2016 Legislative Session: Fifth Session, 40th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Thursday, May 12, 2016

Afternoon Sitting

Volume 39, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Routine Business

Introductions by Members

Orders of the Day

Committee of the Whole House

Bill 25 — Miscellaneous Statutes (General) Amendment Act, 2016 (continued)

L. Popham

Hon. N. Letnick

V. Huntington

Hon. M. de Jong

S. Chandra Herbert

G. Heyman

Hon. M. Polak

Hon. P. Fassbender

L. Krog

D. Eby

Hon. R. Coleman

Hon. C. Oakes

Report and

Third Reading of Bills

Bill 25 — Miscellaneous Statutes (General) Amendment Act, 2016

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Technology, Innovation and Citizens’ Services (continued)

D. Eby

Hon. A. Virk

G. Heyman

M. Mark

D. Routley

Estimates: Ministry of Public Safety and Solicitor General

Hon. M. Morris

M. Farnworth

[ Page 13061 ]

THURSDAY, MAY 12, 2016

The House met at 1:33 p.m.

[Madame Speaker in the chair.]

Routine Business

Introductions by Members

M. Elmore: I’m very pleased to welcome some close friends here and my parents. We’re joined here by some close family friends and also a childhood friend of mine. We enjoyed a lunch in the dining room. My parents and their close family friends Mr. and Mrs. Les and Yolanda Tarnai. We want to not only welcome them here, but they also just celebrated their 60th wedding anniversary, so that’s quite an accomplishment.

The year 1956 was marked by a lot of upheavals and challenges, not only in their lives but around the world — the year of the revolution in Hungary. Les Tarnai had just graduated from university as an engineer. Les and Yolanda got married, and they left the country in 1956. They ended up in Vancouver, because Toronto was full and Montreal was full. They came all the way to the west coast here, to Vancouver. I’m very pleased to have them here.

My childhood friend Kathy Tarnai is very distinguished. She’s now an instructor of mechanical engineering, trades and technology, at Camosun College. She’s a PhD candidate at Royal Roads. She’s undertaking her PhD topic, which will revolutionize the instruction of physics — not only in British Columbia, Canada, but around the world. She’s looking at working with grade 11 physics teachers to introduce physics principles and contextualize physics classes in tackling everyday problems.

Madame Speaker, I know you’re interested in that — to encourage more women to get involved in non-traditional fields of work. This will be not only more appealing to women and to girls but really to a broader

section of folks, to get involved in physics.

[1335]

She’s also the B.C. champion of the 30 for 30 of Engineers Canada — by 2030, to encourage, to have 30 percent women enrolled in engineering courses in post-secondary institutions in British Columbia. She’s a great champion of that. Her daughter Rebecca is an aspiring writer. Stories are in her, and she just writes them down. She’s gifted in that area.

It’s great to have them all here. I ask everybody to please give them a warm welcome.

S. Chandra Herbert: I just wanted to rise and ask that the House might join me in wishing a very happy 40th anniversary to Vancouver–West End’s West End Community Centre.

Orders of the Day

Hon. M. Polak: In this House, I call continued committee stage debate on Bill 25; and in

Section A, the Douglas Fir Room, I call continuation of the estimates of the Ministry of Technology, Innovation and Citizens’ Services.

I would also mention that upon completion of the Ministry of Technology, Innovation and Citizens’ Services estimates, we would then move into the estimates for the Ministry of Public Safety and Solicitor General.

Committee of the Whole House

BILL 25 — MISCELLANEOUS STATUTES

(GENERAL) AMENDMENT ACT, 2016

(continued)

The House in Committee of the Whole (Section

B) on Bill 25; R. Lee in the chair.

The committee met at 1:37 p.m.

section 1 (continued) .

L. Popham: Unfortunately, I was interrupted while I was giving my history lesson. But it looks like, because I’m getting up at a different point, I can continue on for another 15 minutes, maybe. We’ll see where we go.

Actually, I’d like the minister to respond a little bit to the things that I’ve said regarding the boundary reviews, the importance of the boundary review and why we initiate a boundary review to make sure that we keep the integrity of the agricultural land reserve — comments on that, and the history, which we both know, that got us to this place.

Hon. N. Letnick: Thank you to the member opposite. Yes, we were interrupted by lunch and a great announcement with the SPCA today. Please, to all the viewers out there that have pets, don’t leave them in hot cars.

On the boundary review, we continue to support the boundary reviews. That’s why, in part, in the last three years, we’ve increased the budget for the Agricultural Land Commission from the $1.9 million base budget to the last balanced budget of $4.5 million. Part of that is to empower the land commission with the tools it needs to continue the boundary review.

The boundary review, as we’ve said this morning, is a process. Involved with the boundary review are individual reviews of individual parcels of land. We have heard from the residents that were involved with the pilot in the Kootenays, in the East Kootenays — as well as two of the MLAs from the Kootenays, one on each side of the House — that there were challenges with the boundary review, in particular with individual property owners that did not

[ Page 13062 ]

want to have their properties excluded or considered for exclusion from the agricultural land reserve.

[1340]

Government is sympathetic to that, not only for the East Kootenays but for all parts of the province. The ALC should make sure, before it renders a decision on a removal of parcel, that they get the consent of the parcel owner.

We continue to support the Agricultural Land Commission and the great work that they’re doing in the province and also support the rights of property owners.

L. Popham: Can the minister remind me — because, as I stated, on the website it shows that there are two boundary reviews that are underway — what point they’re at? I think he might have mentioned this before.

What percentage of the boundary review might be done in those cases at this point?

Hon. N. Letnick: Thank you to the member opposite for the question. Both sections are in the same timeline in the process. No decision on any of the reviews has been made public yet.

L. Popham: I think it’s quite important information. Does the minister have any idea when that would be made public?

Hon. N. Letnick: This is only a proposed piece of legislation, so as of right now, it’s up to the independent land commission to make that determination.

L. Popham: If it’s up to the ALC to make that determination — when that information is released — could they release that today?

Hon. N. Letnick: Yes. It’s up to them. They could release it today or whenever they choose to.

L. Popham: I think that information is quite pertinent to our discussion that we’re having. I’m wondering if the minister or I could request that information from the Agricultural Land Commission so that we’re able to carry on this debate on this legislation in a complete way.

Hon. N. Letnick: The intent of the legislation is to change the policy so that you have to ask for consent from the landowner before making a decision. The decisions have not been made public yet. If the legislation passes, then the Agricultural Land Commission would have to go to the property owners and ask for consent.

L. Popham: And if, by chance, the legislation doesn’t pass?

Hon. N. Letnick: Then the current state of affairs would stay in place.

L. Popham: So if the legislation doesn’t pass, the boundary review would still continue to completion, and the legislation we have currently would apply to the properties in question.

The properties in question would be the ones that would be identified as excluded from the agricultural land reserve. If that boundary review is completed, those properties will then not be part of the agricultural land reserve, and the ones that are slated for inclusion would go into the agricultural land reserve.

By this legislation not passing, we would have an agricultural land reserve in that area that only has land that has agricultural potential?

Hon. N. Letnick: I’m not too sure if I understood all of the processes that the member opposite went through, so let me just say how it’s going to happen.

Currently, there is no legislation that has been passed, so it would be up to the Agricultural Land Commission to make their decision public as they saw fit.

[1345]

If the legislation passes, then what would happen is the Agricultural Land Commission would be obliged to go back to those property owners and receive consent before they made their final decision public.

L. Popham: I’d like to try my version of what the minister just said. If the proposed legislation passes, land that has no agricultural viability stays in the agricultural land reserve if the owner wishes it to do so.

If the legislation doesn’t pass and the Agricultural Land Commission is able to continue on with their boundary review, which…. The intent of that is to remove land that doesn’t have agricultural value outside the agricultural land reserve and to include land that has agricultural value into the reserve. If the legislation doesn’t pass, all we’ll have left in that area within the agricultural land reserve is land with agricultural potential.

I think the minister sees where I’m going with this — I hope. We’re passing a law to allow land with no agricultural potential to stay in the agricultural land reserve by choice of the owner. Is that what we’re saying?

Hon. N. Letnick: I’m glad to hear the member is going to support it, by saying we’re passing a law that would….

Interjection.

Hon. N. Letnick: Do you have any choice?

Let me say this to the member opposite. Here’s something that one of her colleagues, the MLA for Columbia River–Revelstoke, said in his letter to me. “The complaint from affected property owners is that no consideration is being given to the cost implications, especially for seniors, for those who may have their property excluded from the

[ Page 13063 ]

ALR against their wishes. Tax increases on excluded parcels could be significant.”

I would just ask the member opposite: if she was the MLA for Columbia River–Revelstoke and a senior came up to her and said, “They’re talking about taking my land out of the land reserve against my wishes, and my taxes are going to go up,” would she really say to that senior: “Tough”?

Well, the NDP member for Columbia River–Revelstoke said: “No, that’s not fair. That’s not proper process. You should be able to provide your consent before a decision is rendered on your property.” We agree with the member from the NDP party, and we are passing — hopefully, passing — this law so no one else in the future would have to go through the stress that these people have gone through to see that their land may come out of the reserve against their wishes.

L. Popham: The minister makes a very good point: so that people in the future don’t have to go through what he considers to be a bad situation. We’re setting a precedent for the rest of the province. This is not specifically around that boundary review. This is about every boundary review that will continue after this.

What the minister is saying is that we’re going to have an agricultural land reserve that is full of land, spotted around the province, that has no agricultural value. That’s what the Minister of Agriculture is telling us today. That’s okay with him.

He’s trying to make a tax argument in this chamber around an agricultural issue. If the minister is concerned about those constituents…. I get it, absolutely. There’s no reason that that tax incentive has to take place inside the agricultural land reserve. This is not an agricultural issue.

I would ask the Minister of Agriculture, if he is willing to pass legislation that will decrease the integrity of the agricultural land reserve: how can we defend an agricultural land reserve if we’re allowing pieces of property with no agricultural value to stay in it?

Hon. N. Letnick: The property has been in the reserve since ’72, so over 40 years. Leaving it in the reserve, whether or not it has agricultural value…. I’m not the one to determine that. That would be up to the Agricultural Land Commission, as the member has already pointed out. It would do no harm to agriculture. Taking it out against the will of the property owner would have definite harm to the property owner. So it’s all a matter of balance, at the end of the day.

[1350]

This person and these people that have come to the MLA for Columbia River–Revelstoke — and Kootenay — have not come to me personally. I’ve just seen what’s been in the media. I’ve seen the letters, and I’ve received their initiative. I feel for those people. If I believed for a minute that keeping them in the ALR and having them provide consent to be removed would have a big impact on agriculture, I wouldn’t be here proposing this legislation.

I believe it’s okay to make sure that we respect the wishes of these property owners if they are going to be looked at for exclusion by the boundary review, that they have to provide consent and that it would not have a significant impact on agriculture in British Columbia.

