First Session, 43rd Parliament

Official Report

of Debates

( Hansard )

Thursday, April 10, 2025

Afternoon Sitting

Issue No. 40

The Honourable Raj Chouhan , Speaker

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

Contents

Routine Business

Introduction and First Reading of Bills

Bill M211 — Zero-Emission Vehicles Repeal Act

Hon Chan

Orders of the Day

Committee of Supply

Estimates: Ministry of Energy and Climate Solutions

Hon. Adrian Dix

David Williams

Pete Davis

Larry Neufeld

Trevor Halford

Claire Rattée

Ward Stamer

Statements

Clarification of Motion to Adjourn the House

Hon. Mike Farnworth

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Forests (continued)

Hon. Ravi Parmar

Macklin McCall

Ward Stamer

Estimates: Ministry of Mining and Critical Minerals

Hon. Jagrup Brar

Pete Davis

Sheldon Clare

Gavin Dew

Thursday, April 10, 2025

The House met at 1:01 p.m.

[The Speaker in the chair.]

Routine Business

Introduction and

First Reading of Bills

Bill M211 — Zero-Emission Vehicles

Repeal Act

Hon Chan presented a bill intituled Zero-Emission Vehicles Repeal Act.

Hon Chan : I move that the bill, the Zero-Emission Vehicles Repeal Act, of which notice has

been given in my name on the order paper, be introduced and read a first time now.

British Columbians have been told that zero-emission vehicles are the only path forward,

but we need to be honest about the challenges.

This bill is not about opposing EVs. In fact, I am a proud EV owner. I have driven

multiple EVs for almost a decade. That’s precisely why I know EVs are not for everybody.

B.C. Hydro has already warned of the looming electricity shortage. With increasing

demand from EVs, heat pumps and new housing, our grid is being pushed to its limit.

If we do not have the power, how do we meet our clean energy goals?

In rural and northern B.C., EVs just aren’t for everyone. Harsh terrain, cold winters,

long-distance travel all impact range and reliability. Add to that the lack of repair

shops and replacement parts, and the anxiety becomes real.

We also need to respect consumer choice. Surveys show that British Columbians are

worried about the high upfront cost, battery life, range, resale value and inadequate

infrastructure. And now, with the end of the federal EV rebate, sales are expected

to drop.

Let’s not forget the charging challenges. Rural areas remain underserved. In cities,

many residents in stratas or older buildings have no access to home charging. Some

public chargers even charge a premium for electricity, sometimes more expensive than

getting gas.

I am pleased to introduce this bill today to amend the Zero-Emission Vehicles Act.

This bill will eliminate the mandate that all vehicles sold in B.C. must be zero-emission

by 2035. This repeal will allow consumers to choose whether they would like to opt

for a BEV, PHEV, FCEV, hybrid or even an ICE. It’s their choice.

The Speaker : Members, the question is first reading of the bill.

Motion approved.

Hon Chan : I move that the bill be placed on the orders of the day for second reading at the

next seating of the House after today.

Motion approved.

Orders of the Day

Hon. Ravi Parmar : In this House, we call estimates for the Ministry of Energy and Climate Solutions.

In the Douglas Fir Room, we call continued estimates for the Ministry of Forests,

followed by the Ministry of Mining and Critical Minerals.

[1:05 p.m.]

The House in Committee,

Section B.

The committee met at 1:06 p.m.

[Mable Elmore in the chair.]

Committee of Supply

Estimates: Ministry of

Energy and Climate Solutions

The Chair : I’m calling the committee to order, and I recognize the Minister of Energy and Climate

Solutions to move the motion.

On Vote 23: ministry operations, $90,831,000.

The Chair : Do you have any opening remarks?

Hon. Adrian Dix : I just wanted to…. As someone who truly enjoys the estimates process, it’s kind of,

as I was saying earlier, like a combination of B.C. Day and Christmas Day for me.

It’s going to be fun. I’m looking forward to engaging with hon. members. I think it

can be really positive for all sides.

I just want to introduce the Deputy Minister of Energy and Climate Solutions, Peter

Pokorny, who’s to my right. To my left, Ranbir Parmar, the chief financial officer

and assistant deputy minister. Behind me, Chris O’Riley, the president and CEO of

B.C. Hydro.

Also behind me, Les MacLaren. There’s a special spot for Les in the public service

hall of fame. You do have to wait five years after retirement to be in the hall of

fame, but Les will be there. He’s a first-ballot hall of famer, and he’s the associate

deputy minister and special adviser to the Ministry of Energy.

With that, I’m happy to take questions from the hon. members.

David Williams : Before we begin, I’d like to acknowledge the Minister of Energy and Climate Solutions

and his staff for their work in preparing for today. We appreciate the effort that

has gone into this process.

We believe that energy and climate solutions are foundational to sustainable growth

and a resilient economy. The most successful economies are built on access to affordable,

reliable energy — energy that drives innovation and productivity while supporting

long-term self-reliance. Our team is composed of critics responsible for the relevant

departments, and we are here to engage constructively in that capacity.

And with that, I’ll pass it over to my colleague.

Pete Davis : I’m looking forward, actually, to having some constructive conversation with the

minister on my critic role of the Columbia River treaty. Of course, just on the record,

we all know that this was actually paused, as of March 11, due to some escalating

trade tensions. And we all know that there are some issues going on with cross-border

talks.

With that, my first question is: with the U.S. pausing Columbia River treaty negotiations,

can the minister confirm if the prior standards for agreements will stay in place

with the pause?

Hon. Adrian Dix : I just want to say a few things in an introductory way.

The member will know that the Columbia River treaty dates from the 1960s, that it

really involves Canada, of course. British Columbia is the lead party in the negotiation,

but they’re Canada’s negotiation. It’s an international treaty, after all.

The entity which is often referred to in the Columbia River treaty is B.C. Hydro.

It’s had an enormous impact, both positive and in challenging ways, for the member’s

region.

[1:10 p.m.]

I think when we talk about its benefits to Canada and the United States, we have to

acknowledge the very strong feelings that people in the Columbia Basin, people in

the region, feel about the Columbia River treaty, which is profound. The treaty is

still in place, still in existence. It can only be abrogated by either side with ten

years notice.

First Nations and communities started to engage with the United States on the renewal

of the Columbia River treaty, the modernization of that treaty. Those negotiations

started under the first Trump administration and then, obviously, under the Biden

administration, and now we’re back in a renewed administration led by President Trump.

Some of what we see…. So there were very significant negotiations between the parties.

In July of last year, an agreement-in-principle was achieved between the parties.

At the table, of course, for Canada, as I say, were Canada and British Columbia and

First Nations as observers but part of every negotiation, which I think is really

profound and exciting and has greatly contributed to the negotiation. An agreement-in-principle

was put in place for a renewed treaty, and from that, one negotiates the detailed

treaty language.

As the member will know, there are different ratification processes. First, you have

to negotiate the detailed treaty, and that process has been going on since the agreement-in-principle.

There are interim arrangements around those treaties, and those have been agreed to

— for example, on the value of the downstream benefits to Canada and to British Columbia.

Those interim arrangements have been put in place as we continue to negotiate a final

treaty.

Very significant efforts were made, including in December of 2024, led in part by

Mr. MacLaren and by our outstanding team. People will know, in the Kootenays, Kathy

Eichenberger, who’s just an outstanding person and is connected to the region and

has really involved the region in the negotiations in a way that I think is unique

and extraordinary. For everyone in the region, across political lines and other lines,

her work is recognized. We made a very significant effort to finalize treaty arrangements.

On the Canadian side, the treaty requires the support of British Columbia, but obviously,

a decision of cabinet. In the United States, of course, international treaties, if

they’re being…. They each require the advice and consent of the U.S. Senate — indeed,

two-thirds of the U.S. Senate.

In the interregnum between the election of Mr. Trump and the new President and the

election of a new Congress and the new Congress taking shape, efforts were made to

make progress on the language, and in fact, progress was made on the language. But

no final treaty happened or was likely to happen with what they sometimes call a lame-duck

Congress. It would be like after an election where the government changes sides, negotiating

a treaty in those times. It wouldn’t make sense.

So Mr. Trump has taken office and negotiations have been paused. I’d say two things

about that to the hon. member in terms of the pause in the negotiations.

It’s not atypical that that would take place. For example, when President Biden took

office in January of 2021, the negotiations didn’t resume until the fall of that year.

There was a gap, a new administration in place. Perhaps the Columbia River treaty,

while singularly important to us, isn’t necessarily the first item dealt with, with

a new State Department in the United States.

What’s different this time, of course, have been the comments and the actions of the

United States government towards Canada, towards British Columbia, in that time, some

of the comments of the President of the United States about Canadian water, and so

on and so forth, which give this a different tenor.

What we’re going to continue to do is negotiate and work and strive to see that the

agreement-in-principle, which I think has broad support in the region and broad support

in B.C. and broad support across party lines, is the basis for a final treaty that

we ratify together. We can only control what we can control, which is to be Team Canada,

to be together and look at the interests involved on our side, and that’s what we’re

trying to do.

With respect to the United States, I think people will know my view on their conduct

and the nature of these discussions and the idea of diverting Canadian resources to

California, which has been expressed by the President, and the other comments. All

of that is their thing. We have to be strong, united and determined to transform what

we agree to, together with our American friends, into a final treaty.

That’s where we are today.

[1:15 p.m.]

Pete Davis : Thank you, Minister.

Since he said that the negotiations are paused — and that was a very good answer,

lots of information there — can the minister also table maybe what the offer was prior

to the pause?

What I’m saying is: what’s within that agreement-in-principle? Can you elaborate on

that a bit more?

Hon. Adrian Dix : Just to summarize…. I really appreciate the members also, and they can always get

briefings from us on that. He’s taken briefings, so we’ve taken him through some of

these things, but it’s also important, I understand, to get them on the record. So

I appreciate that debate.

The agreement-in-principle was approved by the government of British Columbia and

then signed by the corresponding parties in July, but it was agreed to in June. It

included coordinated power operations and upgrading those in corresponding fixed amounts

of the Canadian entitlement. The member may have questions about that in a moment,

which I’m happy to respond to. This is a related payment to electricity as well as

annual indexed U.S. payments for flood risk management operations and additional benefits

to the United States.

The province also benefits from non-financial initiatives related to Indigenous cultural

values, ecosystem enhancement, socioeconomic objectives and greater domestic flexibility

for our ability to manage our hydroelectric dams. That is the core of the agreement-in-principle.

Some of the basic issues that are fundamental: namely, the money and the overall management

system on both sides of the border. Then what people in the region and what First

Nations wanted as well in the agreement was more flexibility on the Canadian side

for the life and the central importance to the region of the river and the river basin

to residents of the region, including First Nations but not limited to First Nations.

This was really the region that drove these negotiations, and I think our negotiating

team did an excellent job in both consistently working with the regions and the different

elements of the region — different regional districts, different municipalities, different

citizens of the region, of course the Columbia Basin Trust and Columbia Power and

then the Sylix, the Ktunaxa, the Secwépemc First Nations as well.

Pete Davis : You did mention that the renegotiation has been going on for quite a few years. We’ve

heard that prior in the pause, B.C. was willing to take an agreement to terms that

would have seen the drawdown in water storage in B.C. and less money as well.

Can the minister confirm that this was the case, and if yes, what were we going to

get out of this negotiation if we’re just drawing everything down and getting less?

And why would this government even consider such terms if it’s not beneficial to us

in British Columbia?

Hon. Adrian Dix : The reason the government supported Canada…. Of course, the agreement is ultimately

between Canada and the United States, and understand that B.C. has a special role

in this treaty that maybe no other province has in treaties, although there is provincial

agreement-in-principle, which also had interim arrangements around these questions

of benefits to British Columbia.

The main monetary benefit we’ve been receiving from the treaty is the Canadian entitlement

to downstream power benefits, which is in the form of power delivered by the United

States to the border. We sometimes refer to it as the delivery to Blaine, but it’s

to the border. In other words, power that, in B.C.’s system, Powerex is able to sell

in the United States or take back as based on the needs of British Columbia and the

wants of British Columbia.

