs while still maintaining that independence but understanding, perhaps, some of the nuances that may apply to a local government in the province. It’s all about relationship-building on one hand but clear accountability on the other hand.

Sections 18 to 20 inclusive approved.

Title approved.

Hon. P. Fassbender: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 3:37 p.m.

The House resumed; Madame Speaker in the chair.

[ Page 9496 ]

Report and

Third Reading of Bills

BILL 36 — AUDITOR GENERAL FOR

LOCAL GOVERNMENT

AMENDMENT ACT, 2015

Bill 36, Auditor General for Local Government Amendment Act, 2015, reported complete without amendment, read a third time and passed.

Hon. A. Wilkinson: I call second reading of the Franchises Act, Bill 38.

Second Reading of Bills

BILL 38 — FRANCHISES ACT

Hon. C. Oakes: I move that Bill 38, the Franchises Act, be read a second time.

I’m delighted today to be introducing this important piece of legislation that will support the franchising sector in British Columbia. I’m delighted because I want investors and businesses in British Columbia to be set up for success.

[R. Chouhan in the chair.]

This legislation directly supports small businesses across British Columbia, opening the door for investment and employment opportunities by providing certainty for both investors and businesses.

Successful franchise owners tend to reinvest and open multiple franchise businesses, which leads to more jobs and career opportunities in both our urban and rural communities. We met some of those the other day. Franchise businesses play a significant role in British Columbia’s economy, and we want to ensure that private sector investments are encouraged.

This bill has been the subject of consultation for some time now. In the fall of 2014, the Ministry of Justice undertook a public consultation based upon a report published by the British Columbia Law Institute in March of that year.

[1540]

In July of this year, the Minister of State for Emergency Preparedness undertook consultations with franchisors whose head offices are located here in British Columbia. We’ve also consulted with the business community — groups like the Small Business Roundtable, the Retail Council of Canada and the Canadian Franchise Association. As MLAs, we have heard from our constituents as well. All agree that we must strike the right balance between protecting franchisees while upholding franchisors’ rights to freely contract. The proposed act does this.

Bill 38 is based largely on work that was done by the Uniform Law Conference of Canada and, most recently, by the British Columbia Law Institute. I want to offer my personal thanks to both these organizations for the significant work that they contributed to this bill.

I want to acknowledge the great number of individuals outside of government who worked with both my ministry and the Ministry of Justice and Attorney General in the development of this bill. We had the invaluable contributions of an advisory group of experts in franchise law. This group provided a great deal of advice and feedback over the course of developing this legislation. Many in the franchising community provided their input during our consultations process and contributed to the bill that we have before us today.

This legislation represents a balanced approach to ensure that franchisees and franchisors have the business certainty that they need to succeed. It protects vulnerable franchisees so that they can succeed in their franchised businesses, while at the same time providing a standardized regulatory framework for franchisors.

Without legislation regulating franchising in British Columbia, there are few legal options open to franchisees. This bill will provide important legal protection in British Columbia. For franchisees, it will provide the level playing field between them and the franchisors.

Franchise information resides solely within the franchisor’s knowledge and control. As a result, there have been situations where franchisees did not receive the full disclosure about critical information — information like revenues and costs, other franchisees, legal issues, and the like. If vital information is being withheld or the franchisee is misled, the franchisee stands to lose greatly.

For franchisors, it also provides protections. For example, it imposes a duty of fair dealing. This applies to all parties in the performance and enforcement of the franchise agreement. It provides a

section of substantial compliance that benefits the franchisor. If, for example, they had a technical irregularity or an error in their disclosure document, they would still be deemed in substantial compliance. As a result, they would not be subject to the remedies for disclosure set out in this act.

Most importantly, Bill 38 provides a standardized legislative framework that minimizes the regulatory burden, particularly for those franchisors who operate in more than one province in Canada. By harmonizing our legislation with the five other provinces which have a franchise act, we are greatly reducing the costs of doing business. Disclosure obligations will be the same whether a franchisor is operating here in British Columbia, in Alberta, in Manitoba, in Ontario, in Prince Edward Island or in New Brunswick.