V. Huntington: I expect that a lot of the detail that I’m concerned about would be unfolding within the regulations, but I want to have a sense of what the minister expects in the regulatory process as it unfolds.

If the Agricultural Land Commission tells the landowner, “We believe parcel 613 should be excluded from the reserve,” and that landowner says, “No, I don’t want it to be excluded from the reserve; I like the tax advantage” or “I just love land in the agricultural land reserve, and I don’t want you to touch the status quo of my life,” then there are two issues I see coming up.

One is that the commission has said that parcel of land is not good for agriculture, okay? Does the minister foresee the regulations permitting the landowner to have non-farm uses on a piece of land that the ALC wanted to exclude and yet remains within the ALR; i.e., are you setting up a situation where non-farm uses can dot the ALR simply because a landowner didn’t want to exclude and wants to maintain the tax advantage but go ahead with non-farm uses, because it’s no good for agriculture?

Hon. N. Letnick: If you wouldn’t mind giving us just a little bit of latitude. This is going to be in the next section, but I’d be happy to answer the question now, if I can, as part of the answer.

The first piece is, as I explained to the critic before, no determination has been made by the land commission on the suitability of a particular parcel if this passes. If this passes, they have to achieve consent prior to a decision being made by the land commission on a parcel. It’s still questionable whether or not a particular parcel would have been excluded, because they don’t have consent yet, right?

Number two is…. Let’s put that aside just for a second and directly answer your question. If a parcel is in the land reserve, whether or not they opted not to give consent or they are not being considered for a boundary review, they would all fall under the same rules. They would have to apply to the land commission for non-farm use, everything else. They would fall under the same rules as any other piece of land.

[1355]

With the Chair’s indulgence, you specifically asked what we are looking for in the regulations. In

section 2 it says: “for the purposes of

section 29, respecting the requirement for each owner’s consent to an exclusion under that section, including, without limitation.” The regulations would be: “(

i) establishing procedures and

[ Page 13064 ]

requirements in respect of the consent, (ii) respecting circumstances in which an owner is deemed to have consented to an exclusion, and (iii) respecting exceptions to the requirement for consent.”

V. Huntington: I just need to clarify something the minister said.

The Chair: Member, on

section 1.

V. Huntington: Sorry, Mr. Chair. I just need to clarify something that the minister said.

Did the minister say that the request or the need for a landowner’s consent to exclude wouldn’t require the classification of the land first? How could you make a decision to exclude without having done the boundary review and classified that particular piece of land?

It seems to me what the critic has been saying is the boundary review requires classification of the soils. If the soils are deemed to be unusable for agricultural, then they would consider exclusion. But they won’t exclude without the permission of the landowner. So you could have…. You can’t make a decision to exclude on a boundary review unless you have the classification, or can you? Is there something else going on here I don’t understand?

Hon. N. Letnick: I’ll re-read what I read before.

The review is a process. Exclusion is a decision on a case-by-case basis and now will only be able to occur with consent. When the review is done, parcels, in general, will be identified — some specific ones in the area. A hearing will be held. At that point, once the hearing is held so that the commission can get all the input on the land and the parcel in particular in question, then they would have to get consent from the landowner before they make their decision.

The decision hasn’t been made yet as to whether or not…. Let’s say, for example, that this legislation wasn’t here. The decision has not been made yet until the decision is communicated. In case of the act coming true, and hopefully it does, then they would have to achieve consent before a decision is made public, which means that the commission hasn’t made any determination as to whether or not the land would have stayed in the reserve or not stayed in the reserve.

It’s my assumption — and it’s only an assumption on my part — that if this legislation passed, the commission would probably go out and ask for consent prior to spending a lot of resources on determining whether or not a particular parcel of land should be excluded from the reserve.

V. Huntington: So then really, what we’re doing is we’re not determining whether agriculture is suitable on land or not. What we’re first determining is whether a landowner wants that land in the ALR or not. It doesn’t make sense, with great respect.

It’s a huge…. I don’t know which is more a waste of time. Going around asking landowners: “Do you want your land in the ALR or not? And if so, then we won’t do a boundary review on your land.”

I mean, what is it? Is it permission from the landowner to do a boundary review? Or is it doing the boundary review, determining the classification and then asking whether you want the land excluded because the classification is so low?

This is two completely different ways of approaching what we all know is the appropriate course of action and has been historically at the ALC. I don’t understand here what the government is trying to accomplish, unless it’s something a little more upsetting than I thought it was originally.

[1400]

Hon. N. Letnick: I’d just like to say, once again, that the process is something that the Agricultural Land Commission will determine, will put into writing and will make sure that all parties know how it works. They can make some changes to it, but from the way I understand it right now, their plan is that they would do a review of the parcels within the area that they’re looking at. The review could contain all kinds of agrologist reports, locations, whatever. They would do that preliminary review. They would then identify the parcels that they’re interested in, and then they would hold a public hearing.

In my experience in local government for nine years, you don’t make a final decision until after the public hearing. What’s the point of having a public hearing if you’ve already made a decision before the public hearing? So they would hold the public hearing, then make their final decision, and then they would advertise their final decision.

What we are saying, through this legislation, is that before they make their final decision public through that whole process, at some point they need to get the consent of the property owner. Now, it’s just my assumption that if this law passes, if this change passes, then they would probably go at some point early in the process and ask the property owner: “Do you really want us to remove you — if you’re found to meet all these other conditions — from the land reserve?” That way, they don’t have to deploy a lot of resources in considering a parcel if the parcel is not going to be able to be considered.

But again, that’s just my way of logically thinking how this process would work. At the end of the day, what the goal is, as I said before, is to provide some fairness to those people who are being asked if they would want their land removed from the land reserve against their wishes.

V. Huntington: Well, I’m quite satisfied with the process as it was thus and then outlined by the minister. That makes some sense. There are the other issues of whether or not, if land was to be excluded and the landowner

[ Page 13065 ]

didn’t consent to exclude…. Then what is the status of the land?

The Agricultural Land Commission will have done its assessment, will have said it’s not suitable for agriculture. So you’re in limbo in the ALR.

Interjection.

V. Huntington: You don’t think they will have said that. Then what was the point of assessing the land for the boundary review?

The Chair: Members, please. Through the Chair.

V. Huntington: Through the Chair — yes. Sorry, sir.

Okay, I will ask that question. I really don’t want to take up the critic’s time, but….

Interjection.

V. Huntington: It’s okay?

I thought I understood from the minister’s description of the process. Yes, the final decision won’t be made until they ask the landowner. But until that time, you indicated there would have been an assessment of the land. They would have taken those assessments to public hearing. They would have said: “We’re looking at excluding these types of land. What do you think, everybody?”

They would have gone to the landowner and said: “Now, based on this assessment, do you want the land excluded or not?” So the landowner says no. Okay, fine. You don’t get excluded. But here you have, then, a piece of land that we would have excluded based on its suitability for agriculture, and yet it remains in the ALR. And you’re saying no, that’s not the way it works. Well, that is the way it’s working.

[1405]

Then I stop and say: “Okay. Here we have a boundary review going on in zone 2.” We know the purpose, historically, in boundary reviews is to have a hard line on the ALR — the hard boundary so that you avoid the speculation on land that may or may not be suitable for agriculture. You’ve determined it’s suitable. You have the hard line. That’s the purpose for the boundary review — always has been and, apparently, may not be anymore.

Here we are in a boundary review that is leaving us and the ALC open to exclusion applications. This should never occur after the review has been completed. We’re leaving ourselves open for exclusion applications forever as the land passes through different owners.

What is the purpose of doing a boundary review if you’re not trying to make the ALC, and the work it does, more efficient?

Hon. N. Letnick: Thank you to the members opposite for the questions. Let me go through the process again because maybe I’m not articulating it well enough.

The review would be done by the Agricultural Land Commission, looking at the lands particularly in question in an area. So far we’ve had two areas. Once the review is done, some parcels would be identified that could potentially come out of the agricultural land reserve. No decision has been made that they should or they shouldn’t. No decision has been made on their agricultural value to the ALR or to the province yet. It’s just they are parcels that have been identified.

Then they go to the public hearing. At the public hearing, the public can then provide some input as well. After all of that is done, before a final decision is made and a decision is made public by the land commission, it has to, if this passes, get the consent of the property owner.

It’s my contention that the land commission, if this passes, at some point in the process — maybe earlier than after the public hearing — would probably go and ask the property owners if they want to be considered for removal from the reserve. I just think it makes effective sense for them to do that, but I’m not going to tell them to do that. That’ll be up to them. That’s how I see the process working.

[1410]

As far as the issue of the land reserve and boundary reviews and applications, in the past — the hon. critic has gone through the history of the agricultural land reserve and the boundary reviews — we’ve had boundary reviews in the province in other places. It doesn’t stop an applicant from applying to have their land included, excluded, non–farm use and all the other applications they can make to the land commission.

We hope, and I think everyone in this chamber hopes, that with another set of boundary reviews, it would tighten up, as the member says, what we have in the reserve and make it clearer for property owners as to what the Agricultural Land Commission of the day believes should be in or should be out.

But things change. Dynamics change. Communities change. Part of the funds that are going to the Agricultural Land Commission, the $4.5 million, is to help them communicate even better with local governments, with local communities, and work on their community plans earlier in the process so that they can see if there are opportunities to serve agriculture but also serve local communities.

Just because a boundary review is done, it doesn’t preclude people and communities from coming forward and saying, “You know what? You did a boundary review five years ago, but I’d still like to apply for inclusion” — or a non-farm use or an exclusion.

Again, it really comes down to the argument that some are trying to make that this will be harmful to agriculture. I am saying, as the minister, I don’t believe in that argument. I believe that it’s very possible to respect the wishes of, probably, a minority of people. Obviously, for the majority who are in the reserve, they can, potentially, see some opportunities for their land that they might not

[ Page 13066 ]

be able to see in the reserve and might be very happy with the decision of the commission to exclude.

But there are some…. I mentioned already the example brought to me by the member for Columbia River–Revelstoke where a senior would see an increase in their taxes for being removed from the reserve basically against his or her will. I have sympathy for that. Since this is not going to have any significant harm to agriculture in British Columbia, I’m proposing, and the government is proposing, this change in legislation.

V. Huntington: I just want to make one thing clear. I’m not necessarily saying that this is going to be bad for agriculture or bad for the ALR or the ALC. I don’t think the critic is either. What I am saying is that a boundary review should make things simpler at the end of the day. It should create efficiencies for the ALC at the end of the day. But here we’re looking at putting ourselves in a paper bag. You can punch it out whenever you feel like it, because somebody says: “I want this tax status.”

You can worry about things like the seniors in a different way. You can treat them like the second farmhouse or the farmhouse where the original farmer’s family wants to have an additional farmhouse on the land. Or you can even have those three at some point if the original farmers want to live the rest of their lives on it. You can grandfather the tax status. There are all sorts of tools you can use to look after those exceptions.