The entitlement is based on calculations that are set out in the treaty, so it’s calculation

— people talk about drawing it down — that looks at the capability of the U.S. power

system with and without the flow regulation provided by the B.C. treaty reservoirs.

The amount of Canadian entitlement has always been projected to decline over time,

and, indeed, it has as demand grows in the U.S. Pacific Northwest and new generation

is added. So the contribution of Canadian flow regulations is reduced.

[1:20 p.m.]

Over the past seven years, the entitlement revenues have averaged $264 million. Our

forecast for the fiscal year just ended is $295 million. You can add to this the $37 million, I think it is, with higher revenues coming in the next three years.

Our negotiators had a mandate to secure benefits at least as what would have been

received under the current scenario, and they achieved that mandate. In other words,

they met the requirements in the negotiations.

During negotiations, the U.S., of course, sought, as you do in negotiations, to introduce

new assumptions to the entitlement calculations that would have accelerated the decline

of the entitlement. The result from the MOU from last July is a reduction in the amount

of power benefits over the short term and an increase in the power benefits over the

longer term. In other words, a levelling out in consistency of benefits that was beneficial

to British Columbia.

Our assessment of the value of the entitlement, along with the new annual payments

for flood risk management and other benefits, met the test of being better than the

treaty continuing in its present form, and that’s, of course, the reason we signed

it.

Additional benefits in the MOU that met Columbia Basin communities’ and First Nations’

interests include — I talked about this before — the ability for B.C. to unilaterally

change operations for B.C. for environmental, Indigenous cultural values and socioeconomic

objectives; a new bilat national group led by First Nations to advise on the operations,

with a one-river focus and adaptive management; and a new working group to address

issues on the Kootenay River and the Koocanusa Lake reservoir.

Obviously, these parts of the agreements, the financial parts of the agreements, are

now in place by interim arrangement between Canada and the United States and British

Columbia. They’re in place, and I think our negotiators, on our behalf, did a very

good job of ensuring that we have full value, going forward 20 years. Those arrangements

around the downstream benefits are in place through to 2044.

Pete Davis : I think the thing we’re concerned about here is that our entitlement to the downstream

power benefits is set to drop from 1,140 megawatts to under 660 megawatts next year.

This is a nearly 50 percent reduction, and it appears that our province is giving

up a significant long-term energy asset with no clear gain in return.

Can you explain how the massive reduction supports our energy security and independence,

particularly at a time when British Columbians are facing rising energy costs and

your government is pushing aggressively for climate policies that rely heavily on

electricity?

Hon. Adrian Dix : The member’s assumptions are just incorrect. We looked at what we receive over the

next 20-year term, and this is as good as we would expect under the present arrangement.

We negotiated and signed off on the agreement-in-principle and the interim arrangements

on that basis. So the member’s assumptions are simply not correct.

It’s fair that he asked the question, because I think a lot of people would ask these

questions about it. So I’m not criticizing the question. I’m saying that’s what our

negotiators looked at: what would we expect to see under the present arrangements,

and can we maintain that over the next 20 years. And we achieved that goal.

Pete Davis : British Columbia’s farmers and ranchers are already struggling with high costs, unpredictable

weather and labour shortages. Water from the Columbia River is essential to their

success.

Can the minister confirm that this treaty protects their irrigation rights long into

the future and that the water needs of producers will never be secondary to the goals

of American navigation or the hydroelectricity?

Hon. Adrian Dix : Draws for domestic use are fully allowed under the treaty.

Pete Davis : The Columbia River isn’t just about water and wildlife. It’s also a vital economic

corridor that supports jobs, industries and trade across our region.

[1:25 p.m.]

With $22 billion in trade and 40,000 jobs linked to this waterway, has your ministry

done a serious economic impact assessment of how the treaty change would affect rural

jobs, transportation and industry in British Columbia? Are we risking long-term economic

damage just to appease the U.S. negotiators?

Hon. Adrian Dix : No, it’s quite the contrary. What we have done is negotiate a treaty that maintains

Canadian rights over the treaty, which is important for British Columbia and for Canada.

We’ve enhanced local control over the very circumstance the member is talking about.

I would say…. This one’s something in my life I’m very proud of, which is the creation

of the Columbia Basin Trust out of the original discussion of the downstream benefits

in the 1990s. This has made a profound impact. The Columbia Basin Trust is so central

to the life of the community, we forget that it only started in the 1990s, and it

has profound impact, investing in communities, in economic growth and in energy security

through its relationship with the Columbia Power Corp.

The purpose of the negotiation wasn’t to give away authority, but it was to give more

control and flexibility to the entity, which is B.C. Hydro, and also to local communities.

That’s why they were so involved in developing our negotiating position. That’s why

First Nations, for example, were fully representatives and observers at the table

for all the negotiations.

Pete Davis : Many British Columbians care deeply about provincial rights and local control. I

mean, this is something that people are actually quite worried about.

Can you tell us what guarantees are in place to ensure that British Columbia, not

Ottawa and certainly not Washington, maintains full decision-making power over its

water and energy resources? Are there enforceable legal protections in place in this

treaty that make sure we don’t get overridden in the future?

The Chair : Member, just a reminder for all questions and answers through the Chair.

Hon. Adrian Dix : Yeah, I mean, that’s the purpose. When you think back on the moment of history that

is the Columbia River Treaty, which so affected our lives and affected the lives of

the people in the member’s region, but the people in B.C.… It was a singular achievement

of a Premier of British Columbia, whose vision was what? He nationalized B.C. Electric.

It’s something of the discussion we’re going to have about B.C. Hydro: what a huge

advantage it is in B.C. to have a 100 percent publicly owned company in electricity

in our province and the difference that it made.

In those negotiations in the 1960s, B.C. Hydro is the operating entity here in British

Columbia, controlled and owned by British Columbians. So in the treaty itself, by

definition, not Canada but British Columbia is the operating entity for the treaty.

It was a unique achievement that’s been continued over time as we’ve worked through

the discussion in the 1990s of the downstream benefits and are working through this

discussion.

British Columbia is central to that, central to the detailed negotiation, to putting

forward the Canadian position, because that’s established in the treaty itself. It

is a great achievement of someone who’s now part of historic memory but was a significant

figure in our province: W.A.C. Bennett and his government. Obviously, all of us are

the beneficiaries of that legacy.

Pete Davis : Through the Chair to the minister, how will British Columbians know if this treaty

is delivering on its promises? Will there be an independent, transparent body monitoring

its implementation? And will there be regular public reporting so taxpayers and communities

can see whether this agreement is actually working for us or just working for the

neighbours to the south?

Hon. Adrian Dix : Well, I think you can get a sense of that through the approach we’ve taken so far.

I believe the member was part of these calls, so he’ll know about it.

For example, in this stage of the negotiations, I personally reported to the people

of the Kootenays in March at a telephone town hall or a video town hall and, again,

prior to that, in December. The participation in those things was extraordinary. In

December, I think it was close to 500, just before Christmas. It gives you a sense

of the interest in the community — 600 at our most recent session with people in the

community.

We have regular community meetings. When we make progress, we’re going to go community

by community, briefing the communities on what’s in the treaty. We have enormous ongoing

involvement of people in the communities around this treaty and, of course, the creation

of entities.

[1:30 p.m.]

The Columbia Basin Trust is not a subject of the treaty but is, obviously, a significant

part of it and one whose achievements I’m personally very proud of.

There are, because of the central role, almost visceral feelings of people in the

Kootenays, from those who lost their land when flooding occurred and everyone else,

to this treaty and what it means. There is, I think, an extraordinary level of engagement

by the community and the engagement of our negotiators. It’s very rare you have negotiators

who are on a first-name basis with just about everybody on a 600-person conference

call. That’s an indication of our approach.

This is an established treaty. It has been in place since the 1960s. We know what

we can do with it. We’re trying to do some more because of the advocacy of local communities.

We believe that the agreement-in-principle that we’ve put together and negotiated

with the United States is good for them.

By the way, it’s good for the United States as well, as it should be, right? You don’t

succeed in these processes — it’s important to remember this right now, when the United

States is engaging in tactics with Canada and other countries in the world — by it

not being supported in the United States as well, which received significant benefits

in the 1960s and since from the value of the treaty. They’re able to pay us that average

of $264 million a year because of the value of what the treaty brings to them.

I also want to acknowledge that, notwithstanding the administration’s position, senior

senators of both parties, including the chair of the Senate Foreign Relations Committee

in the United States, are supportive of the treaty and the agreement-in-principle

and are supportive of going forward. It has bipartisan support in Canada. It has bipartisan

support in the United States.

We’ve just got to hold true to what the communities, what the Kootenays, what First

Nations people and what our teams put in place and ensure that the agreement-in-principle

is reflected in final treaty language, because this will be, hopefully, when it passes,

an achievement on both sides of the border.

Pete Davis : My question to the minister….

We have an agreement-in-principle. What is your plan B if the government in the States

decides that they want to terminate this treaty? What’s your plan B?

Hon. Adrian Dix : The current treaty remains in effect, and we have interim arrangements that are consistent

with the current treaty that are in effect.

Should one party of the treaty…. Sometimes I hear this; maybe the hon. member does

as well. I was telling the people on the conference call with the Columbia Basin that

people come up to me in Safeway and say: “Boy, we’ve got to turn off the water, break

up the treaty or do something to the United States on this issue.” But if the United

States government or our government wants to end the treaty, they would require ten

years’ notice.

I’ll just note that ten years’ notice is a number of presidential elections, a number

of provincial elections and a number of federal elections, if the ordinary pattern

of those elections is in place. So our default, if you will, in this matter is that

the treaty remains in place. This is an improvement, we believe, for both sides, but

particularly for the people of the Columbia Basin. We are ready to go tomorrow, the

next day, Sunday, at any time to re-engage with the United States government on this

point.

If the United States government were to give ten years’ notice, obviously, we would

continue to operate the treaty as it currently exists with the interim arrangements.

We’d obviously, as well, be considering other options, but we’d have ten years together,

all of us, to do so, and a number of governments would be involved in that process.

I don’t believe that that will happen, because the Columbia River treaty is in the

best interests of Canada, of British Columbia, of the Columbia Basin, of First Nations

and of the United States.

[1:35 p.m.]

Pete Davis : What you’re essentially saying is that if it were not renewed or they decided to

terminate, they’d have to give you ten years’ notice. Tell me the benefits of renewing

this and not just leaving it the way it is right now.

Hon. Adrian Dix : Both sides in the discussion felt that a treaty that was negotiated in the 1960s

should be modernized. I think it makes sense. Things have changed since the 1960s.

People in the region wanted more control. First Nations had interests there. We wanted

more flexibility in managing our side of the treaty so that we could provide better

circumstances for the human and natural environment in the region.

Those were our main priorities in the renegotiation of the treaty: to ensure that

it met modern circumstances. Things are different now than they were in 1961, and

so on, in 1964.

Both sides had interests at the table. Ours were long-standing concerns in the region

around control, flood management and other issues. They had their own set of issues,

and we came to an agreement on those arrangements to modernize the treaty — put it

in place for the next 60 years, or at least the next long period, we would hope.

The member is quite right. We can continue to operate under the existing treaty. How

do we know that? We have been operating under the existing treaty. But I think trying

to improve a treaty in the interests of both sides makes a lot of sense, and that’s

what we’ve done here. I think that the circumstances by which either side would give

ten years’ notice aren’t justified. The treaty continues to benefit both sides.

We think we can make it benefit both sides more. That’s why the renegotiation occurred,

under multiple provincial governments and multiple U.S. administrations and has now

arrived as an agreement-in-principle. We can’t, of course, make the U.S. Senate and

the U.S. administration sign off on anything, but we are going to hold close and strong

to our position on that. If it’s the case that they don’t proceed or don’t come back

to the table, then obviously, the current treaty arrangements will hold.