The legislation contains two key components. First, the act requires franchisors to provide franchisees with all the relevant disclosure information — information that franchisees need to make informed decisions about

[ Page 9497 ]

whether to invest in the business prior to entering the franchise agreement.

Second, the act provides franchisees with legal remedies where the franchisor does not comply with the disclosure obligations, such as not disclosing the information or providing misleading information.

Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island have already enacted franchise legislation closely conforming to the Uniform Franchises Act,

an act developed by the Uniform Law Conference of Canada.

[1545]

Bill 38 is consistent with the legislation in the five other provinces, as I mentioned, and it is consistent with the Uniform Franchises Act. This is important in providing standardization and certainty for franchisors and franchisees alike.

Franchisors support the fact that we’ve developed a bill that closely follows their existing obligations and best practices. One of the greatest values of this legislation is in its uniformity, which streamlines the way that franchisors operate within Canada. With uniformity, a franchisor operating in multiple provinces can prepare the same disclosure package for all of their franchisees.

I’ve laid out the key features of this legislation. I’ve argued that we found the right balance between protecting franchisees while upholding franchisors’ rights to freely contract — a balance that supports good business relationships.

Hon. members don’t need just to take my word for it. We’ve had both franchisors and franchisees talk about their support for Bill 38. For example, John DeHart is a franchisor with Nurse Next Door. John has said this about Bill 38:

“This legislation is great news for our industry and a great move for British Columbia, as it will ensure good business practices are in place for all franchisors. It will make it easier for franchise companies to expand and invest in our province, save us time and money and help create jobs. This legislation will also bring British Columbia’s requirements in line with the other provinces, making us a more competitive place for franchises to invest and strengthen our economy.”

This is what Jackie Johnson, a franchisee with CEFA educational systems, had to say:

“We were very lucky to have bought in to a franchise that shared all the information we needed to feel good about our decision to open a franchise, but we’ve heard that not everyone is so lucky. By giving people buying into a franchise all the information they need to make informed decisions before they sign on the dotted line, you really are setting them up for success. We love our school in Langley and are excited about opening our new locations in Morgan Crossing in South Surrey.”

And I heard they’re opening one in Richmond as well.

“CEFA is a great franchise, and it’s good to know that those who aren’t as lucky as us have more support for their business.”

I’m grateful for the support of these businesses for Bill 38. Businesses are attracted to straightforward regulatory regimes that are encouraged to invest in British Columbia. That is why franchise legislation is good for business in British Columbia. Franchising plays a significant role in our economy, generating significant investment and employment opportunities as well as direct and indirect economic benefits to the community in which it operates. Successful franchisees tend to reinvest and open multiple franchise businesses which generate more jobs and career opportunities for businesses.

I hope that everyone here today joins me in support of Bill 38, which will make a positive, balanced improvement in franchisor and franchisee relations.

Deputy Speaker: The member for Burnaby-Lougheed. I understand, Member, that you’re the designated speaker.

J. Shin: Yes, I am.

Deputy Speaker: Proceed.

J. Shin: I am very happy to rise today on behalf of Burnaby-Lougheed to take my place in the debate for second reading of Bill 38, the Franchises Act.

Small businesses are the backbone of our economy, creating hundreds of thousands of jobs in this province. Legislative protection by their provincial government, such as that proposed in Bill 38, is exactly what our entrepreneurs need, and I welcome the news wholeheartedly.

Now, according to Merriam-Webster’s Dictionary of Law , franchising developed over time as an efficient way to do business, and the origin of the word “franchise” goes back to Anglo-French, meaning freedom and liberty.

I’ll be going on for a long time, by the way.