What I can see here is abuse of the legislation. I’m just sorry that we’re opening the door of the agricultural land reserve and the ALC to that abuse when I think we could be making it so much more efficient, so much more reliable and so much more understandable.

L. Popham: Thank you to my colleague for making some excellent points.

It’s the integrity of the agricultural land reserve that we’re concerned about. The minister believes that somebody should be allowed to stay in the agricultural land reserve for tax purposes. We could have had the Finance Minister in here to come up with a different tax rate for those people that he’s worried about. I wouldn’t have a problem with that.

It’s the integrity of the agricultural land reserve that has a mandate and is governed by the Agricultural Land Commission. That’s the problem. As the Minister of Agriculture, I would think that you would be standing up as hard as I am right now, and my colleague for Delta South, to improve the integrity of the agricultural land reserve and not cast doubt on whether or not the land in the reserve is valuable for agriculture or not.

That’s been our whole problem. There is always a higher and best use for agriculture within the reserve in the minds of many who want to develop it. That’s the problem.

[1415]

My question is: has the minister had a conversation with the Agricultural Land Commission around this legislation?

Hon. N. Letnick: Without jumping to the second question, I’ll just say yes to the first question and wait and see what the second question is.

L. Popham: What was the conversation about? What did the Agricultural Land Commission think about this legislation? What were the conversations around this? Are they supportive of this legislation?

Hon. N. Letnick: They didn’t comment one way or the other on the legislation. They would be happy to see the details once the legislation is passed.

L. Popham: It has quite an effect on the commission. It has quite an effect on the agricultural land reserve, which they have been appointed, as an independent commission, to protect. So I would think there would be a consultation process with the Agricultural Land Commission.

Has the minister or the deputy minister not had any conversations with the chair of the Agricultural Land Commission?

Hon. N. Letnick: Yes, we’ve had conversations with the Agricultural Land Commission chair — all appropriate. We outlined what the policy intent was. The response was, quite clearly, it’s up to government to determine the policies, and they would live within the policies that government determines.

L. Popham: The boundary reviews that haven’t been released yet or haven’t been completed or released yet…. It’s good to know today and to get it confirmed that the Agricultural Land Commission could release that any time, including today. So I’ll make a request for that information.

It leads me to believe that, possibly, the boundary review work has been done to a point where a decision on all of the land within that boundary review has been considered for exemption or inclusion. If that’s the case and if, for some reason, it hasn’t been released yet…. Maybe the work is not done. But that information isn’t public. You can’t see it on line.

Although this would be in a different section, the transition period of this legislation is being backdated to January 1. Did the minister ask the commission to hold that report or that information back until this legislation was debated in this House?

Hon. N. Letnick: No, I didn’t ask them to do that. Of course, as I said before, we provided them with where we were going with this legal framework within which they would have to function. Whether they made a decision

[ Page 13067 ]

on their own to delay the announcements would be up to them. I never asked them to do that.

[1420]

L. Popham: Did anybody from the Ministry of Agriculture ask the commission not to release those reports?

Hon. N. Letnick: I’ve been advised that no one has asked them — from the deputy minister as well. They were advised, however, that the legal framework would be retroactive to January 1.

L. Popham: But if those reports were released…. If the decision had been finalized on a boundary review and it was released, say, today, before the legislation passes or comes into effect…. Say that report was released before January 1. Say it was released in December. This law wouldn’t apply to that boundary review. Is that correct?

Hon. N. Letnick: That’s correct.

L. Popham: Just for argument’s sake, if this report, the boundary review, had been dated December 31…. Say it is complete, and it’s dated December 31. This legislation wouldn’t apply. Is that correct?

Hon. N. Letnick: That’s correct.

Section 1 approved.

section 2.

L. Popham: I have an amendment I’d like to put forward on

section 2. The Chair has copies of that already, I believe, and the minister has a copy of it.

SECTION 2(b)(8) by adding the following section:

(

c) The Agricultural Land Commission may make decisions on each project individually based on the merit of the project.]

On the amendment.

L. Popham:

Section 2 refers to activities that would be allowed as far as agritourism goes. The Agricultural Land Commission already has a bit of a

schedule of what they can decide on. They’ve got activities that they believe are non-farm activities and farm activities, and they have a guideline that they can use.

The minister, in his description of this legislation, has implied that the cabinet will create a list of what can and cannot be done as far as agritourism goes, and that would be the guideline that the Agricultural Land Commission would have to use.

Now, I took

part in a lot of the tour that was done a few years ago when we were looking at the Agricultural Land Commission and the ALR. Overwhelmingly, the comments from the public were that they trusted the Agricultural Land Commission to make decisions on activities on the agricultural land reserve. They trusted that. They wanted the Agricultural Land Commission to be the ones to decide by application.

I believe that that’s where the decisions should lie. So as far as the government making a list of what should and shouldn’t happen, I really do believe that each project should be considered individually on its own merit so that the mandate of the commission can apply to each one of those activities.

That’s my amendment. I’ll let the minister comment on it if he wants.

[1425]

Hon. N. Letnick: I believe what the amendment is trying to do is say that the Agricultural Land Commission should, in the case of agritourism, as we’re discussing here, make all the decisions on a case-by-case basis, based on applications.

The intent of the legislation is to see, in certain circumstances, that an agritourism use would not have to go to the commission. Therefore, it’s completely contrary. It’s not an amendment. It’s basically overriding what the intent of the legislation is to accomplish. Therefore, I can’t support the amendment.

L. Popham: The minister can’t support that amendment because it’s opposite to what the legislation is saying. Could the minister tell me why he believes the legislation is better than the idea of the amendment I put forward?

Hon. N. Letnick: Thank you to the member opposite. We do already have a list of events that happen in the agricultural land reserve that don’t require an application to the commission. Farm festivals would be an example, right?

The purpose of the amendment, as I see it, would force all uses to go to the Agricultural Land Commission for permission. That’s contrary to the act as it is now, contrary to the intent here, whereby in certain circumstances, we are saying that given the right regulations, a farm owner, a property owner, would not have to seek the permission of the commission to do the particular use.

V. Huntington: I have two further questions on

section 2. The first is to sub (a). I find paragraph sub (

a) very interesting in that a lot of time and wording and complication is given to the whole issue of consent.

Could the minister tell me what his officials and he are thinking in terms of the narrowing of the appropriate forms of consent? In

section 1, consent must be given in writing, which, to me, seems simple, efficient. No red tape. This government hates red tape. No red tape. Subsection 2(

a) is nothing but red tape around the issue of consent. I’d like to have a very clear under-

[ Page 13068 ]

standing what the government is attempting to do and require here.

[1430]

Hon. N. Letnick: Thank you to the member for Delta South for the question — a nice part of the province, by the way. I really enjoy Delta.

Interjection.

Hon. N. Letnick: And important too — yes, of course.

This is based on legal advice, first of all. I’d just like to say that. The first one, “establishing procedures and requirements in respect of the consent,” is standard phrasing in all these. The second one, “respecting circumstances in which an owner is deemed to have consented to an exclusion,” is, again, legal advice, because you might have asked someone for consent and not received any response back. We need to identify when it’s deemed that they’ve provided either consent or non-consent, right? It’s like deemed disposition in the case of taxes.

Interjection.

Hon. N. Letnick: Check mark, she says. Very good.

And for “(iii) respecting exceptions to the requirement for consent” probably the best example I can give where we might say you don’t have to give consent is Crown land.

The Chair: Hon. Members, before we go on, the question is: shall the amendment, as proposed by the member for Saanich South, pass?

Amendment negatived on division.

V. Huntington: I thank the minister for that answer. On to subparagraph (b). This is interesting, too, because it starts to move into local government bylaws on the ALR. I’m going to just jump to what I think is the kernel of my concern here.

Is this subsection (b)(8) in any way related to providing a planning framework in which non-farm uses can be made on agricultural land if they take into account the three — (i), (ii) and (iii)?

Hon. N. Letnick: Thank you to the member opposite for going to the nub of the issue. She has honed in exactly on the intent here.

If you look at

section (b)(8), it really talks about farm uses and non-farm uses for both. This is standard language that you can find in other places in the act. If I could just put aside the legalese for a second and explain it as to what we’re trying to achieve with this.

As the member knows, there has been a lot of discussion about agritourism — in particular, weddings on farmland. Currently, if you want to hold a wedding on your own farm, go ahead. You don’t have to apply to the commission for permission. But the commission has made it very clear that if you are going to be using farmland in the ALR for commercial weddings, continuous, you need to apply to the commission for permission.

[1435]

What we’re saying with this is that under certain situations…. I’m not going to identify what all the regulations are going to look like, at this point. But in limited circumstances, we believe that you don’t need to apply to the commission for permission for holding weddings on agricultural land.

We’ll identify what those conditions are in the regulations, but this gives us that ability to then create those regulations that would then articulate that if you pass these conditions — and, by the way, we’re sure to include the ALC when we discuss what those conditions are — you won’t have to apply to the commission for permission. That would help the commission get on to the other applications that it has to deal with that it believes are priority issues.

Sections 2 and 3 approved.

The Chair: Shall

section 4 pass? So ordered. Shall

section 5 pass? So ordered.

Interjection.

The Chair: Okay. Thank you, Member.

We’ll go back to

section 4.

Hon. M. de Jong: Right. I think the discussion we had was to stand down sections 4 to 10 and deal with sections 11 through 19, I think it is, and then return to sections 4 to 10. The committee has the authority to stand sections down. It can’t pass them pre-emptively, but it can stand sections down — 4 through 10.

The Chair: Okay. I believe that both sides of the House agree that

section 4 to

section 10 inclusive stand down.

Sections 4 to 10 inclusive stood down.

The Chair: Now we are on

section 11.

Hon. M. de Jong: That should prompt the arrival of some folks.

The Chair: We’ll wait for two minutes.

section 11.

S. Chandra Herbert: We’ve moved into a

section of the bill focusing on the film, TV and visual effects industries — industries very important in my constituency and,

[ Page 13069 ]

of course, very important to the health of the provincial economy and our culture too.

I’m curious if the minister might speak a little bit about

section 11, about what he’s trying to amend here and for what purpose.

Hon. M. de Jong: Thank you to the member and members of the committee for accommodating the differing order.

We’re joined by Paul Flanagan to my right, David Karp and Mark Gunther over on my left.

[1440]

This particular

section of the sections that we will be discussing relates to the

definitions. In the first instance, the definition of “eligible activities,” really, is more about improving the readability of the legislation. I don’t think it would be fair to say that it’s intended to effect any substantive changes to the legislation.

That is not the case with respect to the second amendment. The intention here is to ensure that with respect to a television series or episodic television, it’s clear that a “cycle” of episodes — and that is the term that, I’m told, the industry uses — is treated as a single episode for purposes of determining the tax credit that’s applicable.