Pete Davis : I’d like to pass it on to my colleague for Peace River South.

Larry Neufeld : Thank you to my colleague for this opportunity to ask a single question.

With respect to the treaty, I’d like to understand the rationale of keeping the renegotiation

within the province, as opposed to utilizing the International Joint Commission or

a similar methodology that is used by other provinces.

an international treaty, under our constitution — and led by, essentially, the U.S.

State Department on behalf of the U.S. federal government, not by the state of Washington,

in this case, although obviously it greatly affects the state of Washington and other

U.S. states.

So we have an international agreement which we manage together, all the different

partners, but the main Canadian entity is B.C. Hydro. That’s control over a British

Columbia river that is defining for a region. How can you do better than that?

I think perhaps what the member is suggesting is there may be some sort of approach

to assist us with the negotiations or something to make it easier. But in fact, we’re

at the table together negotiating these things, and they can only work if it’s an

agreement between, essentially, Canada, British Columbia, the region represented by

British Columbia, and the United States.

Our negotiators, including Mr. MacLaren and Ms. Eichenberger, spent weeks working

on this there. That’s how we resolve problems. We came to an agreement-in-principle

together that’s in the interest of both our country and the United States. You can’t

do better than that, because it’s an international treaty.

For British Columbia, we would not want to give up our authority. I may be the representative

of an NDP government, but I’m the representative of the people of B.C. and the B.C.

government. We wouldn’t want to give up our authority to anyone else in negotiating

and setting the terms of this arrangement. I think if we were to do so, there would

be significant objection from the opposition side.

[1:40 p.m.]

Larry Neufeld : Thank you for that answer. I am satisfied with that, and I appreciate your position.

Pete Davis : Let’s talk about the agreement-in-principle just a little bit more.

Regarding the Columbia River treaty, it includes commodities that will affect British

Columbians for decades to come. While the treaty addresses flood risk management and

power coordination, we must ensure that British Columbians are not left behind.

How will the minister ensure that the agreement doesn’t disproportionately favour

the U.S., particularly when it comes to compensation, which, if I understand it right,

expires in 2044? How can we guarantee that British Columbians won’t be left behind,

powerless, without any power in the future?

Hon. Adrian Dix : Because it’s a treaty between Canada and the United States in which British Columbia

Hydro and British Columbia is the main negotiator and operating entity. The special

role for British Columbia was carved out by Premier Bennett at the time, W.A.C. Bennett,

and has been supported by every Premier of every political stripe since that time.

The member will know that yes, we’ve negotiated an extension to the agreement around

the downstream benefits through 2044. We think that’s consistent with the requirements

and the expectations of the treaty. We’re taking, as I’ve mentioned, slightly less

in the early years and slightly more than we would have expected in the later years.

We have 20 years of certainty around which that will be done, which helps us and assists

any government in the future in dealing with its fiscal requirements and the requirements

under the treaty.

Twenty years is a long time, I would say. I would say it’s one, two, three, four,

five provincial elections from now. It’s possible I won’t be Minister of Energy still

at that time. It’s possible. I don’t want to speculate. I don’t want to upset the

House too much by suggesting that change could happen. That’s up to the people of

B.C. every time. But 20 years is a pretty significant negotiation — negotiated by,

really, our outstanding teams of public servants, who have, I think, supported and

protected our interests.

The agreement-in-principle enhances the role of the region, and it enhances the role

of the region because we believe and have believed over time that more benefits from

the Columbia River treaty should go to the region. It’s why, when I worked for Minister

Glen Clark, who continues to play a small role in these matters as chair of the board

of B.C. Hydro now, we established the Columbia Basin Trust legislation, the Columbia

Power Corp., which gave the region more resources and more authority to make decisions

about economic development in the region.

So with time, these things evolve. I’m going to pay tribute to those governments,

the Bennett government, at the time the Harcourt and Clark governments in the ’90s,

and governments since that, including a different Clark government, which started

these negotiations in 2016.

Pete Davis : The modernization process emphasizes integrating ecosystem health, Indigenous cultural

values and adaptive management. While these are important, how do you plan to balance

these concerns with the practical needs of British Columbia?

I want to specifically talk to industries like mining and agriculture. They rely heavily

on water management. What assurances can you give that these interests won’t be undetermined

in favour of environmental or cultural priorities?

Hon. Adrian Dix : I think, first of all…. The member will know this because he knows the First Nations

in his community, their interest in economic development and values as well. So on

the issues of water and flood management and management of the Columbia system, all

of those interests are balanced, as they have been over decades around multiple governments

— in fact, enhanced, for example, under the NDP government in the 1990s, and under

other governments as well.

[1:45 p.m.]

The intention, and this is something that the people of B.C. Hydro are particularly

expert in, is managing the system for the broader public interest. This has been done

now over the last 40 years, or the last 60 years, I should say, and will continue

to be the case — enhancing and giving ourselves more flexibility to address issues,

including issues of ecosystems, which are so important to people in the Kootenays.

Well, I agree they’re important to First Nations.

Every time I go to the Kootenays, I’m inspired by how much interest there is across

political spectrums and in the broader population in the management of ecosystems

and the importance of ecosystems — whether you’re First Nations, and it’s fundamental

to your values; whether you’re a hunter, fisher who’s inspired by, surely, one of

the most extraordinary places on earth.

Those have economic values as well. If you talk to guide-outfitters or anyone else,

you know that ecosystems matter for the economy, as well as for society. The way we

do it is to have the leading experts in management deal with the broad range of values.

What this agreement-in-principle does is expand our ability to do so, and that’s a

good thing for everybody, whether you love fishing, whether you’re First Nations,

whether you love hunting, whether you love hiking, whether you’re a business person,

whether you’re in forestry, or whether you’re in mining.

Pete Davis : We’re told that…. I’ve heard there might be…. There’s more flexibility to manage

water under this new treaty, but that flexibility comes with a four-year advance notice

requirement. Let’s be honest. That’s not really that flexible — four years.

In an era of extreme weather droughts and sudden climate events, how is this arrangement

going to help us respond in real time to emergencies? Does this actually tie our hands

rather than freeing them in what we think it’s going to do?

Hon. Adrian Dix : Well, the treaty is already flexible enough to deal with emergencies, but when you’re

changing the operations of a system on a river that’s been there, you know, a very,

very long time….

Let me put it in that sense. If you’re going to change the way you manage the system,

then you require notice so that everyone gets lined up and it’s done properly. We

can deal with emergencies all the time, but when you’re changing the management of

a river system, between all of the parties that requires some notice to get it right.

That makes sense in the current arrangements and would make sense in the future.

Harman Bhangu : I seek leave to make an introduction.

Leave granted.

Introductions by Members

Harman Bhangu : It’s my honour to introduce the first of three groups of fifth-grade students from

Langley Christian High School in the gallery today.

The students at Langley Christian School have excelled at giving back to their community

through numerous volunteer programs they participate in. They’re here to witness the

democratic process in action and learn more about how B.C. is governed.

Would the House make them feel very welcome.

Debate Continued

Pete Davis : The U.S. is offering $37.6 million per year for flood risk management and $16.6 million

for other so-called benefits. Frankly, that sounds kind of like peanuts compared to

what we’re really giving up. I mean, this is our water.

Can you explain how this deal can calculate it to reflect fair market value? And did

your ministry even consider asking for a higher compensation, or were we just simply

told that this is what we get, this is what we take?

[1:50 p.m.]

Hon. Adrian Dix : First of all, hello to all the students at Langley Christian. We’re in the debate

of the Ministry of Energy. We’re discussing a treaty between Canada and the United

States that was signed in 1964, the year I was born. I’m 60. We’re debating it here

today because we’re seeking to renew the treaty.

The hon. member opposite, who lives in the region most affected by the treaty, is

asking me, the Minister of Energy, questions about the treaty and about how it will

work in the future. It’s an exciting thing, something that starts at the beginning

of my life and is continuing to be in place now. So that’s what we’re discussing —

because you just joined us.

We got a payment of $64 million for this in 1964 that covered the first 60 years.

The member asked: did we ask for more than $37 million? We probably did. This was

a negotiated amount. This was an annual amount. It’s a lot more than $64 million over

60 years.

Pete Davis : Can the minister confirm that there is Indigenous consultation on the Canadian side,

and there’s no Indigenous consultation on the U.S. side?

Hon. Adrian Dix : The U.S. does consult its tribes, and we can confirm that there has been a First

Nations participation on the U.S. side in the negotiation as well.

Pete Davis : Thank you for confirming that. It was actually something that I was really wondering.

The AIP proposes a transboundary work group for the Kootenay River system. How will

the ministry ensure that the interests of residents and industries in the Kootenay

region, particularly the mining sector, are represented in the work group? How can

British Columbians protect local economic activity and regional development during

these negotiations?

Hon. Adrian Dix : We’ll do that, I say, by doing it. Local governments and the provincial representatives

and others, including the nations, will be part of the group, as will such groups

on the other side of the border.

Pete Davis : I would like to pass it on to my colleague from Salmon Arm–Shuswap, please.

David Williams : Thank you to the minister.

We’ll move on to the core business of B.C. Hydro and the ministry.

The ministry’s operating budget has increased from $109.867 million in 2024 to $112.095

million in 2025. My question to the minister is: how is this additional funding being

allocated, and what outcomes does the minister expect to achieve with the budget increase?

Can the minister also provide a breakdown of where the extra $2.228 million will be

spent?

Hon. Adrian Dix : I’m tempted, of course, to give a big speech about all the things that we’re doing

in British Columbia, particularly with respect to energy over the next period.

[1:55 p.m.]

But I suspect many of those issues, issues around LNG and the natural gas industry,

will be covered with my colleague from Peace River South, and the initiatives around

CleanBC and the environment with my colleague from Richmond Centre.

I won’t give a big speech, and I’ll just give a really precise answer around the 2

percent and what it involves. It involves an increase of $1.984 million in the First

Nations clean energy business fund spending plan. It involves $579,000 increase for

the shared recovery wage mandate, which is just wage increases, etc.

The coming together of the two ministries requires $593,000 in spending, because it’s

a new ministry with people coming from the climate action secretariat into the Ministry

of Energy, and then people in the Ministry of Mines leaving to form a new ministry.

There’s $100,000 to support corporate resources for the new ministry and all the actions

we’re taking, particularly in the northeast but other places in B.C.

On the other side of that, there’s a decrease in what’s called the ICE fund spending

plan of $863,000. And alas, in the minister’s office budget, a decrease of $165,000.

David Williams : Thank you to the minister.

My next question would be regarding a hiring freeze. How many full-time employees

did the ministry have on December 11, 2024, and how many full-time employees does

the ministry currently have?

Hon. Adrian Dix : I think that when the member asked me how many employees there were on December 11,

2024…. I think he would understand that it may not be reasonable to have done a count

on that day or that it would even be productive to go search for that information.

What I can tell the member is that in fiscal year 2025, which is the fiscal year just

ending, the average FTE burn and the number of FTEs in the ministry — which is not

employees but FTEs; you’ll understand if there are 2.5, that’s two people but one

FTE — is 358.

David Williams : Thank you, Minister.

Can the minister confirm that the ministry is complying with the Premier’s directive

of a hiring freeze?

Hon. Adrian Dix : Yes.

David Williams : Of that, how many positions are subject to the hiring freeze, and is the ministry

committed to not contracting any more outside consultants, as they cannot hire any

more staff?

Hon. Adrian Dix : We’re adhering to the rules of the hiring freeze, which is a hiring freeze.

With respect to contracts, the ministries do contract for services. Contracts end,

and they might be renewed. Otherwise, if you had annualized contracts, they would

just end.

But the rules of the hiring freeze are straightforward for us to deal with, and we’re

adhering to them.

David Williams : To just confirm, so the minister is confirming that there will be no more hiring

of any additional consultants.

Hon. Adrian Dix : We’re not replacing staff with consultants.