Indeed, a modern franchise model offers, or is at least assumed to offer, significant advantages, like an existing brand with name recognition and established clientele, as well as a tried and tested operation and structure with help and resources for equipment, suppliers, training, and so on and so forth — all adding to, of course, a significantly lowered barrier for any entry-level entrepreneur and, hence, more freedom and liberty, in its intended spirit, like root of its name suggests.

Of course, a quick reference to Wikipedia has, “For the franchisor, the franchise is an alternative to building chain stores to distribute goods and services that avoids the investment and liability,” that would come, typically, with a chain store model, shifting much of the risk and evening it out to the franchisee.

[1550]

The franchisee is said to have a much greater incentive than a direct employee because he or she has a direct stake in the business.

Essentially, and in terms of distribution, the franchisor is a supplier who allows the operator or the franchisee to use the supplier’s trademark and distribute the suppliers’ goods, and of course, in return, the operator would pay the supplier a fee.

There are three main fees, typically. To be more precise, the first one would be a royalty for the trademark,

[ Page 9498 ]

the second one being the reimbursement for the training and the advisory services that are provided to the franchisee, and the third one being a percentage of the individual business unit sales. That will be an ongoing fee.

These three fees may be combined in a single management fee, and a fee for disclosure is actually separate and is always a front-end fee, which tends to be a much larger sum. These franchise fees are on average 6.7 percent, with an additional average marketing fee of 2 percent. These are obviously no small costs, of course.

Thirty-three countries, but not including Canada, have laws that explicitly regulate franchising on a federal level, with the majority of all other countries having some laws which have a direct — or indirect, at least — impact on franchising.

Before I further comment on this bill before us…. I understand that I have ample time to speak on this bill, as the designated speaker. I think it would be worthwhile for us to consider the history of franchises here for a little bit, if the members would please entertain me.

The FranChoice group narrates this the best, so I’ll share that with the House. Franchises, in their earlier forms during the Middle Ages, were local titled landowners who would grant the rights to the peasants or serfs for consideration to hunt, hold markets or fairs or otherwise do business in their domain. With the rights, of course, eventually came the need for rules, and those rules went on to become part what’s now known as the European common law.

It turns out that in North America, Isaac M. Singer, the famous American investor and founder behind the Singer sewing machine company, is commonly credited for starting the modern use of franchising. The things that you learn on this job. During the 1850s, Singer, who had improved on the existing sewing machine model, wanted to find a wider distribution for his products, but he lacked the money to increase manufacturing.

Another problem for him was that people wouldn’t buy his machines without having the training for it, which the service retailers weren’t necessarily able to provide. Singer’s solution was to charge licensing fees to people who would own the rights to sell his machines in certain geographical areas, which would then be the funds that he needed as the venture capital for his manufacturing. These licensees became responsible for teaching people how to use his machines, which eventually created opportunities to bring the first commercially-successful sewing machine to the world.

Franchising, starting from that, was employed on a limited basis after the success of the Singer sewing machine distribution method. Ultimately, this really is the franchising model. The licensing of a brand name, trademarks and, of course, the entire business concept is the dominant mode of franchising, as we know it today.

There was an overwhelming need for all types of services and products after World War II and the subsequent baby boom, so franchising was the main and the popular method to provide a way for businesses to quickly grow and expand. So the widespread success of giants like Coca-Cola, Western Union…. By agreements between the automobile manufacturers and the dealers, the dealership concept soon followed.

I believe that many members in this House might have heard the story of Ray Kroc, who was the milkshake mixer salesman who discovered the McDonald brothers’ small hamburger stand in San Bernardino in California in 1954 and who is considered to have unleashed the wave of franchising that we know today.

He found that the McDonald brothers were buying so many of his milkshake mixers because they had developed a high-volume production system which enabled them to provide fast service with consistent results and, of course, at lowered costs. Kroc became their licensing agent for the fast-food concept and recruited many more franchisees, starting right from the Chicago area.