Practically what that means is, insofar as this package of legislation, there is significance around the date of October 1, from a transitional point of view. If principal photography on the first episode has begun prior to that, the cycle of episodes is captured by that applicable rate. Absent this amendment, that would not be the case.

S. Chandra Herbert: Thank you for that description. So basically, the understanding is that if you were doing a series — as we are lucky enough to have a number of series shooting in B.C. — the tax rate that they are currently under and the tax credits they currently get would continue into the future, as more episodes occur. That’s my understanding. If that’s incorrect, the minister can correct me.

My question. Some films have sequels. Some TV shows seem to be more like films. Would this potentially also apply to a film sequel, which could arguably be an episode, as I know some of the bigger films are seeming to become the melding of film and TV? That seems to be happening more and more as people are watching films on iPads or computers and not necessarily the same cable stations that they used to.

Hon. M. de Jong: Two things there. With respect to the episodic television, the member has it correct, I believe. But it relates to the cycle. It doesn’t continue in perpetuity. If there’s a third, fourth and fifth season, it covers what I’ve always thought about as the season of episodes or the cycle of episodes.

In the second case, with respect to a feature film sequel, the existing rate today would only apply in circumstances where principal photography for the sequel had commenced prior to the transition date. If the sequel is only in the planning stages and doesn’t commence photography until sometime next year, then the new rate would apply to the sequel.

Section 11 approved.

section 12.

S. Chandra Herbert: This section, to my understanding, reduces the tax credit for digital animation, visual effects post-production tax credit — sometimes, I believe, referred to as the DAVE tax credit — from 17.5 percent to 11 percent.

My question. I’ve heard from people in the digital and visual effects world that the 17.5 percent credit we gave was still not as competitive as what was provided in Quebec. So we’re actually moving farther away from being competitive with Quebec’s industry by reducing it to 11 percent.

Can the minister help me understand what the competitive gap is now, at the 11 percent rate, between B.C. and Quebec? What financial accounting, what analysis has been done? How big is the gap now between us and Quebec, as it relates to a DAVE-style tax credit?

Hon. M. de Jong: Firstly, the first part of the member’s

preamble to his question was correct. And then, at the tail end, he referred to an 11 percent rate, which is not illogical given the language in the section. I do want to emphasize, though, that the rate…. It is why, at the time we announced all this and tabled it, I made clear what the intended rate is.

[1445]

The

section creates a range. We have tried to be forthcoming about where the effective date we will select…. I would say this. The legislation we’re dealing with is a bit difficult to read and a bit clumsy, in the sense that it is a composite of the introduction of the credits some time ago — in ’98, I think — at a certain rate, and then over the years, the rate has changed.

The construct here — not necessarily perfect…. It’s to peel back all of the subsequent amendments since that time to the original level, and then provide the government of the day with the option of increasing it up to a certain amount.

[R. Chouhan in the chair.]

The member is correct. We are proposing, as at October 1, to increase it to 16 percent, which is actually, de facto, a decrease from the 17½ percent rate.

In the conversations that we had with the sector, they indicated to us two things. First of all, to the degree that they recognized we desired addressing the growing

[ Page 13070 ]

amounts that were being paid out, it would be fair to address both the production credits and the DAVE credits. They communicated to us that although this is a slight reduction downwards, in this particular case, they felt they were still competitive with competing jurisdictions.

I think the member mentioned Quebec, and I think he is correct that that would be the jurisdiction that would attract the most attention. I can get the member the rates for Quebec. I don’t have them here, but I also will not quarrel with the member’s assertion that we have adjusted the rate downward slightly, which will increase that gap.

S. Chandra Herbert: Certainly, I could look up the rates on line for Quebec. It wouldn’t be difficult.

The real question is…. The minister was provided with expert advice from people in the industry, who I understand would have gone through typical productions, planned it out — as to what would happen if the rate was here; what would happen if the rate was there. I know there was a fair bit of back and forth with the ministry around this question, which I appreciate.

I think it’s a good idea that an industry be consulted, particularly one where these credits do make a big difference and one where, if you adjust a number slightly one way or another, you can create conditions that you might not expect to be creating.

Is the minister willing to provide me with an analysis of what the 16 percent rate compared to Quebec’s rate would be, in terms of what kind of financial gap exists between the two? Surely, the ministry would have that, as they want it just as much as I do, I think, to make sure that we remain competitive.

Hon. M. de Jong: I’m reminded, first of all, that we did take a lot of time to consult with the industry, which did conduct an analysis on a hypothetical production, and the industry alerted us to this. You’ve got to be a little bit careful about trying to do an apples-to-apples comparison.

For example, in the case of television series production, the situation here is very different than it is in Quebec, with respect to French-language television series and the markets that are available for that.

[1450]

What I can say to the member…. I don’t want to pretend they’re given something that doesn’t exist. The industry undertook an analysis, particularly with respect to the DAVE credits, and advised us that they felt that they remained on a competitive footing at the 16 percent rate. We have obviously responded in the way that we did and have accepted that at face value.

S. Chandra Herbert: Some industry folks I was speaking with the other day said, metaphorically anyways, they felt that the DAVE tax credit cut would have led to people dancing in the streets of Montreal. Now, maybe they were already dancing in the streets of Montreal. They do all sorts of things there. It’s a beautiful city.

To be serious, their concern was that while we will maintain business, we will not continue to grow the business — the concern being that a new investor looking to invest would decide to go to Quebec or, they said, potentially Ontario before choosing here, due to the tax credit gap.

I think we’ve got great talent here and some of the best studios here, for now. My concern would be that I think we should be growing the business, not keeping it flat or potentially reducing it and having folks leave to other jurisdictions.

If it is possible, I’ll ask once more: what does the gap look like? I know they have different funding formulas for TV, etc., over there. I’m not asking about those programs. But specifically, if we were looking at a tax credit, if you just stripped away the other programs that exist and looked at it on a basis, how big is the gap between us and Quebec, or between us and Ontario? Is it a difference in terms of price? You save 1 percent if you do your DAVE work in post-production in Quebec? Is it a 10 percent difference in terms of the actual value to somebody?

I just want to get a sense of what the ministry thinks the gap is. Some in the sector think it’s too big.

Hon. M. de Jong: A couple of things. The member mentioned Quebec and Ontario. Of course, as we have seen in Ontario already, rates have been adjusted downwards. Who is to say that that won’t follow in the jurisdiction in Quebec?

I’d be a little bit cautious, of course. We’re talking about one aspect of this, but the credits are calculated on a different basis in those jurisdictions. Certainly, the production credits are. They include more than…. They include overall production costs, as opposed to labour costs. So it’s not an apples-to-apples comparison.

Maybe the best thing I can do for the member…. This will give him a measure of comfort. I certainly have no qualms. We’ll contact the authors of the analysis that we were provided with. I’m happy to provide it to him, but we’ll check with the authors to see if they have any concerns about that.

S. Chandra Herbert: That would be very helpful. I really would appreciate that.

I wondered if the minister might be able to, at this time, share who at least is willing to be publicly named whom he consulted with through this process.

Hon. M. de Jong: I’ll read out some names. But I also do want to highlight for the committee that from time to time other people would have been drawn in by these folks and would have been consulted, in terms of the main body: Liz Shorten, Peter Leitch, Cheryl Nex, Michelle Grady, Crawford Hawkins.

[1455]

[ Page 13071 ]

All of those were involved, and then there was contact made with others with specialized expertise in the industry. If the member’s question is about a core group, there’s kind of a core group.

S. Chandra Herbert: They’re certainly very well informed people who have got their fingers in just about every part of the industry or know people who do. I’ve learned a lot from them, personally, as well.

I wonder. Why are we looking to put this into regulation as opposed to legislation, in terms of what the credit rates are?

Hon. M. de Jong: Two reasons — one really practical, but I’ll begin with the other.

Some of this derives from fairly rapidly changing circumstances around currency. I think everyone acknowledges that. So the ability of future governments, were that to occur again….

I think one of the comments that the member probably heard from someone in the industry was: “If the dollar goes back to $0.95, you can be sure we’ll be knocking on the government’s door again.” That is establishing the range. I will say this. Quite purposely, it is not limitless. It exists within a range. You can’t go below a certain amount without coming back to the full House, and it can’t go above a certain amount without coming back to the full House.

That was maybe the primary reason for the structure. The other thing was that it actually allowed us more time to talk to the industry. The member may know that we, and I, try to get legislation into the House in a timely way. This bill, candidly, was awaiting resolution of this, and this was a way to continue the discussion and finalize the bill so that the House could consider it in a timely way.

S. Chandra Herbert: I certainly appreciate the desire to consult, to move quickly. I think the challenge here is that, as the minister will well know, there have been other jurisdictions which have just disappeared their tax credits overnight, seemingly, through sometimes legislation, sometimes regulation. Legislation takes longer. You have to have the full debate, where regulation can sometimes avoid that and avoid the need to be really public, in some ways, about what you intend to do.

I appreciate that there is a range of credits here that the minister has said could be decided by regulation. I know that for people in the industry, certainly when I’ve talked to them — whether it’s here in B.C. or when I had the opportunity to meet with producers down in Hollywood — certainty is very important. Knowing that a government has a rate set in law certainly is more certain than if it’s a rate that’s set in regulation, which can be changed overnight. I would prefer, generally I think, at least when it comes to these rates, to be in legislation as opposed to regulation, but I can understand the argument the minister makes.

I do have an amendment to this section. I’ll explain before I move it. What I’m thinking here is…. I want to say that I appreciate that the industry was involved this time — that there was consultation, that there was discussion, that they were at the table. That hasn’t always been the case for a number of government decisions — for any government, really. Some governments believe it’s important to consult; others don’t.

As we saw in Saskatchewan, as we saw in Ontario, the lack of proper consultation can have pretty disastrous effects. Ontario. When they cut their tax credits, which the minister referenced earlier, they didn’t really think it through as much as they could have if they’d had experts there to guide them.

So you had trade publications…. I think it was the Hollywood Reporter, the front page, a big picture of Canada, a maple leaf, maybe a beaver thrown in for good measure — I’m not sure — with a big sign saying: “Stop.” Basically: “Don’t come to Ontario. Stay away.” That was just because of the clumsy way they handled the tax credit cuts in Ontario because of a lack of consultation.

[1500]

I would like to propose an amendment to

section 12. The amendment reads:

Section 12

By adding the following amendment:

(

f) by adding the following subsection:

(12) Before changing the prescribed rate under subsection (10), the Lieutenant Governor in Council must

(

a) Provide the public at least 90 days’ notice of a proposed change,

(

b) Consult with all the industry representatives that the government considers will be affected by the proposed change, and

(

c) By considering any comments provided during the consultation process before taking the action.]

On the amendment.

S. Chandra Herbert: I move this. I know the minister can say, “Well, in this process, they did talk to people; they did consult,” so some may argue that this is redundant. But I move it because I don’t think it is redundant. In fact, I think the process that was followed is the correct process. There was consultation. People did send in their thoughts. There was some back-and-forth. It happened fairly quickly.