David Williams : Has the ministry conducted or initiated a review of all existing programs and initiatives

to ensure programs remain relevant, are efficient and grow the economy and keep the

costs low for British Columbians, as set aside by your mandate letter?

Hon. Adrian Dix : Yes.

[2:00 p.m.]

David Williams : Has the ministry found any dollars in savings? Has the ministry found programs that

were not useful and that have either been reformed or eliminated? Can you please specify

which departments?

Hon. Adrian Dix : Well, this is the process initiated by the Minister of Finance in its early days.

Although we’re certainly doing that now, this is something that happens continually

in government.

I recall — from my time, with a slightly bigger budget, as Minister of Health — that

we would sometimes have programs end and other programs start. That would be the same

here. This current review process is underway now, and I look forward to discussing

the outcomes with the member next year in estimates.

David Williams : We’ll move on from there.

I want to ask about B.C. Hydro’s customer and corporate affairs division. There is

a senior vice-president responsible for that department. According to Hydro’s own

website: “The team works directly with customers, stakeholders, Indigenous nations,

employees, regulatory bodies and our shareholder, the provincial government, to support

our customers, conservation and teams within our organization.”

Can the minister please describe the shareholder relations component? How many employees

work on this at B.C. Hydro, and what is their main function? Please include full-time

employees that are currently in that department.

Hon. Adrian Dix : I want to introduce again Chris O’Riley, who is the president and CEO of B.C. Hydro,

who is to my left. Just to say about Mr. O’Riley that he has announced that he will

be retiring soon. We are very disappointed that he’s leaving us because he has made,

I think, on behalf of the people of B.C., a really extraordinary contribution in his

long career at B.C. Hydro. I want to acknowledge that achievement, those contributions

today.

In terms of shareholder engagement, there’s a handful of people, according to Mr.

O’Riley. I’d be happy to share the precise number with the member. I don’t think we

want to delay. It’s a handful of people.

The Ministry of Energy and other regulatory bodies play an important role in dealing

with B.C. Hydro’s role, as we’ve just been talking about, in the Columbia River treaty

and in many other things. A handful of people, in dealing with those regulatory relationships

with the shareholder, not only is not a large number but would be typical of many

companies.

David Williams : I was wondering what purpose this has, if there’s only a handful of shareholders.

B.C. has a Crown as an extension of the government. The ministry provides directives

all the time. Why can’t other senior leaders just speak with the ministry directly?

Why would policy decisions happen through this division?

Hon. Adrian Dix : Well, they do, but there are significant policy decisions to be made and to be managed

between the provincial government and B.C. Hydro.

I’ll just give the member an example, in the wake of the 2021 heat dome…. At the time,

I was Minister of Health. I promise to stop mentioning Health; I think I’m not going

to do that. After 28 hours, the Legislature may have had their fill of Health for

the moment.

At that time, the Ministry of Health took an initiative to deliver air conditioners

to people who are vulnerable in B.C.

[2:05 p.m.]

That’s one of the dozens, if not hundreds, of initiatives that we coordinate every

year with B.C. Hydro, which is surely one of, some would argue, the central economic

Crown corporations in the province. So a small number of people ensuring that the

direction that’s given is the direction achieved and making sure that everybody understands

what they’re doing makes a lot of sense.

That said, of course, Mr. O’Riley and Mr. Pokorny, to my left and right, would speak

frequently, as do many others, in the thousands of B.C. Hydro employees. I think it’s

between 7,000 and 8,000 — maybe that’ll be a question I’ll get from the member — in

terms of the number of employees all the time.

B.C. Hydro, through Powerex and other circumstances, does extraordinary work. This

is a normal practice between the shareholder and a major Crown corporation. I don’t

agree with the member that it’s excessive.

David Williams : B.C. Hydro has a senior vice-president with a core responsibility of shareholder

relations and a team responsible for this, a small team. Is it correct that Hydro

has contracted a government relations firm to lobby the government, and if so, is

it correct that the firm is Framepoint Public Affairs?

Hon. Adrian Dix : There are four people in the unit, and they don’t lobby the government.

David Williams : Purchasing cards, a different focus. The ministry spent $3,172 through their purchasing

cards on Gravitystorm Ltd. Can the minister tell the House what the purpose of these

expenses was?

A second set of expenses here. The ministry spent $7,329 to attend a conference at

Colorado State University. Can the minister please tell the House what the conference

was and what the ministry gained from their attendance?

Hon. Adrian Dix : I’ll commit to the member that I will return in this session with detailed responses

to those questions that he has, so that he’ll understand the money spent, before we

adjourn this afternoon. The alternative is to wait a long time to have someone deliver

the information. That’s the member’s time. So we’ll keep things going, but I commit

to coming back to the member.

In terms of travel, I would say that as a minister of the Crown, in the last seven

years, certainly since 2018, I’ve left the territory of British Columbia — I don’t

even go to Blaine — one time. That was to a conference of Health Ministers in Charlottetown.

There is a freeze on travel now, and people won’t be travelling outside of Canada

in the near future.

David Williams : The Clean Energy Act says, on electricity self-sufficiency in clause 6(2): “The authority

must achieve electricity self-sufficiency by holding, by the year 2016 and each year

after that, the rights to an amount of electricity that meets the electrical supply

obligations solely from electricity generating facilities within the province.”

Can the minister confirm that this legislation is currently being met by B.C. Hydro?

Hon. Adrian Dix : Yes.

David Williams : My understanding is that we have a shortfall. I was told that we are currently importing

20 percent of electricity. Is the minister asserting that enough power capacity exists

and it just isn’t being used?

[2:10 p.m.]

Hon. Adrian Dix : Well, these things get reviewed by the BCUC. In the most recent review of the IRP,

they reviewed the average water conditions, that we met the standard of self-sufficiency.

As you know, water conditions aren’t always average.

One of the remarkable things about B.C. Hydro is that when there’s import and export

of power, which there is, the export of power is worth a lot more than the import

of power. We know this because of the average of $572 million a year in profit that

Powerex delivers to the people of B.C. that reduces B.C. Hydro rates here. The result

of that, of course, is the third lowest electricity rates in North America, which

is a real tribute to the people of B.C. and the people of B.C. Hydro.

These matters are reviewed, and decisions are made by the B.C. Utilities Commission.

They say we’re in compliance on the definition of self-sufficiency that we need to

meet in the act.

David Williams : Thank you to the minister.

Since we’re on the topic of Powerex, we might as well move on to it.

Established in 1988 and based in Vancouver, Powerex is a wholesale energy marketer

trading electricity, environmental products and natural gas, amongst other things.

Over the past five years, Powerex has a range of net incomes from $192 million to

$1.052 million. In the fiscal year 2023-24, three employees made over $1.3 million,

and nine employees made over $500,000. Total staff cost was $45.7 million.

In the fiscal year 2023-24, B.C. Hydro imported 13,600 gigawatts of electricity on

net basis, almost 25 percent of our total needs, costing $1.377 billion. This is according

to Energy Futures.

My question: what is the current gross income of Powerex for the current fiscal year,

and what is the projection for the upcoming fiscal year?

Hon. Adrian Dix : Well, if you look over the last five years…. The fiscal year has just ended, so the

report will be coming out. I would be happy to share it with the hon. member when

it’s available. But the average is in the neighbourhood of $500 million to $600 million.

When he said $1 million, he meant $1 billion, which is what Powerex has made in individual

years for the people of B.C.

Powerex is unusual, I think, different from virtually every other unit of the provincial

government or the broader public sector. They’re energy traders, and they serve us

well. When you make that much money a year for the people of B.C., based on your skills

and talents, in a trading market that is very competitive…. It makes a lot of sense

to tell them to go get it, and they go get it. It’s an extraordinary thing.

Again, this is an achievement of B.C. Hydro over time. It started in 1988, with the

Social Credit government. Leading role in the 1990s, when we were selling our power

to California in difficult times for them, NDP government. Leading in the 2000s and

2010s under a Liberal government.

And leading again now, because we believe that a dynamic, free-thinking, skilful group

of people using the resources of British Columbia and the flexibility of our amazing

hydro system can make us a lot of money that we can use to pay for the net income

of the province — that means the share of hydro profits that go to the people of B.C.

— and also to ensure that rates are kept low.

I think that makes sense. If you think of it, $60 a percent…. You make $550 million,

say. Well, that’s 9 percent less on your hydro bill. Thank goodness for Powerex. Thank

goodness for the vision putting it together. Thank goodness for the people that work

for it.

[2:15 p.m.]

The message at B.C. Hydro and at Powerex is: let’s use that ability — the ability

to be part of a trading system that involves 14 states, Alberta, British Columbia,

northern Mexico — to trade our power in the best possible circumstance, to hold resources

behind dams and then sometimes to take power when it’s virtually free from other jurisdictions.

They do a brilliant job at Powerex, and I’d be happy to have them brief the hon. member

if he would be interested in hearing about the work they do.

David Williams : Thank you to the minister. Yes, I wouldn’t mind being briefed at some point.

I think this answer has probably been already given. The current net income of Powerex

is probably also not available until reports come out. But I will say… Is the minister

happy with the compensation structure of the CEO and the current structure of Powerex?

Jody Toor : I seek leave to make an introduction.

Leave granted.

Introductions by Members

Jody Toor : Can the House please welcome the second group of grade 5 students from Langley Christian

School. These vibrant young learners are eager to watch and learn about the work of

our chamber today.

Let’s give them a warm welcome as they embark on this exciting education experience.

Debate Continued

Hon. Adrian Dix : Welcome to the new group from Langley Christian.

We’re talking in the House…. Every year, every minister of government has to defend

their budget in the House. The hon. member is the opposition critic for B.C. Hydro,

and he’s asking me questions about B.C. Hydro. I’m doing my best to answer those questions.

I’ll let all of you be the judge about how well we’re all doing, but it’s great to

have all of you here. This is truly profound, what goes on, on a daily basis, here.

I’m very impressed with the group at Powerex. We have a new CEO who’s excellent; he’s

president and CEO of ICBC. And the group is, as I say, different than everyone else

in government and in the broader public sector.

You think of an organization…. They say: “Well, we pay our traders a lot, and they

deliver with profits to the people of B.C.” Isn’t that fantastic? They earn, and I

feel sensitive because he’s in the camera shot, quite a bit more than the president

and CEO of B.C. Hydro — how about that? — because of their value, because of what

it takes to recruit them, what happens when you lose them and their value in the open

market.

So am I happy? Yes, I’m happy, and the people of B.C. should be happy every time they

deliver the kind of results they deliver for the people of B.C. that allow us to avoid

rate increases.

David Williams : To the minister: I understand there are probably a lot of traders, and you want people

that are very competent. Is their compensation structure based on performance?

Hon. Adrian Dix : Yes.

David Williams : Thank you, Minister.

Is the minister concerned that a trade war with the United States could result in

being unable to trade and provide revenue to B.C. Hydro? Basically, Powerex being

affected by the trade war.

Hon. Adrian Dix : I’m concerned about everything with respect to our relationship with the United States,

and this is one aspect of this. I was asked — as the member will know because he is

obviously responsible for B.C. Hydro and on the opposition side of the House — to

answer these questions a little while ago. What occurs if the trade between B.C. Hydro

and other entities in the western grid were to somehow be interrupted? That would

have an impact on British Columbia.

We would have power in British Columbia that we might not otherwise have, but the

advantage of the flexibility of our system is we hold power behind our reservoirs

at its greatest value. Other jurisdictions don’t have that benefit. We’re able to

sell into the United States, and it’s a real benefit to sell into the United States.

The western grid, which is 14 states, northern Mexico, Alberta, British Columbia….

We’re a small part of that grid.

[2:20 p.m.]

There are hundreds of millions of people in that grid, and we’re, I think, 5.8 million

people in British Columbia now. So we’re a small part of that enterprise, probably

2 to 3 percent, I would say.

Some people ask — for example, when Premier Ford took his step; it feels like a long

time ago; I think it was about a month ago now — about putting a surtax on energy

exports to the United States, why we didn’t do the same thing. I’m very supportive

of Premier Ford and all he has been doing and respect very much the things he’s doing

for all Canadians.