[1555]

Merely seven years later, by 1961, Kroc had bought out the McDonald brothers’ interests and took the title as the senior chairman. In two more decades after that, by 1988, McDonald’s had opened its 10,000th restaurant. Today there are over 30,000 McDonald’s restaurants worldwide as a globally recognized brand that are actually run by small business owners.

It goes without saying that the economic impact of franchise business run by small business owners and their parent companies is gigantic. In the U.S. — they’re the leader in franchising — this business model apparently accounts for almost half of all American retail sales.

Since the 1930s, the U.S. used this approach for fast-food restaurants and, slightly later, for motels at the time — after the great depression. As of 2005, there were 909,253 established franchise businesses generating $880.9 billion — and that’s not a million — of output, accounting for 8.1 percent of all private, non-farm jobs. This amounts, south of our border, to 11 million jobs for them and 4.4 percent of all private sector output.

The impact is not any less significant for us here in Canada. There are 78,000 franchised outlets with $100 billion in gross sales, or 5.5 percent of all of our GDP. This sector employs roughly 1.5 million Canadians.

Estimates by the Canadian Franchise Association suggest that B.C. has more than our fair share: roughly 10,000 franchise outlets with $14 billion in sales and 180,000 employees, crossing more than 40 different sectors of our economy — including retail, hospitality, automotive, health care — accounting for one out of every five consumer dollars spent in Canada on goods and services.

At the beginning of 2013, the Canadian Franchise Association identified six sectors of franchises that have grown significantly over the past five years.

Over that period, business consultants, services and training saw an increase for the demands for their ser-

[ Page 9499 ]

vices, in franchise listings, by 211 percent — followed by the hair and nail salons and spas at 188 percent; seniors and homecare and services at 121 percent; food, restaurant and dining rooms at 88 percent increase; home-based business at 83 percent increase; and health and fitness at 82 percent increase.

With the diversified local economy that we have in B.C., a sophisticated consumer culture and close proximity to the United States, Canada is the natural first destination for a lot of the U.S. franchise companies seeking to expand internationally and a preferred entry point, of course, for foreign franchisers, investors and immigrants seeking to enter the North American market.

Some of the biggest and the most well-known franchises among us now include Subway, 7-Eleven, Hampton Inn and Suites, Great Clips, H&R Block and, of course, the oh-so-famous Tim Hortons. But as the number of franchise businesses grew, so did the need for the legislation and the consumer protection which inevitably followed.

The International Franchise Association, IFA, was founded in 1960 as a membership organization of franchisors, franchisees and suppliers with the purpose of providing help and guidance to the entire industry. As significant as were the advantages of a franchise business for the franchisees, just as crippling were the disadvantages that often came with them, especially in the absence of legislative measures. And of course, much vulnerability continued to exist, from scams and frauds, without regulatory reinforcements.

[R. Lee in the chair.]

I would like to go over some key areas of concern for the franchisees entering into a franchise contract with their parent company. Firstly: “Franchising is one of the only means available to access venture capital” without having to give up the control of the operation of a chain and build a distribution system for servicing it.

[1600]

After the brand and formula are carefully designed and properly executed, franchisors are able to sell franchises and expand rapidly across countries and continents using the capital and resources of franchisees, while reducing their own financial risk. Of course, the more successful the franchise is, generally the more expensive it is to buy in, requiring hundreds of thousands of dollars for the start-up fee — with or without the revenue guarantee, of course.

Additionally, “although franchisor revenues and profit may be listed in a FDD,” which stands for franchise disclosure document, “no laws require an estimate of franchisee profitability,” which depends on how intensively the franchisee must have worked. Therefore, franchisor fees are typically based on “gross revenue from sales” and not necessarily on the actual profit that’s realized, taking in the franchisee’s labour that has been invested.

The sellers of franchise businesses, the franchisors, themselves, in view of our province’s apparent regulatory void that was for a while, appear to have had little or no obligation to disclose negative system unit performance statistics to the new buyers of the franchise business, who would then unknowingly purchase franchises that have demonstrated low or no profitability and even high failure rates of the founding franchisees.