I think that should just be a matter of course, as opposed to a matter of whim or good intention. Intentions are good, but as the minister well knows, if it’s not in law, sometimes good intentions can be forgotten and not followed through.

I think this would be a good thing for the industry and certainly a good thing for future credit changes that may have to happen. There are lots of good ideas about how we can structure tax credits for film and TV and digital effects in B.C.

Hopefully, the minister will find this amendment to be friendly to what he’s trying to do here. It’s just good

[ Page 13072 ]

governance that we should always follow, which is to talk to people before we act in ways that may impact them.

The Chair: The minister on the amendment.

Hon. M. de Jong: I think I understand the spirit of the amendment. Clearly, the member, I think, will accept that I share his view around the value of engaging directly with those impacted and affected, which is why we followed the process we did.

A couple of things with respect to the body of the amendment itself — which is intended to become part of the law. I wonder…. Well, I don’t really have to wonder, based on the conversations we had. If suddenly, within a two- or three-week period, we arrived at a point — it’s not as if this hasn’t happened — that the dollar appreciated by 20 points, my guess is that we, or whoever the government is, would have the industry on their door saying: “We don’t want to wait three months. We’re going to make decisions now about the production season.”

I will say this in partial support of what the member has said. I think the industry views the regulatory component of this as both positive and potentially negative. In the right circumstance, used in the way that the industry favours, they see it positively. The comment I received from one is: “We view this positively because it gives the government flexibility, which is the same reason we view it negatively.” Nonetheless, I think in certain circumstances, they would want the government to consult and move more quickly than over a three-month period.

Practically, as well, we did as best we could in consulting with the industry and also trying to move in a timely way. But the member has already established that…. I would not attempt to leave the committee with the impression that we managed to speak with every single person. We found what we thought was a broadly representative group of folks and leaders within the sector.

[1505]

The amendment would require consultation with all the industry representatives that the government would consider affected. I don’t want to be cute about this. It might be possible to manufacture something that qualified.

I guess what I’m saying to the member and the committee…. I’m not dismissing the spirit, but I’m hesitant to lend support to the specific amendment before us. But I think the member has effectively highlighted his view — and it is one that I share — that in exercising its authority under the provisions that the House may pass here, it should only do so after having consulted extensively with the industry.

S. Chandra Herbert: I appreciate the minister’s thoughtful response. I easily could have written the amendment to say “consult with industry representatives,” rather than “consult with all the industry representatives.” I can understand how it would be difficult to do such a thing, even though, I guess, with the Internet and so on you could put out a request for thoughts, and if people chose not to respond, that would be up to them.

But I can understand the minister’s concern that by making it law, arguably somebody could say, “I wasn’t consulted, and the law says everyone should have been consulted,” and there could be challenges that way. That certainly wasn’t the intent of the amendment, and I know the minister didn’t take it that way.

I appreciate that the minister agrees with the intent of the amendment, even though he doesn’t support it at this point. I will say thank you for that. I think — certainly on the New Democrat side here and, I understand now, on the government side — that there is an intent that should any changes by regulation come to these tax credits, there will be a consultation process, sometimes faster, perhaps, if the need be.

Although what I’ve come to understand with producers — some of our biggest customers — is that because the union environment in B.C. is so connected with the industry, they work very strongly together, they have a strong sense of consistency, they partner. It’s a secure and predictable environment for investment in the film industry. So far, anyways, governments of both stripes have been fairly supportive.

I would argue that in some cases, the present government doesn’t go far enough in terms of supporting the industry. The minister has heard my remarks, in that sense, more than a few times, particularly on the domestic side. But I can appreciate where the minister is coming from on this.

I will be voting in support, obviously. I moved the amendment because I wanted to make it clear that the intent is that we should be doing this. I can understand why the minister may not choose to support that at this time.

I certainly would urge him, in future legislation, to consider making a requirement that consultation actually occur. I think that would give people a sense of some certainty. At least they’d get a chance to be heard,

whereas in other jurisdictions that hasn’t always been the case.

Amendment negatived on division.

Section 12 approved.

section 13.

S. Chandra Herbert: Could the minister discuss what he’s trying to accomplish with

section 13 here?

Hon. M. de Jong: We were just discussing the DAVE credits. This is the comparable

section for the production services tax credit. In similar fashion, it peels back the various increases that have occurred to the original amount from 1998 and then creates that range between

[ Page 13073 ]

that amount and 33 percent. The similar rationale applies here to what we discussed under the previous section.

[1510]

S. Chandra Herbert: Of course, the concern with this is that by reducing the credit — as the minister mentioned, and certainly I have numerous times — if the dollar goes up again, we could be back into the same situation we were at in 2013, with huge job losses, people coming forward sharing their stories about how they’re concerned they can’t pay their mortgages and those kinds of things.

I understand why the minister is doing this, given that Ontario has reduced their credit, as well, a little bit, although I would argue that Ontario, at least in terms of tax credits, is still more competitive than we are in B.C. We’re more competitive, I would argue, for locations, crews, proximity and so forth. We’re certainly doing well on that side.

Again, I guess, a similar question to what I asked about the earlier

section is: would the minister be willing to have his staff or some of the experts that he consulted with help me understand how big the gap is with Ontario in terms of the difference in competitiveness? I know they have an all-spend versus we have a labour tax credit, which is different. However, if you compare the cost savings to a production….

You can start to look at how big a cost saving is to a production when you look at the entire budget. You just run the numbers for those entire budgets. It would be helpful. Is it a 25 percent savings if you shoot in Ontario versus a 20 percent savings or a 15 percent savings if you shoot in B.C.? What’s the difference?

Hon. M. de Jong: I think, again, the best way and what might be most helpful for the member is…. I’ve confirmed that a similar detailed analysis was done by the working group and by the industry. Again, I’m more than happy to provide it to the member. I’ll just check to ensure that there’s no objection on the part of the authors.

I guess the other thing I’d point out is that the success that we and the member and the industry itself boast of continues. The member hasn’t asked, but I should, at some point, I guess, put on the record…. The desire to address this didn’t actually derive entirely from what was happening in another jurisdiction. It was as we watched the amount, which is indicative of success, grow.

At one time, people looked at $200 million in tax credits, taxpayer money that is being paid out to an industry, and viewed that as a tremendous sign of success, which it was. Then it went to $250 million and $300 million and $350 million and $400 million. It was headed…. It may yet hit half a billion dollars.

The conversation with the industry really started on that basis. The government, on behalf of the taxpayers of British Columbia, wants to be a partner and support the industry, support growth in the industry. But there is a limit beyond which we think it is unfair to other sectors of the economy to go. It was on that basis, and the consultation took place.

I do, actually, take a measure of comfort and pride in the work that our team achieved. I mean, it’s a conversation the industry probably would rather not have had, but they did. And we arrived at a place where the industry itself felt comfortable saying: “We can continue to grow. We can continue to prosper. We can continue to attract production activity. We are content that our views have been heard.”

I think, in part, we learned a lot more about the industry as part of the discussion. We learned about aspects of productions and how they’re structured and how the planning process and production decisions are made. It really did influence the outcome and transition dates and

definitions. All in all, positive.

I think the taxpayers…. People who are engaged in the industry I hope will feel that this is respectful of their success, and people outside of the industry I hope will view this as a sign that the government accepts that we have to be fair to them also.

[1515]

S. Chandra Herbert: Many in the film and TV industries come to me and say quite strongly that they don’t agree with a characterization that they feel has been made by government — that they are a cost to government, that they are getting subsidies, that they are somehow taking away money from health care and other sorts of things.

They would argue that either the investment comes in because of tax credits or, if the tax credits are gone, the investment wouldn’t come in so you wouldn’t make any money because there wouldn’t be any of those jobs there — and that, in fact, what they bring is a net gain to the province. I agree that it’s a net gain to the province — tens of thousands of jobs, so many spinoff effects. It’s really quite a good industry, I think, for B.C.

What sort of analysis has the government done to determine that the current $500 million — I think, the minister threw out there — is the limit, that we shouldn’t be going too much higher than that?

People in the industry will say: “Well, if we get to $750 million in terms of tax credits that are going out, that just means there are way more jobs, and that just means there’s way more income tax, way more PST, way more property tax, way more money being invested in B.C. with more spinoff jobs, etc.”

They’re arguing that if the model works at $200 million that people are proud of, that’s a certain set of jobs, and if you get to $400 million, that’s effectively twice as many jobs. Why would we be upset that we are growing the amount, as that just means that the economy is growing for the film and TV industry?

[ Page 13074 ]

I’m trying to understand the difference here about when it becomes a cost, according to the government, as opposed to when it is a benefit.

Hon. M. de Jong: Let me, first of all, say clearly that I accept absolutely the proposition that the success of this industry translates into multiple layers of success. There are benefits — some of them quantifiable, some of them not so easily quantifiable.

It’s also why I will candidly admit, in my view, there is a point…. I’m not sure this is a science as much as it is a sense and an exercise in expression of the government of the day’s view of where that balance is and the Finance Minister’s view. I and we are accountable for the exercise of that judgment.

It is a refundable tax credit. I say this not to impugn at all. It’s the way it was set up. It has persisted for the last 15 years under this government and the government previously. It’s a spending program in the sense that it is not related, as non-refundable tax credits are, to profit or the payment of other taxes. It doesn’t operate to reduce the tax burden of the beneficiaries. It is paid irrespective. That is a fact.

I feel obliged to point out that in other circumstances, reaction from observers, pundits and political adversaries has been very different when we are talking about tax credits in other circumstances. The oil and gas sector, the petroleum sector and the energy sector would make a very similar argument — and have. Yet the reaction to that has been very different from the quarters. How on earth could you reduce the tax burden or provide these incentives?

I accept that there are very real benefits that accrue. I accept also that the industry can be very mobile.

[1520]

One of the benefits that we see now, as infrastructure is developed, is there is an added attraction as the digital effects, visual effects, industry has grown. It tends to draw work from all over the world. The talent and infrastructure is located here and is less dependent on location activities.

I think, at some point, there is a limit. Virtually every sector of the economy — whether it’s the forest sector, the agrifood sector, the energy sector — would make the argument the member is making. “If you simply give us a similar program, we will do better.” The reaction in the past from some of the member’s colleagues has been very negative, depending on which sector of the economy we are talking about.

I accept that the member has been a great proponent of the film production sector. But if we apply the logic elsewhere in the economy, he and I both know the reaction would be, from some of his colleagues and others around B.C., very, very different.

S. Chandra Herbert: I understand that, yes, there are decisions, values, etc., that are made in terms of how tax credits are used and where governments put their priorities. The minister said maybe it’s more of an art in terms of deciding where the tax credit goes and how much it is.

I guess the question, though, is really…. He had stated that once it was climbing to around $500 million, he became a bit more…. I don’t know if he said “nervous” or just thought it deserved a look.