Well, why it doesn’t make sense for British Columbia is that we’re in this marketplace.

If we were to impose some sort of surtax, it would affect our ability to sell our

power but have relatively little immediate impact, especially this time of year, on

the overall marketplace. So it wouldn’t have had effect, and you don’t, when you’re

in a trade war, hit yourself in the face. You don’t take actions that hurt you more

than they hurt them, by definition.

I am concerned, of course, because B.C. Hydro, I think, is a key part of the western

grid with our American friends — most of the time, a little less so now — and with

the province of Alberta as well, and our Mexican friends. This has enormous benefits

to B.C., which I’ve described to the member, which is the net income of Powerex, so

we’d be concerned about that.

The other concern, of course, is that when you’re exporting and importing…. In the

last 14 years, we’ve exported more than we’ve imported eight times, and we’ve imported

more than we’ve exported six times. The last two years we’ve imported more than we’ve

exported, because they’ve been drought years, and we may talk about this in a few

moments.

But if that system has advantage and it’s interrupted, we would have to take action

to ensure the reliability of electricity service in B.C. So you bet, in light of what’s

happened, we’ve prepared and are prepared for those circumstances. We don’t see them

as desirable, but we are of course prepared, should the somewhat erratic actions of

the President of the United States continue.

David Williams : Thank you to the minister. I think that we should all be very concerned about a volatile

stock market, especially with a traded commodity.

Question to the minister. If B.C. Hydro is unable to realize revenue from trade through

Powerex, which is a real, distinct possibility with what’s going on with the stock

market these days, what are the effects on B.C. Hydro providing affordable electricity?

Hon. Adrian Dix : Well, it’s not really related to the stock market. What it would be related to is

some sort of regulatory intervention by the U.S. government. That would be the risk.

The current circumstances in the stock market would not be the significant factor

there, I’d say.

With respect to Powerex and B.C. Hydro, when you have a successful entity such as

Powerex and that effort is interrupted, that would have an impact on rates, of course.

That’s why we have considered all of our options with respect to the United States

and electricity, why we’ve acted as we have done — seriously, both at the bargaining

table with the Columbia River treaty and just in general.

We’ve acted seriously to protect our own interest and to prepare for those eventualities.

But the current system and the actions of Powerex benefit British Columbia. If it

were interrupted, it would affect British Columbia.

Let me say, on rates, that since the current government has come to power, rates have

increased 15 percent under the rate of inflation, and that’s a great achievement for

B.C. I say in contrast, and I won’t dwell on this at this moment, that rates between

2001 and 2017 were 54 percent above the rate of inflation — so above the rate of inflation

by 54 percent under let’s call them Liberals and 15 percent below the rate of inflation

under the current government.

We have two increases now, at 3.75 and 3.75, which means that at the end of that process,

it’ll be 12 percent below the rate of inflation.

What B.C. Hydro has done in terms of hydro rates for British Columbians makes us huge

beneficiaries of a nationalized, 100 percent publicly owned system. I know our neighbours

in Alberta, in the period between 2020 and 2024, have had 40 percent increases in

electricity — 40 percent; and we’ve had, in that same period, 6 percent.

[2:25 p.m.]

That benefits us, and anything that disrupts that is obviously a negative, as with

Powerex. I think I gave the member the sense that if it’s $60 million a point, roughly,

in a rate increase, then you can think of a profit of $550 million having a 9 percent

or a 10 percent impact on rates, were that to go away. But we’re obviously acting

to make sure that it doesn’t go away.

David Williams : Thank you, Minister.

With that note, is the minister saying that the current rates are suppressed?

Hon. Adrian Dix : I’m saying that B.C. Hydro, which is owned by the people of B.C., does everything

it can to make sure rates are affordable, and we sure need it at this time.

I don’t know of anyone out there who thinks that life is more affordable or so affordable

that they don’t have to worry about it. It’s not at the grocery stores; it’s not anywhere

else. And having a publicly owned Crown corporation that delivers rates dramatically

below Seattle, dramatically below Portland, dramatically below Edmonton and Calgary

and Toronto is a huge benefit. And compared to New York? Well, I don’t need to tell

you. It’s an extraordinary advantage for British Columbia.

One of the ways we keep rates low is we maximize revenue on the resource that we all

own, and isn’t that the right thing to do? Does anyone really say that that’s not

the right thing to do?

So when we say that Powerex drives rates down, to use the member’s words, suppresses

rates, you bet we do. And we’re going to keep doing it.

David Williams : Thank you, Minister.

I believe we just went over the Columbia River valley treaty, where we’re actually

not going to be producing as much electricity and we’re going to be buying power back

at market rate. I would imagine we’re buying back that power at high time. I don’t

know. I just don’t see that being a workable thing to try to keep rates down.

Hon. Adrian Dix : Well, it’s quite the contrary. The reason that Powerex makes money is that we sell

high and we buy low. Good thing. Lots of people here have been in business. Selling

high and buying low — that’s good business practice, and that’s exactly what we do.

It’s quite the contrary.

What the Columbia River treaty provides, and Powerex does this work on behalf of the

province and the people of B.C., is it takes the downstream benefit and, typically,

sells it in the American market at a profit, which makes sense. We use that profit

to, amongst other things, keep hydro rates low, which is a benefit to the people of

B.C. That’s what we do. It’s quite contrary to what the member is saying.

What the downstream benefits do and what the B.C. Hydro system does is allows us to

use electricity when it’s at its most valuable, to sometimes sell it when it’s at

its most valuable.

In case members think that I’m taking credit for something the government is doing,

these dams have been built over time by multiple governments across our province,

under the time of B.C. Electric and Social Credit and NDP governments in the past.

The Site C dam started under the previous government and was completed under our government.

This is the extraordinary thing about B.C. Hydro and hydroelectric power. In a time

of climate change, to be able to produce clean electricity in a hydro system is an

enormous benefit for the people of B.C., and I don’t think anyone could argue with

that.

David Williams : Thank you, Minister.

With that in mind about buying low, selling high, has the ministry or B.C. Hydro forecasted

potential for America to cut off electricity imports as part of an escalating trade

war?

Hon. Adrian Dix : Well, I think this is the exact question the member asked a few minutes ago. I’m

happy to talk about it again. It’s not a problem.

What Powerex does, as I noted…. I just want to be clear on this point, on the downstream

benefits. Powerex sells the power on behalf of this consolidated revenue fund of the

government. With respect to B.C. Hydro’s resources, it buys themselves power.

The short answer is, if that action were taken by the American government…. It’s why,

because we’re in this system, we don’t recommend that action be taken by the Canadian

government — because the system benefits us. Should there be a trade war in that nature,

of course it would harm people, but not just on this side of the border, on both sides

of the border, and most especially those customers in the United States, who also

can benefit from the clean energy produced by B.C. Hydro.

[2:30 p.m.]

We have a system where we export and import power, where, in the average year, more

years than less, we’ve exported more than we’ve imported in terms of the amount of

power. But every year, the value of the power we export is greater than the value

of the power we import by a massive margin. And that’s just great for British Columbia.

That’s our legacy of B.C. Hydro that I’m so very proud of.

If the member is asking if the United States were to engage in new actions in a trade

war to harm Canada, yes, they can harm Canada. And we’re preparing for that eventuality,

although obviously it hasn’t taken place. We’ll be doing everything we can, also,

to avoid it taking place.

I think “everything we can” includes Team Canada actions from coast to coast to coast

that defend our interests. When they go after auto workers in Ontario, those are our

interests too. When they go after our resource industries, it should be their interests

too. That’s the nature of having a country, and we’re stronger together.

David Williams : Thank you, Minister.

With that in mind, is B.C. Hydro currently able to fully deliver on electricity demands

without imports?

Hon. Adrian Dix : Yes, they are, but that would be a change in our system, so we would respond to that

accordingly. For example, you would take…. There are a number of IPP contracts that

currently export to the United States, but we have the ability to keep those here.

We would take advantage of that. We would use our vast and effective reservoir system.

And we would engage with other provinces in a spirit of reciprocity to ensure that

systems were maintained in B.C.

We’re prepared for that eventuality. We don’t want it to happen. We made it clear

we don’t want it to happen. But should the American government take what would effectively

be illegal and inappropriate action against our province, we are prepared for that.

David Williams : Thank you, Minister.

Just to clarify, when I meant imports, I mean interprovincial imports as well. So

you’re saying that B.C. is self-sufficient right now?

Hon. Adrian Dix : Well, we regularly trade power with the province of Alberta and will continue to

do so. It’s one of the reasons why I’ve been working hard to enhance our relationship

with the province of Alberta. I think I said in the House a week or so ago that we

should work more closely with other Canadian provinces. It’s not just what we formally

call internal trade barriers, but we’ve got to work more closely together.

The inter-tie, the relationship, which is the source of trade between B.C. and Alberta….

And I mean Alberta wind power, because they have, as you know, some of the best wind

power in the world in the province of Alberta — and obviously, Alberta natural gas

and other things, and B.C. natural gas and B.C. hydroelectric. There’s trade all the

time between our provinces, and that will continue.

We’ve got to enhance our ability to do that. It strengthens us all when B.C. and Alberta

and Saskatchewan and the Yukon, in particular, work as one to enhance our collective

interests. I’ve been really honoured to work with the Minister of Energy of Alberta,

whom you may know, Mr. Jean. Also a former leader of the opposition. Didn’t become

Premier. How about that? We have a lot in common, I would say. And Mr. Neudorf, who’s

the minister responsible for utilities in Alberta.

We’re doing a lot of work together because I think we should be stronger together,

and we’re going to continue to do that work.

David Williams : Thank you to the minister.

Just to clarify, since we are depending on Alberta, it seems, quite a bit…. We are

certainly getting imports through Powerex, through different importing. Some of those

imports are coming in, you just finished saying, from Alberta — LNG, biomass, wind,

solar. There are different facilities, correct?

I just want to clarify that some of our power that we’re importing is coming from

what we would consider, in this province, not green energy.

[2:35 p.m.]

Hon. Adrian Dix : Well, just to say the province of Alberta, and I give them a lot of credit for this,

has stopped using coal in June, for example, which is part of their efforts to address

climate change and to respond to the needs of our province. Good for Alberta for doing

that. We have to, I think, acknowledge when people other than ourselves make progress,

right? That’s important.

Does B.C. import energy from Alberta? Of course we do, much, and especially, for example,

gasoline, which we’ll talk about later. In terms of electricity back and forth, we

buy and sell electricity with Alberta all the time. That makes sense for us, and it

makes sense for them. I’m not sure why we wouldn’t want to do that.

We buy and sell energy with Washington state and Oregon and other states. Of course

we’re going to do that with Alberta and other Canadian jurisdictions. That makes a

lot of sense — to me, anyway. I don’t know what the member is saying.

With respect to whether we need more energy, which I think is where the member is

going, well, we’re doing that, and we’re going to do more of it. Site C added 8 percent

to B.C. Hydro’s energy production. The wind power projects, which I know members of

the opposition support, are going to add another 8 percent.

We’re going to do further calls for power. We need more electricity. We need more

clean electricity in B.C. We need more transmission capacity to take that energy into

places where it’s not right now, including and especially the northwest of B.C. where

there is, really, limitless economic potential and which has been underserved under

multiple periods of time, for decades, in my view, in terms of the distribution of

energy. We think there’s opportunity there. Of course we’ll do that. We’re producing….

That’s why we’re adding energy to the electricity of the system: because we think

we need more. We’ve added more than half a million people in the last three years

to British Columbia. More than half a million people in three years increases our

load as well — an 11 percent increase in population in three years, almost 20 percent

over the time of this government. All of them use energy, so we need to meet that

demand as well. We need to do it by creating more energy, and that’s what we’re doing.

David Williams : Thank you, Minister.