These are binding and generally non-negotiated franchise agreements that we are talking about here against many unassuming and usually first-time business owners, or those from immigrant communities with language barriers, who enter and get locked into unfair dealings. All this means, really, is that the greatest risk of the business in the franchise concept is significantly shifted to the franchisees, who are also at the mercy of their parent company for stipulations that surround ongoing rates for sales commissions and advertising.

Of course, there is a second point. I will quote this as well: “A franchise usually lasts for a fixed time period — broken down into shorter periods, which require renewal — and serves a specific territory or geographical area surrounding its location.” They say that the agreements typically last five years — some very rarely maybe up to a period of 30 years — and they’re renewable at the sole option of the franchisor. Premature cancellations or terminations of contracts, as you would imagine, were not uncommon and would, without a doubt, bear serious consequences for the franchisees.

The location and the number of franchises in the vicinity are also in the hands of the franchisor, which may also work against the existing businesses.

As such, in reality, a franchise is merely a temporary business investment involving renting or leasing an opportunity. It’s not a purchase of the business for the purpose of ownership. It’s actually even classified by some as a wasting asset because of the finite term of its licence.

The third part. Because the franchises are all run the same way by the parent company, the individual franchisees would not have the same kind of flexibility as to how they would like to run their business, responding to their local clientele. These are typically the freedoms that you can exercise as an independent business owner.

What that would mean is that, with all good intentions sometimes, the franchisees are often held to very severe penalties or even have their licences revoked if they intentionally or unintentionally fall short of the established protocols and expectations of the operation. It is noted that, actually, across the country the franchisor rules imposed by the franchising authority on the franchisees are increasingly strict. Some franchisors are using even the most minor rule violations to terminate contracts and cease a franchise without any reimbursement. Those are the heartbreaking stories that we’ve heard over and over.

The fourth part. The industry also ranges greatly and without adequate accountability for the promise and the

[ Page 9500 ]

actual delivery of franchisee support for training and setup. Often the training period, the cost of which is actually in great

part covered in the initial fee, is too short in cases where it’s necessary to operate, say, complicated equipment. The franchisee has to learn on their own from the instruction manuals.

[1605]

The fifth point. The statistics, in fact, do show that the failure rates are actually higher for franchise businesses than independent business start-ups. I was very surprised to see that. It makes it that much more important for today’s franchise seekers to be aware of that fact, because not all franchise businesses are turnkey operations with promised clientele and revenue.

All in all, franchise agreements are huge, cumbersome files in complex legal language, written unilaterally in favour of the franchisor by the franchisor. Naturally, it would bear minimal legal protection and rights, if any at all, for the franchisee. The franchise agreements carry no guarantees, no warranties, and the franchisee has little or no recourse for legal intervention in the event of a dispute.

The franchisor would be almost always protected from lawsuits from their franchisees because of the non-negotiable contracts that the franchisees are required to acknowledge — in effect, that they’re buying the franchise knowing that there is risk and that they have not been promised success or profits by the franchisor. Most franchisors require franchisees to sign agreements that mandate where and under what law any disputes would be litigated. It’s sometimes not so much about the new buyers of franchises doing their due diligence, but it’s about actually being considerably business- and legal-savvy.

Also, communication with the current and ex-franchisees for getting references is greatly hindered. It should be noted that the current and ex-franchisees of systems have no duty under any law to disclose information about their businesses or their experience to the prospective franchisees either. In fact, many are muzzled by their contract with the franchisor to speak out, even if they wanted to.

On top of that, franchisors that practise franchise fraud have and can attempt to pressure franchisees leaving the franchise system to sign a non-disclosure agreement, a confidentiality agreement or, in a sense, a gag order. The gag order allows franchise misrepresentation by preventing prospective new franchisees from learning the important, and especially the negative, details about the enterprise.