I’m trying to understand, really. What if next year we get $600 million worth of business in terms of refundable tax credits? Is the implication, then, that we need to cut the credit further because we have too much business? Too many people are investing in B.C., so we should reduce the credit further so that fewer people invest in B.C.

I think the minister can see where I’m going here. It’s a question for me. I understand we want the best value for taxpayers and to be ensuring we get the most that we can — the most jobs and the most tax revenue, in this case — so we don’t have to refund as much. If we can keep the same level of jobs we have and continue to grow them, then sure, I can understand why people would support that.

I think the question, though, is…. If we continue to grow the number of jobs, because it’s a labour-based tax credit, that will continue to grow the labour tax credit amount that has to be paid out. Some may say: “Well, why would we be harming the actual industry, which is doing so well, and trying to cap it?” Some would argue what the implication is here is that the $500 million limit seems to be how big the minister, arguably, wants the industry to grow. It could be.

Now, maybe that’s not the case. Maybe the minister is okay if it gets to $600 million or $700 million if we continue to attract investment. I’m just trying to understand where the minister is coming from here with this.

Hon. M. de Jong: I’m not sure this is widely known or known by the member. Two things were happening, both of them relevant to the conversation we’re having and the conversations that took place leading into the budget in February.

One, quite admittedly, was a concern on my part and the government’s part with the forecasts for the significantly growing amounts. The other, and this may not be known by the member, was the industry itself. It was representatives of the industry that contacted, to their credit, the government, I think in part because of something the member mentioned earlier. They saw the pendulum swing very dramatically in other jurisdictions, not in the way that it’s been recalibrated slightly here but from credit to no credit.

To their credit, I think the industry here is a little more sophisticated than that and understood — again, to something the member said earlier — the importance of stability, predictability, our reputation for stability. All of that is important.

[1525]

[ Page 13075 ]

We took that very, very seriously with respect to the transitional dates because we accept the proposition that certain planning and production decisions were made on the basis of a set of expectations. In other jurisdictions, changes were made that didn’t take that into account. We also accepted the advice that said to simply apply a cap would inherently place an element of unpredictability. Those were all features of this.

If, in spite of the changes we are considering today, production activity continues to grow exponentially, we will have a definitive answer to the question of whether or not we are still competitive. The member and I can attempt to cross that bridge of success when we get to it.

S. Chandra Herbert: Thank you, Minister. I think that’s helpful.

Certainly, many people that I know in many communities across B.C. would dance for joy if the industry continued to grow at the pace it’s been growing, as there have been many new jobs created. They are very happy to see investments in communities all across this province, including in communities that have never seen a film shoot before, because the demand is high and we have so many great locations.

I appreciate that answer, and we can move on to the next section.

Section 13 approved.

section 14.

S. Chandra Herbert: If the minister could just explain the intent behind

section 14.

Hon. M. de Jong: Same methodology, same mechanism as we discussed previously, except in this case, it is the adjustments to the DAVE tax credit with respect to production services. So same construct, same rationale and same range.

S. Chandra Herbert: One question that people asked of me was: if we’re reducing on the foreign services side, or the production services tax credit, why don’t we slightly increase on the domestic side, on indigenous-based filmmaking, as an attempt, I would argue, to diversify our economy so we’re less reliant on the foreign services side and can have more domestic growth?

Certainly, Ontario seems to be, not monopolizing…. But they seem to have the vast majority of domestic production happening there. I want more of it here, because if the dollar goes up, that production continues. If the dollar goes down, that production continues.

This may not be the appropriate place for this question, but I couldn’t quite figure out where to put it in. I just wanted to ask the minister why we didn’t see an increase on the domestic side, since I don’t think we’re getting our share in this province.

Hon. M. de Jong: I think the proof that I and we tended to accept the logic advanced by the member is revealed in the fact that we didn’t increase it, but we left it the same. We did distinguish it from foreign productions. We may not have bestowed as extensive an advantage as the member is advocating, but we did enhance its competitive advantage by separating it out and leaving it the same.

Separate and apart from this, so I won’t dwell on it, we have tried to provide some support to other areas of the music production sector. The member knows that, in the budget, we carved out several millions of dollars to partner with the music industry to try and promote our domestic music talent and productions.

S. Chandra Herbert: Yes, I’m aware that the domestic tax credit has stayed the same while the foreign services has dropped. Unfortunately, that’s the same sort of thing that happened when the foreign service production went up in tax credits. The domestic stayed, I believe, the same.

[1530]

While, arguably, it’s more competitive now compared to the foreign service, it’s no more competitive than it was before in terms of competition with Ontario. We’re not lighting anybody on fire. We’re not changing the channel in terms of what people’s understanding is of B.C.’s domestic industry and the competitiveness and the attraction to producers who seem to primarily stay in Ontario. I want more of them here, and I know, in fact, we lost some of our B.C.-based producers to Ontario back in 2013.

I’ll continue to argue for support through Creative B.C. so that we can once again start actually investing in our domestic TV industry in a bigger way than we are now. Currently we provide less investment on the grant side or on the new production side for B.C.-based film and TV producers than we did in, I believe, 2005 — than, really, maybe ten or 15 years ago. That’s not even adjusting to inflation.

Just to leave that there. I don’t imagine I’ll get a response in the sense of agreeing with me right now and right here to do that, but I’ll continue to argue that our domestic side needs a lot more attention than it is getting.

Sections 14 and 15 approved.

section 16.

S. Chandra Herbert: Could the minister explain what he’s attempting to do here in

section 16?

Hon. M. de Jong: This particular amendment simply updates the definition of “mutual company” to refer specifically to the definition of “mutual fire insurance company.”

[ Page 13076 ]

It relates to amendments to

section 2 of the Mutual Fire Insurance Companies Act that we are about to come to. It’s a consequential amendment to the amendment to the Mutual Fire Insurance Companies Act.

S. Chandra Herbert: I must admit I’m not up to speed on the Mutual Fire Insurance Companies Act — what the overall intent is of sections 16 through 19, I guess it would be, in this bill and why the minister feels these are important to enact.

Hon. M. de Jong: Actually, the scope of this, I’m told, practically relates to really one operating company that was founded in 1902 in B.C. There are, under the existing

definitions of the Mutual Fire Insurance Companies Act, restrictions on the scope of business that they are entitled to participate in. Specifically, the company involved here is seeking to get involved in the property and casualty insurance sector. Their defining statute presently precludes them from doing that.

[1535]

The analysis is, and the government is comfortable, that they are competent and equipped to engage in that business and should be permitted to engage in that business. The amendment is entitled to facilitate that work.

S. Chandra Herbert: Does the minister know what the original intent was of not allowing a company like this to participate in other forms of insurance, exclusively sticking to the fire insurance field?

Hon. M. de Jong: The restriction dates back to a time when the statutes were somewhat more specific and prescriptive, going back to the early part of the 1900s. This related to a company that was involved in the agricultural sector and agricultural fire coverage.

This change would allow them to incorporate a subsidiary to engage in the expanded insurance work. Originally the statute was designed to regulate and address a narrow

section of the insurance business related to agricultural and fire protection for the agricultural farming sector.

S. Chandra Herbert: Well, on the surface it seems eminently sensible to allow them to engage in more than one form of insurance relating to agriculture and fires. I think it is sensible and supportable. Thank you to the minister for explaining that.

Certainly, some old laws that are on the books are very restrictive and have not kept pace, for sure, with changes to our understanding of how laws can be used and designed. So thank you to the minister for that.

Sections 16 to 19 inclusive approved.

[1540]

The Chair: We have agreed to continue to stand down sections 4 and 5, so we will now start with

section 6.

section 6.

G. Heyman: My first question for the minister is: why is this amendment to the Environmental Management Act being brought in as part of a miscellaneous statutes amendment act when we, in fact, had an amendment to the Environmental Management Act bill — Bill 21, if I recall correctly — before the House?

Hon. M. Polak: The work on the other amendment, which forms the basis of our land-based spills response, was a very separate piece of work — and, of course, quite sizeable — and so was handled separately in an individual act.

G. Heyman: So they were both contemplated or framed at around the same time, and it was simply a choice to separate them?

Hon. M. Polak: It reflects the very different nature of the two. The land-based spills response regime, as I think the member knows, has been through multiple years of development going all the way back to 2010,

whereas this work is really consequential to the ABMP that was developed for Elk Valley and makes it necessary to reflect those changes in the act itself.

G. Heyman: I’ll pursue this a bit further under

section 7.

With respect to

section 6, could the minister indicate what gave rise to this particular amendment that allows a director, after consulting with the minister, to “amend a permit or approval issued by the Lieutenant-Governor-in-Council”, or what specific situations the minister envisions this may be used in.

[1545]

Hon. M. Polak: It is truly housekeeping. The power already exists with respect to permits in general. This is simply including those permits that would be issued under an area-based management plan — so just ensuring that we have the same powers to manage permitting through an area-based management plan that we already did under the currently existing permitting system.

Section 6 approved.

section 7.

G. Heyman:

Section 7, in particular, causes me some concern. It causes some stakeholders and interested parties some concern. I certainly would have preferred, depending on the answers the minister may give to the

[ Page 13077 ]

questions that I pose, to have seen this either in Bill 21 or a separate bill rather than buried in a miscellaneous statutes amendment act. It appears to be hardly a consequential amendment or of no import.

It would appear that the amendments allow the minister, in relation to areas covered by an area-based plan, to overrule the statutory authority of the director in relation to whether or not to issue a waste management permit. It looks like the minister could force the issuance of the permit, impose conditions, and those provisions are not appealable to the Environmental Appeal Board. Does the minister think this

interpretation is incorrect or correct?

Hon. M. Polak: That’s not correct. The minister would be able to direct that permits be granted in accordance with the area-based management plan, but the minister would not have the authority to simply direct that permits be granted in any old way. They’d have to follow the plan.

In addition, it’s important to note that those permits under the area-based management plan would be subject to the same requirements around public consultation, First Nations consultation, etc.

G. Heyman: Could the minister assist me and others who have read this

section differently to see exactly where that requirement would be? I’m trying not to ask the minister to do everyone’s work for us, but sometimes it can be difficult to correlate amendments with the act.

There has been a lot of concern raised about the Elk Valley management plan and the role of cabinet with respect to that plan. The concern is that the actions of cabinet with respect to the Elk Valley management plan could now effectively be repeated through actions of the minister.

In order to support this amendment, I think we need assurances and very explicit demonstration of how the requirements of the ministry, if they issue a permit in the normal manner, to address all of the environmental concerns that exist and act in the best interests of environmental protection are not being lost by this transfer of power to the minister.

[1550]

Hon. M. Polak: This does not transfer power. Right now a director would not be able to issue a permit under the ABMP, because we don’t have that authorization in the legislation. That’s what this will do. The wording is “order a director to issue a permit under that

section authorizing the introduction….” and then it goes on to all the different sections, requirements, etc.