Just to clarify, a simple yes or no. Is 100 percent of the energy that we’re importing

through B.C. Hydro, through Powerex and Powertech, 100 percent green energy, or is

some of it fossil fuel or other fuels, yes or no?

Hon. Adrian Dix : Well, it’s not yes or no. It’s a mix.

Misty Van Popta : I seek leave for an introduction.

Leave granted.

Introductions by Members

Misty Van Popta : In the chamber today, we have Ms. Wessner’s grade 5 class from Langley Christian

School — up behind me here, I believe, if they want to give a quick wave.

This is a great independent school with a long history in Langley. They have a strong

educational program, which includes teaching about Canadian democracy and our parliamentary

system, and I am very happy to see them here.

Will the House please make them welcome.

Debate Continued

David Williams : Thank you, Minister.

Outside of the ten new wind and solar projects, what is B.C. Hydro doing to ensure

electricity reliability without importing?

Hon. Adrian Dix : A number of things. One of the least expensive ways to address these issues, the

cheapest energy, if you will, is the energy you don’t use. B.C. Hydro — for generations,

but especially now, as we’ve added to its conservation programs — is investing heavily

in conservation. The conservation program….

The incremental value of the conservation is about 200,000 homes, just to put that

in context, in case people think it’s a small thing. It’s a large thing. In particular,

it benefits low-income people, because B.C. Hydro’s programs have really focused on

that in recent years.

Secondly, 8 percent, the Site C, so 8 percent on the new projects, new calls for power

coming. I can tell…. We obviously, as well, need more firm power and capacity — so

expanding firm power, expanding the energy we produce in our calls for power, increasing

conservation.

[2:40 p.m.]

All of these are ways B.C. Hydro addresses the growing population and, really, the

economic vibrancy in B.C. and the potential of economic vibrancy, particularly in

natural resource industries but also in high tech and life sciences and other things,

industries that sometimes have high energy requirements that are happening right now.

So while there are real challenges with the United States that affect our economy

right now, we’ve got to lean into building British Columbia, and B.C. Hydro is the

means to do that.

What I’ve said to B.C. Hydro, and what I believe, is that we need to, more so than

in the past, reach out to our potential. That means building the North Coast transmission

line. I’m disappointed the Leader of the Opposition opposes that. I’m not sure about

that, but it benefits his region in any event. We need to create more, to get more

energy in our province, renewable energy in particular. So $6 billion in investment

in the wind and solar projects that we have before us.

Of course, we’re not the only jurisdiction in the world doing this, quite the contrary.

Xcel Energy, which is the second leading company in renewables in the United States,

is doubling its capital investment this year — doubling its capital investment; while

Exxon and others are cutting their capital investment.

The value of renewable energy everywhere in the world is clear. We in B.C. have to

invest in that as well, and we are.

David Williams : Thank you, Minister.

Well, we’ll move on to some clean energy. I understand that Powertech Labs and Powertech

USA…. They were established in 1988, and they’re based in Surrey. Powertech is a wholly

owned subsidiary of B.C. Hydro, and Powertech USA is located in Boston, which began

its operations in 2023. I believe its focus is on developing hydrogen transport and

fuelling infrastructure solutions.

In their August 2024 report, Powertech USA reported a net loss of $2.2 million, which

was less than the projected loss of $4.8 million. This was the first fiscal year.

Powertech revenue, over the last five years, has ranged from $49 to $63 million, ranging

from a loss of $1 million to a revenue of $5.4 million.

In the fiscal year 2023-24, Powertech paid out salaries totalling $25.9 million, and

$19 million for supplies. Its subsidiary, Powertech USA, paid out an additional $1.9 million in salaries and $1.7 million to suppliers. I don’t know what suppliers.

My question to the minister is: Powertech and its subsidiary, Powertech USA — can

the minister outline what role they play and provide to B.C. Hydro?

Hon. Adrian Dix : Well, Powertech Labs and their American subsidiary play a significant role in innovation.

They provide services to utilities, so they make money. The member answered his question

there when he described their income over the years. They make money for B.C. Hydro.

They employ leading-edge researchers and engineers. They do a lot of work in the hydrogen

space, which has got enormous potential for our province. The member will know…. Maybe

he’ll be able to tour, once the session ends, the hydrogen filling station, for example,

at UBC, which is a reflection of the work of Powertech Labs.

[2:45 p.m.]

We have clients in the United States as well, which is the reason for the American

subsidiary. It makes a small amount of money. It’s a relatively small organization.

It really punches above its weight in terms of the innovation it brings to our problems.

So you have an agency that brings together engineers and researchers that innovate

some products that have been around for a long time, that benefit B.C. Hydro, that

benefit other utilities, that make money for the province and that hire engineers

and researchers. It’s a pretty good deal for B.C.

David Williams : Thank you for the answer, to the minister.

I do understand that innovation companies are very volatile, but apparently they don’t

make money, at least not all the time.

My question is to the minister. What measurable accomplishments have Powertech and

Powertech USA accomplished in the last five years?

Hon. Adrian Dix : Well, before industries become big industries, they’re smaller. It’s the leading

supplier of hydrogen filling stations. It’s innovation here and in lots of places.

It’s on the cutting edge of the hydrogen industry.

The member says it doesn’t make money. Well, it makes money over time, and it’s proven

that. He listed off the net income. I didn’t list off the net income. If you look

at that, you see that it makes money over time, and it brings innovation in that space.

It works with private companies, such as HTEC and others, to…. In the hydrogen space,

which is a growing industry — everybody says it’s going to grow; how quickly and when

is a discussion and a question — well, Powertech is a leader.

This is a part of B.C. Hydro’s innovation, which I think most people in B.C. would

say should continue, given the success they have in that market, in being a leading

player in that market, albeit a smaller market, and the people they employ and the

advancements they make. But what a great thing to do at a company and, at the same

time, produce, over a period of years, net profits to B.C. Hydro and the people of

B.C.

I think he would agree with me that that’s a pretty good deal for the people of B.C.

And I’m sure that the people of Powertech…. I know this for a fact, because they are

very proud of their work. I’m sure they would be delighted to give members of the

opposition a briefing on all their activities.

David Williams : Thank you to the minister.

My question to the minister is that…. Yeah, I understand that new companies are sometimes

very risky. They’re a gamble. Gambling, you can make money at too. I’m not sure if

that’s something that I think that a publicly owned utility should be doing — gambling

with the public’s money.

That aside, my question to the minister is: can the minister explain why it was necessary

to open up a subsidiary, Powertech USA, in Boston?

Hon. Adrian Dix : Taking advantage of expertise. Selling our services in the United States.

To compare a money-making subsidiary of B.C. Hydro that invests in the energy future

of the province and the world to gambling…. I don’t know where…. Perhaps the member

is a good tout. I don’t know. But to compare it to gambling is just wrong.

It’s gambling not to invest in the future if you’re a major energy utility. B.C. Hydro

is one of the most important companies in the province. Of course it should invest

in research. Of course it should use cutting-edge engineering. Of course it should

develop new services and deliver services to its customers better. Powertech Labs

is a small company, but it isn’t a gamble. It’s a success. It’s a success for the

people of B.C.

I don’t know what the member’s game is, whether it’s slots or roulette or blackjack

or poker. Maybe he gambles on the NHL. It’s been a tough year.

[2:50 p.m.]

But I would say that what he’s doing is comparing high-tech, cutting-edge industry

to gambling in Las Vegas or, I don’t know, maybe Salmon Arm. I don’t think that’s

a fair comparison.

David Williams : Thank you, Minister.

Yeah, I’m saying that not all innovation is bad. Of course we have to have lots of

innovation. We should be investing in Canadian companies. We have a lot of creative,

innovative companies, especially in the electrical field. But I think that when you’re

spending money in the U.S., that is kind of spending our money elsewhere and taking

a risk.

With that in mind, what is the mission of Powertech USA?

Hon. Adrian Dix : Powertech has two missions. One is to serve B.C. Hydro and other utilities with equipment

and innovation, and the other is in the hydrogen space, as we build the energy transition

and we look to the future.

I think when I hear people talk about, for example, LNG…. We’re going to have a discussion,

I suspect, with the member for Peace River South on Monday on these questions. One

of the advantages of LNG is we’re upgrading and then selling our product elsewhere.

Equally, in terms of innovation and tech and equipment and the work of Powertech Labs,

selling those goods and services in the United States makes a lot of sense for us

if we’re going to maximize our return.

David Williams : Thank you to the minister.

My question to the minister is: why was this work unable to be achieved in Canada

and you had to have a U.S. subsidiary?

Hon. Adrian Dix : Because if you want to take advantage of the U.S. market and you’re selling in the

United States and you’re servicing the United States, you’ve got to be in the United

States.

David Williams : Thank you, Minister.

In light of the tariff and trade war, do we have any plans to relocate the subsidiary

or close the subsidiary in the U.S. of A.?

Hon. Adrian Dix : It’s an export business, and it supports our jobs here. There’s no question that

the tariffs and the threat of tariffs are impacting every industry.

We discussed earlier the ways that it might potentially affect B.C. Hydro, the way

they might affect the energy industry — and, obviously, that would be the case — and

the way that such actions might affect Powertech Labs, about any number of thousands

of companies, private or public, like it.

We’re serving customers in the United States. We’re supporting our Canadian business

and, ultimately, the people of B.C. I think that makes a lot of sense, and I think

we should continue to do it.

David Williams : Thank you, Minister.

Since we’re concerned with innovative technologies and keeping prices low for the

consumer, let’s move on to the Utilities Commission.

BCUC efficiency drive seems to be reducing the involvement of public interest groups.

The B.C. Utilities Commission used to engage a lot of public interest from different

groups that wanted to engage with them so they could have input on rates, and that

has been severely curtailed because of efficiency cutbacks.

Can you confirm that, and what’s your plan moving forward?

[2:55 p.m.]

Hon. Adrian Dix : Well, I have two points.

You know, I understand because for many years, 12 years, I participated in the estimates

process on the opposition side of the Legislature. So I have experience in the challenges

of being an opposition member.

In the case of the B.C. Utilities Commission, it’s an aspect of administrative justice

and is under the purview of the Attorney General. But I’m not going to let that stop

me answering the member’s question because we’re trying to make progress here. I’m

sure his colleague, the critic for the Attorney General, will have lots of questions

for the Attorney General, and the member might not get into those questions with the

Attorney General.

Let’s say that the new head of the Utilities Commission…. He has been new for a few

years. Dr. Mark Jaccard is, I think, really a remarkable figure in B.C. life, and

we recently reappointed for five years. He’s has been increasing the efficiency of

the commission, which is good for the ratepayers, good for those engaging in the commission.

So what you’ll see over a period of years under Dr. Jaccard’s leadership is a reduction

in the time that it takes to make decisions.

And while that sometimes affects B.C. Hydro, it also affects private entities such

as Fortis and others who go through the Utilities Commission. So what you have is

a utilities commission that is maintaining its transparency, providing more regular

and frequent reports and cutting down on the regulatory burden by reducing the time

to decision, all of which I believe members of the Legislature on all sides would

support.

David Williams : My question to the minister — we’ll just jump back a bit — is to do with rate increases

among the B.C. Utilities Commission. The recent application to the B.C. Utilities

Commission for 2025-26 shows a forecast of $546.5 million in trade income from Powerex,

which reduces the utilities’ revenue requirement. This forecast for trade income is

apparently based on the five-year average of Powerex’s results from 2019-20 to 2023-24.

But B.C. Hydro itself said that Powerex’s income from 2022-2023 was extraordinary,

and it cannot predict whether or not these opportunities will continue or persist,

going forward, which brings us back to the volatility of the markets.

My question to the minister is: how confident is the minister that Powerex will be

able to earn this forecast income of $546.5 million? If Powerex earns less than this

amount, what will be the effects of B.C. Hydro’s net income and, subsequently, the

effect on the provincial deficit in ’25-26?

Hon. Adrian Dix : What the member said was: “Well, one year it was more than the other years.” And

it’s why there’s a long-standing convention to use five-year averages to judge these

things. The five-year average is $546 million. B.C. Hydro has a way, because income can vary in a present year, of balancing

out that income over time, using deferral accounts.