In 2007, the Franchise Rule in the U.S…. In the Federal Register , comments from the former franchisees were listed concerning the confidentiality agreements, or the gag order. I believe they’re well worthwhile for us to have it read into the record here in the Legislature, as much of that also echoes the sentiments that our local franchisees have shared with my colleagues and I over the years, in confidence.

“Commenters complained that the use of confidentiality clauses is widespread, and several commenters urged the commission to ban the use of confidentiality clauses as a deceptive or unfair trade practice. Other opponents of confidentiality clauses, including state regulators and some franchisors, asserted that such provisions inhibit prospective franchisees from learning the truth” as they try to conduct their due diligence investigation of a franchise offer.”

Here’s another one. “One franchise representative contended that the harm flowing from the confidentiality provision goes beyond individual franchise sales, noting that such provisions intimidate franchisees into not testifying before legislative committees and public agencies such as the Federal Trade Commission.”

Here is another one. “The gag order…prohibits me from being able to answer questions and give cautionary remarks to other people who may be considering the franchise that I was with…. The use of gag orders is almost 100 percent in some franchise systems.”

Yet another one.

“Three franchisees…believed that they were kept in the dark about the failure of their franchisor’s system due to confidentiality clauses imposed on the current and the former franchisees. Confidentiality clauses typically release the franchisor from legal liability and bar the franchisee…from making any oral or written statements about the franchise system or their experience with the franchise business. The purpose of such clauses is to shut down any negative public comment about the franchise system.”

[1610]

Here’s one last one, franchise-related:

“I had spoken to some of the franchisees that had left the system. I now feel certain that they painted a picture that was not even close to being the truth, based on the gag order that the franchisor imposed. Had I gotten the truth from these people, my decision certainly would have been different. Every franchisee leaving the system has had a gag order placed on them, making it impossible for the current and the future franchisees to get the facts they need.”

All this boils down to the fact that beyond the standards of ethical business practice and negotiations in good faith that one would expect, when there is such an obvious long-standing regulatory void, we’ve failed to protect the small businesses in our province, for the longest time, from a series of fraud and unfair dealings that happened and devastated many franchisees and their families financially and emotionally. It wasn’t too long ago. I think that it was back in spring.

For example, how can we ever undo the stories like a particular franchisee who actually came into my office? I met with them not once — at least three times. He was forced to remain anonymous, but he was compelled to share his story. Because of the fraud that he had faced with this franchise business, his marriage fell apart. From the incredible financial distress of having lost all his savings in the franchise business, he was left without any income. He was driven to feeling absolutely hopeless, and he attempted suicide on a number of occasions.

These are the stories. I really urge the House…. I’m sure all the members feel the same way. It’s that we, as legislators, try our level best to promptly be responsive so

[ Page 9501 ]

that such stories that could have been prevented — or at least minimized by a regulatory introduction or improvement; we could have perhaps had it in B.C. even as far back as 2010, when Manitoba did it, for example — will happen no more.

It’s certainly eight months too late for this particular case of the gentleman that I just described. I was able to provide very little relief for his ordeal other than to just reassure him that I’ll be advocating as hard as I can for legislation like Bill 38 that we have today. A regulatory void would have continued to have claimed many more victims, had it not been the case that the government decided to act on this, this session. It’s been long decades overdue.

I do want to highlight the fact that we have been long overdue on this side of the border compared to our U.S. counterpart. The International Franchise Association adopted a code of ethics to establish a framework for the implementation of best practices in the franchise relationship of IFA members.

The code represents the ideals to which all IFA members agree to subscribe in their franchise relationships. Of course, IFA works closely with government and commissions on improving how their industry relates to the franchisees, and they have been an integral part to the expansion of franchising around the world actually.

All this was shaping up in the ’60s and the ’70s. It was in 1978, almost four decades ago, that the U.S. Federal Trade Commission enacted a law requiring all franchisors to submit to all potential franchisees a document called a franchise disclosure document, FDD, prior to receiving the money. The FDD provides detailed inform