The minister doesn’t have the authority to set out what would be in the permit, what requirements there would be. This simply provides the authority to allow for those permits to be considered under the area-based management plan.

G. Heyman: The minister and I have had recently, with respect to Bill 21, quite a lengthy exchange around legal drafting, but the words say: “…the minister may, in writing, order a director to issue a permit under that

section authorizing the introduction of waste (

a) within a specified time, (

b) in accordance with any requirements or conditions, under

section 14 (1) (

a) to (f), specified in the order.”

Presumably that would be those specified in the minister’s order, not any other order. So I’m having a hard time seeing the reflection, in the language of the amendment, that corresponds with the minister’s claim that she has no power to order something different than a director would be required to under the act.

I would ask the minister to clarify this because it is not clear to me, it is not clear to environmental lawyers who have reviewed this, and there’s a lot of concern.

Hon. M. Polak: This is consistent with, and in fact it’s modelled on,

section 23 of the Environmental Assessment Act as it exists, which provides the authority to require concurrent approvals. It does not in any way step on the authority of the decision-maker.

I should also respond to the member’s question. Previously I forgot to. I was asked to point out where it was that the consultations for First Nations and the broader community would be required. That is under

section 1(2) of the Public Notification Regulation, and it would apply here as well.

G. Heyman: If the minister’s power under this amendment is not a power which allows the minister to override or substitute her opinion for that of the director, what is the purpose of the amendment?

[1555]

Hon. M. Polak: It’s important to note that enforcement is given life through permits. The permits set out the rules by which someone must operate their permitted activity. Without this amendment, there isn’t authority for the director to grant a permit under an ABMP. That’s what this is fixing.

In a context where we now have an ABMP, we need authority to grant permits that are reflective of that ABMP, not the regular permitting process. So this provides the authority for that, as well as what flows from that, which is the ability to enforce the permits that are granted through the ABMP.

G. Heyman: Why would the amendment…? If the purpose is to give the director the ability to enforce certain measures, why is it worded in such a way as to say that the minister may, in writing, order a director to issue a permit instead of simply giving those powers to the director? It’s impossible to look at this, at least for people who are concerned about protection of the environ-

[ Page 13078 ]

ment, whether it’s in an area-based management plan or any other way, and not make reference to the recent report of the Auditor General with respect to An Audit of Compliance and Enforcement of the Mining Sector .

If we look at the

summary on page 9, the report says that the Ministry of Environment “tracked this worsening trend,” which is dramatic increases of selenium in the watershed’s tributaries, “but took no substantive action to change it. Only recently has the ministry attempted to control this pollution through permits granted under the Environmental Management Act.”

It then goes on to say that they examined the Line Creek expansion permit, the area-based management plan and the area-based management permit “to understand how they support MOE’s responsibility to minimize risks to the environment” and found that the documents do not address several risks, including that “MOE staff, with input from external experts, concluded that the selenium levels in the proposed Line Creek expansion permit were not likely protective of the environment. The statutory decision-maker could not approve the permit. Subsequently the permit was granted by cabinet.”

In this case, the statutory decision-maker could not approve the permit, so subsequently cabinet, under

section 137, I believe, issued the permit. “This was the first time that cabinet had ever used this approval process. The rationale for the decision was not publicly disclosed.”

The belief, at least with environmental lawyers with whom I’ve not had as much time as I would like to consult, is that this is a perpetuation giving the minister the power to do the same thing. So that’s a matter of grave concern. I’m hearing the minister say, “No, that’s not what we’re doing,” and that will carry some legal weight in

interpretation of the act, but not as strong legal weight as clear wording.

Again to the minister. Given that sub (

b) says in accordance with “any requirements or conditions,” not “all requirements and conditions,” where does the language guarantee that permits may not be ordered by the minister to be granted that don’t meet the requirement of the ministry to protect the environment with respect to the issuance of permits?

Hon. M. Polak: I’m very glad the member raised the question in this way, because it makes the point that I’m about to make now. In that case, the decision-maker did not reject the permit and then have the Lieutenant-Governor-in-Council override it.

[1600]

You will note that the language says that the decision-maker did not issue the permit. Here’s why. There was no mechanism in place for the decision-maker, in spite of all the work that had gone into developing the area-based management plan. I know the member is familiar with just the massive volume of work that that was and the very complex nature of it. Because of the existing language in the Environmental Management Act, the decision-maker would not have been able, under that legislation, to issue the permit, in spite of the fact that the permit was absolutely consistent with the area-based management plan.

In an area like the Elk Valley, where…. We’re dealing with a very large geographic area. We’re dealing with long-term and very complex challenges with respect to water. For example, we know that selenium in the area is a legacy issue. This is from waste rock that the selenium leaches out of. We know that there needs to be an incredible amount of water treatment — nine treatment plants planned at a cost of about $600 million, paid for, by the way, by the company. The company also, of course, is taking over what essentially is a problem that developed over the 100-plus years of mining that was taking place there.

In order to address the selenium issue, a tremendous amount of work was done developing the area-based management plan, together with local environmental organizations, the Ktunaxa, Environment Canada, the state of Montana, the U.S. EPA — a cast of thousands. Finally, an ABMP is there.

Without this amendment, the decision-makers are still left in the position that they cannot issue permits that are under the ABMP. They can only issue permits as per the existing Environmental Management Act, which does not take into account the ABMP and the specific context of the Elk Valley, where this work is being undertaken.

G. Heyman: If I go back to the report of the Auditor General,

part 2, page 100 says that the Environmental Management Act states that the statutory decision–makers “may authorize a permit only if it includes requirements for the protection of the environment.” It states:

“Statutory decision–makers must be impartial and independent. They are required to make decisions fairly and in accordance with the applicable legislation. They cannot be fettered in the exercise of their statutory powers. They must make decisions independently, free from undue influence of any party within or external to the ministry.”

That is actually a quote from the report, which, in turn, is quoting the Ministry of Environment’s Statutory Decision–Making Handbook . It then goes on to say:

“Subsequently, a decision was made by government to approve the permit under

section 137 of the Environmental Management Act. This clause, which allows cabinet to approve a permit where it is in the public interest to do so, had never been used before. There is no definition in the Environmental Management Act as to what defines ‘public interest,’ but the act states that cabinet may consider factors outside the scope or mandate of the act. Cabinet did not provide the public or Legislature with the rationale for why the permit was in the public interest. This creates a risk that the public or Legislature will not be informed about what factors — economic, environmental, social — were considered in decision-making.”

The report goes on to say:

“We also found that the Line Creek expansion permit has a site performance objective for selenium that allows five times the amount set in B.C.’s water quality guidelines for aquatic fish. We concluded that government, in granting the permit, did not

[ Page 13079 ]

publicly disclose the implications these permit levels will have in this area, where the expansion will extend the life of the mine for an additional 18 years and produce an additional 3.5 million tonnes of coal annually.

“As well, we expected MOE’s permits to reflect the polluter-pay principle. We found, however, that under the Line Creek expansion permit, the mine company is charged only about $5,000 a year for emitting selenium pollution. This is not reflective of the known environmental impact of selenium.”

[1605]

It then goes on to say:

“MOE has stated that this increase in permitted level is necessary because of greater leaching of selenium from old waste rock.”

I think that’s the reference the minister just made.

“However, this permitted level was modelled based on data not only for historic sites but also for the planned expansion, which will see a doubling, by the year 2034, of the waste rock in the Elk Valley from 2012 levels.

“It is not clear how these high selenium levels will meet government’s objective to protect the health of aquatics ecosystems, groundwater and humans in the Elk Valley.

“The area-based management permit sets out the amount of selenium that the mine company is permitted to discharge in the Elk Valley. Rivers in the valley drain into Lake Koocanusa, which spans the Canada-U.S. border. The area-based management permit creates a risk that if MOE is unable to enforce the permit and the mine company exceeds its permit limit for selenium at Lake Koocanusa, the outcome could be a violation of the 1909 treaty relating to boundary waters and questions arising along the boundary between Canada and the United States — the treaty — that forbids the pollution of water bodies on either side of the border.”

That is the concern that has been expressed. The concern, in some ways, is light terminology in terms of the general tenure of the report from the Auditor General, which was, in many ways, scathing. But it questioned the appropriateness of the cabinet imposition of a decision to grant a permit and the inadequacies of that permit within the context of the usual role of the Ministry of Environment to take actions to protect the environment and water.

Again, it is not clear to me how this amendment clears up that particular concern or moves us further toward a regime of permitting that protects the environment, protects water or protects the other concerns with relation to selenium or Elk Valley — or how, in fact, this simply doesn’t extend

section 137 in a way that allows the minister to impose a similar decision.

I’ve heard what the minister says, and I’m asking the question in a number of ways because I think it is important to get her explanations of what this amendment really means on the record, in the event that cases end up in court. I am yet to be convinced that this is an amendment that I can support in good faith. The minister may be absolutely correct in what she’s saying, but for us to support this amendment, we have to be convinced that it actually enhances protection, not diminishes it.

Hon. M. Polak: I hope, then, what I’m about to outline will have the member feeling very positive about this amendment. I have heard the member — through reading the Office of the Auditor General’s report but also his own comments — express discomfort with the actions of government in terms of using

section 137 in order to pass that permit.

Having these new sections in place would mean that in a similar circumstance, that would not be necessary. Instead, the decision-maker would be able to consider a permit under the rules put in place through the area-based management plan. That consideration would involve public consultation. It would involve First Nations consultation.

I will take issue with one of the pieces of the Auditor General’s report. That is, while I’m sure it was simply an oversight, the Auditor General seemed unaware that the guidelines for this purpose had actually been developed over an 18-month process that was quite exhaustive, involving all the interested parties I mentioned before.

We certainly are concerned about anything that would damage our relationship with the state of Montana, with the U.S. government, and therefore they were involved with us in the development of the area-based management plan, both the state of Montana and the U.S. EPA.

The Auditor General is certainly correct that it would have been outside the scope of the Environmental Management Act. What the Auditor General did not consider is that it was well within the scope of the area-based management plan.

Now, I will get to the rationale for the decision, which I think is important, because very often when we’re discussing these, we’re trying to imagine what may happen in the future, what would be the basis for a decision.

[1610]

In this case, what was the public interest? We have rising selenium levels, and those are dramatic, as the member outlined. The choice was this. One could see the company continue to operate under the guidelines associated with the area-based management plan and, therefore, build the nine treatment plants, at a cost of $600 million — which, under the area-based management plan, will see selenium levels rise briefly, while we await commissioning of a number of treatment plants, then stabilize and then begin to go down over time. That is what the area-based management plan brings us to.

In the interim, though, if one is not able to allow that company to continue to operate, I would say the likelihood of a $600 million investment in nine treatment plants is not very great. In all likelihood, we would see no treatment. Of course, this selenium contamination is the result of waste rock. Therefore even if one shut down all the mining in the area, the selenium levels would continue to rise over time and that dramatically.