The member said: “Well, what if they get less?” Well, what if they get more? That’s

affected both ways by that process. So the reason there’s a five-year average is because

averages are more descriptive and take away the vagaries of a particular year. That’s

why we use five-year averages.

David Williams : I understand. So you’re saying that there’s cost averaging over five years, which

is great. So you’re saying that there’ll be no impact to the rates for B.C. Hydro’s

customers, using that cost averaging over five years.

Hon. Adrian Dix : I’m saying that if you’re judging the need for rates, going forward, use five-year

averages to measure what the rate increase is and what the balance of incoming costs

is. That’s what we do. And that makes more sense than a one-year average, which can

skew things. You make $1 billion in a year; you shouldn’t assume you make $1 billion

next year or $1 billion the year before. That’s why virtually every regulated utility

uses some version for profit centres, like Powerex, of a five-year average.

[3:00 p.m.]

David Williams : In light of Powerex’s trading and costs averaging over five years, as well as new

streams of electricity coming on board, what you’re saying is that rates should be

fairly stable and that B.C. customers can expect fairly stable and no significant

rate increases over the next five years.

Hon. Adrian Dix : Well, I don’t need to speculate on that. We know what the rate increases are in the

next two years. They’re 3.75 percent and 3.75 percent. We also know that the average

in the previous years, from 2020 to 2024, was dramatically below the rate of inflation.

This is ’25-26 and ’26-27. In other words, over the time of the government, in the

ten-year period of the government, B.C. Hydro rates will have been 12 percent under

the rate of inflation.

I think, given the nature of costs and everything else, given that a lot of us are

customers of B.C. Hydro…. Some people live in Fortis territory, I know.

In comparison to anyone else in the business — Seattle, Portland, anyone else in the

business on the west coast; Alberta, which has seen 40 percent increases in the same

period that we saw 6 percent increases — I’m saying that B.C. Hydro is committed to

providing affordable rates for people.

[Lorne Doerkson in the chair.]

What also happens and we also might understand is that we need more electricity. The

member talks about it. Other people talk about it. I hear people talking about it

in the media. When you have incremental electricity…. One of the reasons B.C. Hydro

rates are low is that our resource is often a heritage resource. We kind of paid for

the Revelstoke dam a while ago, as the member will know. So that power, that energy,

is cheaper, that electricity is cheaper because it’s kind of our legacy electricity.

When you add incremental electricity, such as, say, adding Site C to the system by

probably, I’m guessing, late summer…. The CEO of B.C. Hydro will shudder at that,

because he’s saying that we think it would be late summer, but it might be as late

as November.

In any event, in the 2025 calendar year, all of the units of Site C are going to be

operating. When they operate and they go on the rate base, that power — because it’s

new and because we’re paying for it and are borrowing money over 80 years, amortized

over 80 years for that — is going to increase, the cost of power, as will any incremental

source of electricity.

When you have more people — half a million more people in the last few years, one

million more in the last ten — then you need more electricity. When you have the opportunities

we have in critical minerals and the demand for electricity is even higher, that will

be an upward pressure, because we are going to have to add electricity. New incremental

electricity is more expensive than our existing heritage electricity, which we, in

effect, have already paid for.

David Williams : Thank you to the minister.

I’d like to move on. Since we’re talking about utilities and the Utilities Commission,

let’s move on to rate increases. On April 1, the NDP announced that electricity rates

would increase 7.5 over two years. That squeezes the pocketbooks of many British Columbians.

In addition to this increase to electricity rates, this will result in an increase

of 16.6 percent over four years. Ontario, Manitoba and Quebec all offer electricity

at lower rates than B.C. B.C. Hydro needs a long-term plan to keep rates affordable.

A 16 percent increase in four years does not achieve that, at least not in my mind.

B.C. Hydro increased labour costs up to 15 percent. I understand that labour has gone

up significantly. B.C. Hydro has also applied to the B.C. Utilities Commission to

eliminate the two-tiered power system.

For two years, B.C. Hydro has run an operating loss prior to borrowing the funds through

a deferral account, right? Based on that, my question: does the minister expect that

a 16.6 percent increase in hydro rates is an acceptable number for ratepayers to accept?

[3:05 p.m.]

Hon. Adrian Dix : The member said that electricity rates are higher in B.C. than in Ontario. That’s

absolutely not true. They’re dramatically higher in Toronto than they are in Vancouver,

say. So the substance of his question is wrong.

But in any event, let’s just give the member some comparisons. Western North America

residential electricity rates: $11.49 in Vancouver; $19.72 — this is a comparison

in cent per kilowatt hour — in Seattle; $21.56 in Portland; $25.28 in Calgary; $25.68

in Edmonton; $55.43 in San Francisco, five times higher. We have the lowest electricity

rates, except for Manitoba Hydro and except for Quebec hydro, in North America.

We have them because we’ve reduced hydro rates against inflation by 12 percent since

this government has been in office. The member will ask: “Well, what was it like under

the previous government?” Well, I’ll tell him. It was 54 percent above the rate of

inflation under the previous government, from 2001 to 2017.

This isn’t an achievement by me or by magic; it’s an achievement by the people of

B.C. and the people of B.C. Hydro. We have the lowest electricity rates around. Yes,

there’s an increase. Site C has come on. We have to build a stronger hydro system,

and we have many new customers. We have a $36 billion capital plan, because when you

have 500,000 more people, you need more substations. You need to deliver more resources

everywhere, whether it’s in Vancouver or Williams Lake or wherever it is.

I would say to the member that this is an extraordinary advantage for British Columbia.

To say that a 12 percent decrease against inflation of electricity rates in B.C. is unaffordable is

wrong. It’s the opposite. It’s an achievement for B.C. When compared to the 54 percent

above inflation in the years before that or the circumstances in Toronto or in Edmonton

or in Calgary or in Seattle or in Portland, when we are leading North America…. When

he says the rates are higher, well, he’s simply wrong. The Quebec government does

an international comparison, which I’m happy to share with the member.

I agree with him. We’ve got to keep hydro rates affordable. That’s what the direction

to the Utilities Commission and the decision to limit rate increases, at a time when

we’re adding the Site C power, to 3.75 percent in each of the next two years does.

It’s in the context of, in the previous eight years, a 15 percent below the rate of

inflation decrease in electricity rates against inflation, which is an achievement,

again, not by me or anybody else but by the people of B.C. and the people of B.C.

Hydro.

David Williams : Thank you, Minister.

My question to the minister. I believe you probably are reading from your report,

which basically states the 12 percent. But according to our research, it found that Ontario, Quebec and Manitoba

all had lower hydro rate options.

Why is the minister trying to mislead British Columbians about the cost of electricity

in B.C.?

Hon. Adrian Dix : I said we had the lowest electricity rates. Aside from the fact that the question

is out of order…. When you’re making the statement that electricity rates are lower

in Ontario than they are in B.C. when they’re lower in B.C. than they are in Ontario,

and then you add to that the suggestion that we’re being misleading or misleading

the Legislature, that’s both not really on, but it’s also incorrect.

We have the third-lowest electricity rates in North America. The lowest, Quebec hydro.

The second lowest, Manitoba Hydro. We’re very close to them, and then there’s a gulf.

You know why they’re the lowest? Because they’re nationalized Crown corporations.

They’re public utilities. That’s why they’re the lowest. It shows the value.

In B.C., that value was put in place, interestingly, under a Social Credit government,

which nationalized B.C. Electric and created B.C. Hydro. It has served us under administration

since then, and it’s given us the third lowest electricity rates in North America.

You should see the comparisons between B.C. and New York. You should see the comparisons

— we talked about it — between B.C. and San Francisco. They’re five times higher.

If you’re trying to run a household in San Francisco, that impacts you. So 40 percent

increases in Alberta, and higher rates in Toronto, of course, than here.

You know, nobody is doing anything. These are public reports, and they’re not my reports.

They’re just the information that’s available. Quebec hydro, lowest. Manitoba Hydro,

second. B.C. Hydro, third. And we are way ahead of everybody else.

[3:10 p.m.]

The Chair : I just want to caution members against using terms like “misleading.” Certainly,

we may have disagreement in data or information, but that’s a serious allegation,

and I would caution against using that type of a term.

David Williams : Thank you, Chair, and I withdraw that comment.

I thank the minister for the answer.

So you’re saying that Alberta rates are quite a bit high. On the same token, we are

buying electricity from Alberta. Is that correct, yes or no?

Hon. Adrian Dix : Well, we’ve just had a lengthy discussion. B.C. Hydro is part of a western grid,

and we buy and sell electricity across that grid. To the benefit of British Columbians,

we make $550 million in profit from doing it. Why? Because the B.C. hydro system is

exceptional. Because the work done by people who built our dams is exceptional. The

work done on transmission lines is exceptional. We have a huge territory compared

to lots of places in the world, and we’re delivering some of the lowest electricity

rates in the world here in B.C.

Yes, we trade between Alberta and B.C. Yes, we trade between the United States and

B.C. And because we have a flexible hydro system and basically Alberta doesn’t, so

it’s not…. I don’t blame them for those circumstances, but they don’t. They have very

much more volatile rates than we do.

Equally, people who are in FortisBC territory are seeing much higher rate increases,

dramatically higher rate increases this year than B.C. Hydro, which is a real challenge

for them. Both on the former West Kootenay side of things and the gas side of things,

they’re seeing rate increases that are significant because of the nature of commodity

price increases. They go to the BCUC too. I’m not being critical of Fortis; I’m just

saying that’s true.

Because of the work of British Columbians over time, we have the lowest electricity

rates around. They’re lower than Ontario. They’re lower than anywhere else but Manitoba

and Quebec, and that’s because Manitoba and Quebec, like us, have extraordinary publicly

owned provincial hydro systems.

David Williams : Thank you, Minister.

My question to the minister would be going back to the importing and the rate increase.

Of the rate increase, how much is it because we import 20 percent of our power?

Hon. Adrian Dix : We’ve had this discussion before, but I’m happy not to say “asked and answered” but

to give it another go.

B.C. Hydro rates are lower because we import and export power. How do we know this?

Because Powerex, which imports and export power on behalf of B.C. Hydro and the people

of B.C., makes on average — the member said it — $546 million in net income. So that

importing and exporting of power reduces hydro rates for people in B.C. and allows

us, for example, to have residential rates, cents per kilowatt hour — 11.49 cents

in Vancouver, 15.06 cents in Toronto, the opposite of what the member said. And 14.28 cents in Ottawa,

lower than what the member said.

In other words, B.C. benefits because of that very system of importing and exporting

power that I talked about. And the evidence for that he provided, and I provided,

which is the net income we make from Powerex every year.

David Williams : Thank you, Minister.

My question is to the minister. Since we’re getting such a great deal and we’re doing

such a good job in trading…. Alberta has a totally transparent grid system where they

can see where the power is coming from. Anybody can go on the website, and they can

see which plants are producing what at what time, and you can tell what’s being exported

and imported.

Is the minister saying that he is committed to making that as open and public and

transparent in this province as well, yes or no?

Hon. Adrian Dix : Well, the member will know that B.C. Hydro posts the real-time net actual flow for

imports and exports through the B.C.-U.S. and the B.C.-Alberta interties, sampled

every five minutes online.

[3:15 p.m.]

For the member’s edification, it’s www.bchydro.com/energy-in-bc/operations/transmission/transmission-system/actual-flow-data.html.

I’ll send it to him.

Unlike Alberta and California, we do not have a deregulated wholesale electricity

market. It’s a different system where an hourly pool price is set for the cost of

megawatt hour of electricity. Disclosing our production volumes at an hourly interval

has the potential to disclose our trade positions across the Western Interconnection.

In other words, it affects our ability to make money for the people of B.C. and to

reduce the increases in hydro rates here in B.C., which we’ve both acknowledged now

that we’re doing through this net income.

So we have a different regulatory system and we operate differently, but that said,

the system is quite transparent. And of course, it’s regulated by the B.C. Utilities

Commission.

David Williams : Thank you, Minister.

With that in mind, the provinces and the states that have a website and an open, transparent

system. Do they trade, same as Powerex does?

Hon. Adrian Dix : Different jurisdictions have different regulatory systems. I just noted that Alberta

and California have deregulated energy markets, which function differently than ours.

Every major utility trades in electricity.

David Williams : Thank you, Minister.

My question to the minister. Maybe I’m just a little confused. They have a deregulated

market, and we have a public utility. But if they’re trading, and even if it’s a deregulated

market, would they not have shareholders that are buying into those, whoever’s trading,

much the same as B.C. Hydro is doing here?

Hon. Adrian Dix : I think I made it clear that B.C. Hydro doesn’t disclose at an hourly interval because

that discloses our trade position. But that said, there’s detailed information about

B.C. Hydro’s trading volumes back and forth across interties that’s available on a

public website.

Our system is different. We don’t have a deregulated market like they do in Alberta

and California. When you have a deregulated market, there’s different access to that

market.

We’re a trader. We trade to maximize the value of our asset, and that’s what we’re

going to continue to do. It’s been pretty successful over time, doing that. The people

it treats best, the people that it’s an aid to, the people it’s supporting are the

people that vote for the member and vote for me: the people of B.C.

David Williams : Thank you, Minister.

Again, maybe I’m a little confused. I understand you don’t want to affect the trading

ability and the ability to make revenue by trading electricity. I don’t see how you

can regulate when demand is high because it’s cold or it’s dark. I don’t think that

changes the market.

Can the minister please elaborate?

Hon. Adrian Dix : That’s why we trade by the hour. We take advantage of that fully. The market is different

when there’s more demand for electricity, when there’s less demand for electricity.

That makes sense. That’s the way it has always worked, that’s what it makes for, and

that’s what we benefit from.

When you can trade on an hourly basis, you can take advantage to a maximum extent.

When I say take advantage, I mean maximize the value of our asset in B.C., which is

what the people of B.C. want us to do — maximize the value of that asset. And that’s

what we attempt to do. These are very sophisticated traders in B.C. Hydro. It’s its

core business for a generation now — two generations now, three generations now, I

should say.

[3:20 p.m.]

B.C. Hydro uses its expertise in this area to maximize value for the people of B.C.

The member may be against that, and that, I guess, would be his position, but I’m

in favour of it. I’m in favour of B.C. Hydro doing the best possible job for the people

of B.C. That’s why we put the system in place that we have now.

David Williams : My question to the minister. A little more than a year ago Alberta almost had a blackout

because of demand, and because they had an open and transparent system, they were

able to deal with that. Does the minister think that this information should be kept

from British Columbians? Would that not be a safety factor or…?

Certainly it’s a good thing to mitigate risk, as much as it happened in Alberta a

little over a year ago.

Hon. Adrian Dix : Well, the member is referring specifically to January 12, 2024, when an extreme cold

snap in Alberta affected their system. That was also, as you’d expect because we share

a border with Alberta, a pretty cold day in B.C. too. We had peak-load demand, and

we still sold Alberta power to help them out. We still sold power to our southern

neighbours to help them out, so we have a pretty extraordinary system, yes.

David Williams : Question to the minister. Does he not agree that having an open system where people

could go on there, quickly react to the demands and stop the province from having

a blackout because they could buy power from B.C. or elsewhere…? Would that not be

helpful to British Columbians? Shouldn’t British Columbians have that same ability?

Hon. Adrian Dix : Well, the lesson is that the B.C. system withstood that and even helped out Alberta.

That’s a pretty good lesson for our two provinces, which is that we should do that

for one another. They use the cell phone system, as the member will know. In Alberta,

on that day, it had a mixed effect, I would say, on the Alberta population, but that’s

a debate for the Alberta Legislature, not for me.

What I can say is that B.C. Hydro obviously prepares for those circumstances because

of the remarkable job they do delivering electricity to people across B.C. Every day,

they continue to do that. On that day, which was a tough day for us, we helped out

Alberta too.

What a great country this is that that happens. What a great country, and what a great

organization B.C. Hydro is, that we’re flexible enough to be able to do that — to

meet B.C. demand, help out Alberta and, yes, help out Washington state. Isn’t that

a great thing for our country, that we have a system flexible enough to deal with

that?

I would say, in fairness…. I mean, Alberta is — let’s acknowledge it — in North American

terms, an energy superpower. They are. But in some areas, particularly electricity,

they are not as well off as we are. They have great natural resources in Alberta that

we use, of course, including many of us, to drive around, right? So this is not in

any way a criticism of Alberta, and it’s one of the reasons my response to all this

is to engage with Alberta to take advantage of their strengths, take advantage of

our strengths and work together more closely. That’s precisely what we’re doing.

David Williams : My question to the minister. Currently we import as well as export electricity. Can

the minister tell me exactly how much electricity we import and what percentage that

would be?

[3:25 p.m.]

Hon. Adrian Dix : Let me take the member through that, net exports or imports over the period 2005

to the present. So 2005, 2006 and 2007 were net import years in the range from 4,526

gigawatt hours in 2006 to 7,560 in 2005. Then 2008 was a net export year, and 2009,

2010 and 2011 were net import years. And 2012, 2013 were net export years; ’14 and

’15 were net import years; ’16, ’17 and ’18 were net export years; ’19 and ’20 were

net import years; ’20, ’21 and ’22 were net export years; and ’24 and ’25 were net

import years.

In other words, sometimes we import more power and sometimes we export more power,

but always the value of what we export is more than the value of what we import, hence

the remarkable profits and success of Powerex and B.C. Hydro in keeping rates low

in B.C. Our power is more valuable because we have an integrated hydroelectric system

that is remarkable and is our legacy from our parents and grandparents and great-grandparents.

It changes every year. In drought years in B.C., we take those times to keep our reservoirs

as high as we can. So we import more power in drought years, and we’ve had a couple

of sustained drought years. The member may have questions about this subsequently,

but I won’t anticipate his questions. I’ll let him ask them. Those are the nature

of those things. This is public information. I’m happy to share it with the member.

And rather than reading it all out, I might just send it to him or provide it to him

at the end of the day.

Amna Shah : I seek leave to make an introduction.

Leave granted.

Introductions by Members

Amna Shah : I am absolutely thrilled to welcome 18 grade 10 to 12s from a school in my riding,

the Honour Secondary School. Yeah, give it up.

We have a very excited and thrilled bunch here, and I’m so pleased to welcome you

to this House so that you may learn about the processes and procedures that are involved

in one of the best things about this planet, and that is democracy. I sincerely hope

that you enjoy your time here.

A special shout-out to your teacher, Amelia Misak. I hope I’m pronouncing that correctly.

Will the House join me in making all of these students feel very welcome here today.

Debate Continued

David Williams : My question to the minister is that British Columbians deserve transparency. Currently

we have import and export years. If B.C. Hydro became 100 percent self-sufficient, going forward, that would mitigate the reason for not to

have a transparent and open system that the public could go on to see where our power

is going, because we would be selling our power. Is that correct?

Hon. Adrian Dix : First of all, it’s great to have the students from Honour Secondary School here.

Just to say, right now in the House, it may not seem like there are as many people

here as you might expect. I’m the Minister of Energy, and I’m defending the budget

for B.C. Hydro. We’re debating B.C. Hydro and what it’s doing. The member on the opposition

side, the critic, is asking questions about B.C. Hydro. He wants to know about rates

and about new projects and all kinds of other things. So we’re having that discussion.

Every year I have to do this as the minister. I have to come in and say this is my

budget and this is what I’m spending the money on. And the opposition gets to ask

any question they want for a long time. This current debate — I don’t expect you to

stay for the whole debate — will be about 11 hours. You don’t have to say for the

whole thing. It’s longer than Survivor .

[3:30 p.m.]

In any event, you see…. After all that, I almost forget the question, except I don’t.

As I said from the beginning, B.C. Hydro is compliant in terms of self-sufficiency.

If you were to build energy costs at high cost to meet the highest-demand import year,

it would increase rates. And that’s not what we do. We build for average rates, and

then we use our trading system to keep rates low for the people of B.C.

Now, when the overall population rises and we have these extraordinary opportunities

in economic development that we have now, we need to build more wind power projects,

more solar projects. We just built Site C. We have to look at other dam projects.

We have to look at other projects across B.C. to build up both our firm power — in

other words, the power that’s available to us all the time, if you will — and our

intermittent power, like wind, which is available to us most of the time but not all

the time because it’s, by definition, intermittent. And that’s what we’re doing now.

I know there are some people who would argue or want to argue for higher hydro rates.

I don’t recommend that view to the hon. member, but of course, he’s open to have it.

But B.C. Hydro is compliant with the self-sufficiency requirements, as established

most recently, in 2021, by the BCUC.

David Williams : Thank you, Minister. I’m not quite sure if that was a really clear answer.

What I was trying to say is that if you are trading…. There’d be no reason to trade

if you’re 100 percent self-sufficient, because you’re not importing electricity, so

you don’t care what you’re buying it for because you’re not buying it.

So with that in mind, if you’re not buying electricity and being a public utility,

the fact is that you should have an open system where people can know where their

electricity is being generated from, correct, yes or no?

Hon. Adrian Dix : I think I’ve answered this on a few questions. I’m happy to answer it again, because

these are important questions and the member is asking them.

The trading system we have is really valuable to the people of B.C. and B.C. Hydro.

This is, I think, hard for people to understand. I sometimes explain it to people.

It took me two or three times hearing Mr. Gilmore explain it to me before I fully

grasped the situation.

We sometimes buy power at negative numbers. In other words, people pay us to take

power. Pretty good. Pretty good deal. I’d like to do that for other things, I think.

Maybe a 10 percent discount in gambling, for example. The member was saying you could

make money in gambling. I don’t know. They often make offers. Those don’t seem like

good offers to me, though, when I hear them on the television.

So we have a trading system. In all trading systems, no matter how much electricity

you produce, you’d always have to trade. There are always variations in load, and

the trading system we have really benefits B.C. In other words, the power we have

is so valuable because it’s a hydro-based system that we…. It’s more valuable. The

power we sell is more valuable than the power we import, even in years where we import

more power than we export, because our power is more valuable. That’s a pretty good

system for British Columbia.

So to raise rates in order to meet some artificial tests, which I think is what the

member is suggesting, wouldn’t make sense for British Columbia. But to build to meet

demand is obviously a requirement, and that’s what we’re doing.

David Williams : Thank you, Minister. I’m not sure if that was a very clear answer, but saying that….

Moving forward, the other question I had was: does B.C. Hydro plan on being self-sufficient

for electricity usage in the current fiscal plan?

Hon. Adrian Dix : As I’ve answered several times now, based on the requirement of self-sufficiency,

which is average demand, we’re self-sufficient.

[3:35 p.m.]

But we have to increase our production of electricity. That’s why we have the call

for power, and that’s why we added Site C, and that’s why there are other projects.

The population of B.C. is rising considerably, and there’s increase in demand because

of all of the opportunities in B.C. — for example, in critical minerals but in other

areas of the province.

In addition, the opportunity to electrify — for example, the electrification of parts

of the oil and gas industry, which we’re going to talk about a bit on Monday…. Those

are huge opportunities for B.C. So all of that is positive for B.C.

Trevor Halford : Just a couple of questions Surrey-related, for power. Has the ministry or B.C. Hydro

identified an area for the substation for specifically providing power to the Campbell

Heights area?

Hon. Adrian Dix : We haven’t made it public yet, to the member, but we expect to soon. I’ll be happy

to let the member know when that happens so he’ll know that for his constituents.

Trevor Halford : In regards to Campbell Heights…. We can talk about some other areas in Surrey in

a second, but I think the commitment was made last year to have that substation in

service by 2032. We are seeing rapid growth in Campbell Heights, which I think is

a great thing.

I know that there are seve