In a case like this that is very complex, that takes into account a large geographic area, it’s important to have an overarching plan that takes into account the cumulative effects, takes into account all manner of different factors that the environmental organizations, the First

[ Page 13080 ]

Nations and our other partner agencies felt were important. That’s as opposed to the limited scope of EMA, which only looks at the amounts coming out of the pipe and does not look at the broader plan that has been put in place in the valley.

This addition of these sections would allow the area-based management plan to then come to life in a proper permitting system, rather than the Lieutenant-Governor-in-Council having to issue those permits because they were outside of the narrow scope of the Environmental Management Act.

G. Heyman: For further clarity, let me ask the minister to confirm or not confirm for the record, because I think this will be very important in future

interpretation of the amended act, if the bill passes….

Section 90.1(1)(

c) says: “subject to other requirements or conditions, under

section 14 (1) (

a) to (f), the director considers advisable for the protection of the environment.”

Would it be correct to interpret this subsection to mean that no matter what the minister orders or does not order under subs (

a) and (b), the director will be bound, by the requirements of the act, to put protection of the environment foremost, to add any other conditions that the director believes are necessary to achieve that purpose — and that the minister cannot override that?

Hon. M. Polak: I can absolutely confirm that. The difference here is with respect to what the director is allowed to take into account in considering what the protection is of the environment. You will note at the beginning, it says: “Despite

section 14…if the introduction of waste into the environment is provided for under an area based management plan….”

The director is drawn back to consider the guidance that is provided within the area-based management plan and, therefore, is allowed to consider that in that examination of what is the protection of the environment.

G. Heyman: I will thank the minister for offering some clarity about the intent of this amendment and how it will work. It causes me some discomfort, but it’s beginning to make some sense.

There is one other concern that’s been raised and is quite serious. Sub (2) says: “Subject to subsection (3) and

section 16 (2) [amendment of permits and approvals], the issuance of a permit under this

section is final and binding and may not be appealed under Division 2 [Appeals from Decisions under this Act] of

Part 8.”

[1615]

Obviously, the concern there is that there is no appeal allowed as a result of this amendment. That is very concerning to people with whom I’ve consulted and to me. Can the minister confirm that I am not missing anything in the reading of this section?

Hon. M. Polak: This is because, in this case, it would be the subject of an order from a minister. An order cannot be appealed through division 2. Instead, if one wishes to appeal — for lack of a better word — a minister’s order, then the remedy there is judicial review.

G. Heyman: The minister has made a case for why this is necessary. I understand what the minister is attempting to achieve. We disagree with the mechanism. Others disagree with the mechanism. I think there would have been other ways to achieve the same end while still allowing an appeal through the Environmental Appeal Board. For that reason, we cannot support

section 7.

Sections 7 and 8 approved on division.

section 9.

G. Heyman: Concerns have been expressed to me about

section 9 that say that the violation of a permit issued by the minister does not invoke the usual penalties for permit violations that are set out in

section 120(10).

No alternate penalty seems to have been provided in this bill, although, in the other cases where there are exceptions for violations of permit penalties, there are clear penalties listed. The Offence Act doesn’t apply, so can the minister explain why no penalty is listed, specifically, to accompany this exemption?

[1620]

[R. Lee in the chair.]

Hon. M. Polak: I may have to ask the member to restate his question, because I don’t think I understood his question.

The

section is amended. The only difference here is that previously, the only order covered was under subsection 9(3). All we’re doing is adding that the same applies to permits under subsection 90.1(1).

There’s no change in offence provisions or anything like that. It’s simply to make sure that the same system applies under the area-based management plan.

G. Heyman: If the minister’s answer to my question…. My question was that in initial reading of the amendment, it appeared to some that a violation of a permit issued by the minister does not invoke the usual penalties for permit violations that are set out in 120(10), and where there are other exemptions or exclusions, that separate penalties are listed.

If I understand the minister correctly, the minister is saying that that is not the case and that the penalties continue to apply. It’s just expanded to ensure that it covers issues raised by orders under an area-based management plan consequential to the other amendments. So the issue of penalties is, in fact, covered.

[ Page 13081 ]

Hon. M. Polak: Maybe I’ll deal with it this way. I think I understand the member’s question now. First, it’s important to recognize that this same

section already, currently, exists in EMA. This is simply adding that it will also now apply to orders issued under sub 90.1(1).

Now, where the difference comes in with respect to an order…. Again, it’s not new with this amendment. This already existed. An order is something, in this case, that the minister has given. So if there’s a contravention, it’s an order that has been given to the civil service. Those contraventions are handled in a different fashion than an order given to a company, for example, or a proponent.

G. Heyman: I was following right up to the last bit. Can the minister just clarify what the effect of a contravention of the order is in that event?

She said it is different, because it’s an order to the civil service. My question had to do with respect to penalties applying in the same way they would apply if a permit was issued under any other mechanism than an area-based management plan.

Did I hear the minister correctly that that is the case, or that that is not the case?

Hon. M. Polak: Remember that subsection 9(3) is about hazardous waste storage and disposal, right? That is the

section that we are amending, and it talks about the current provisions in the case that there was an order or a requirement placed on one of these members of the public service. If they were to contravene that, they are not governed under the Offence Act.

[1625]

In a case where we are outlining penalties for contravening a minister’s order, then one must put in place what those are. It’s not under the standard…. They’re not covered by the offence provisions.

The only change here is to include those orders that would be issued under an area-based management plan, 90.1. Those orders are now included in this section. That’s the only change. The types of penalties don’t change. This is simply making sure that the now area-based management plan, again, is included in the scheme within the act.

Section 9 approved.

section 10.

G. Heyman: My question to the Minister of Environment with respect to

section 4 is the same. In this case, we had a parks amendment act, Bill 15. This is an amendment to the description of Finn Creek Park. Why was this not addressed in Bill 15?

Hon. M. Polak: In my judgment, this particular boundary amendment will garner, I expect, far more attention than maybe any other that we have done in some time. It seemed to me appropriate that it not be lost in the mix, so to speak, with all the other amendments — I’m sure the member recalls — that were made and additions that were made, and instead, to see it looked at individually. Albeit, it certainly isn’t substantive enough to stand on its own as one piece of legislation, so it’s here in the Miscellaneous Statutes Amendment Act.

Of course, those who do have an interest in this have been watching as this has gone through the extensive process in terms of getting even to this stage in the Legislature. I would also note that there’s been significant work with the First Nations and that we have received a letter of support from the Simpcw First Nation, whose traditional territory this boundary adjustment would be affecting.

G. Heyman: Could the minister give this House and people in British Columbia the rationale for this amendment, what the impact and purpose of the amendment will be?

Hon. M. Polak: The parks act does not allow for industrial activities in parks, so when a decision was made to route the Trans Mountain pipeline through Finn Creek Park, that means that they require to actually remove that land from the park. In this case, that will be 2.43 hectares. That will enable the construction and also the maintenance and operation of the Trans Mountain expansion project, if it is approved.

I should also add that, according to the First Nation in the area, the Simpcw, they have also now reached an agreement with Kinder Morgan that once construction has taken place, the land affected would be returned back to the state in which it had been found.

[1630]

It’s also important to note that unless and until the pipeline were to receive all its approvals, this act, this boundary amendment will not come into effect. That, I think, outlines the extent of the change here.

Again, very important to note the process that got us to this point and, of course, the engagement and support of the First Nation.

G. Heyman: There has been significant opposition both to the pipeline and to the proposal by Kinder Morgan that it do testing within the current boundaries of the park. What other consultation, in addition to consultation with First Nations, did the minister undertake?

Hon. M. Polak: There was consultation, I already mentioned, with the Simpcw First Nation as well as Adams Lake and Neskonlith.

In addition to that, of course, a draft was put up on the web last year, as we always do for these consultations. It’s also important to note that as a result of the consultations the company has had with First Nations and with others, they reduced the number of boundary amend-

[ Page 13082 ]

ments that they were requesting, from four to two. This is one of those two.

There has been significant effort made to accommodate the concerns that they have heard from First Nations and from the broader community. Again, in this case, they did achieve the agreement of the Simpcw to have this boundary amendment moved forward.

G. Heyman: Notwithstanding the consultations the minister references, there is some significant First Nations objection to both the activities of Kinder Morgan and the proposed pipeline in its current form, much concern about the whole nature of the National Energy Board hearings with respect to the pipeline — a number of which were expressed by the government itself and the minister. The Tsleil-Waututh have apparently no interest in enabling this pipeline in any way.

So my question to the minister is: given that the government has put forward five conditions for approval and has stated that nothing they’ve seen from Kinder Morgan gives them the comfort that these will be met, why is the minister now proposing a park boundary amendment that enables testing of Kinder Morgan to carry this proposal forward?

[1635]

Hon. M. Polak: First, let me reiterate that this will not come into force unless and until the Trans Mountain expansion project is approved, not just by the NEB but also that it meets our five conditions. We’ve stated that quite plainly.

But the role of B.C. Parks here is different. We have an obligation to adjudicate applications that are brought forward with respect to boundary amendments, and we must do so in an administratively fair manner. In this case, we have judged that this boundary amendment meets the criteria to be brought to this House and brought forward as legislation. A significant part of that is the approval of the First Nation on whose traditional territory this portion of the pipeline will be placed.

G. Heyman: I can’t think of a more controversial proposal with respect to the interests of First Nations on the coast or the residents of Metro Vancouver, the municipal governments of Metro Vancouver. We’ve expressed concern in this chamber before about amendments to park boundaries that allow industrial activity. This seems to be quadrupling down on that. It is a concern. It will be a concern. It will be seen as a foot in the door.

I believe that it calls into question the government’s sincerity about maintaining strict conditions around pipeline development and a massive increase in tanker traffic in the waters that are traditional territories and traditional food-gathering places of First Nations and that are integral to the economy of Metro Vancouver.

Notwithstanding the minister’s explanations that this is a matter of administrative fairness and has the approval of the First Nation on whose territory this resides, this is a bigger issue. It’s a substantive issue, and it’s particularly substantive in light of the fact that the Premier has mused about the possibility of exchanging sale of B.C. power to Alberta for approval of pipelines. This has people genuinely and legitimately concerned.

When we see this amendment, notwithstanding the fact that the minister said the reason it was not included in Bill 15 was because it was a matter that she expected would engender significant debate and, therefore, didn’t want to mix it in with the other mostly good news in Bill 15….

I think another way to look at it is that the minister did not want to take the good news in Bill 15 and have it completely buried by the bad news of this amendment.

The minister is correct. There will be significant debate on this, not just in this chamber but in the public generally and certainly among people who are concerned about the potential impact of not just the pipeline but the work that has been undertaken by Kinder Morgan to facilitate and expedite their proposal for this pipeline, their willingness to run roughshod over local governments, their failure to respect the government of British Columbia with respect to questions that the government put forward — a request for information which they had to meet statutorily in other jurisdictions and refused to meet in British Columbia.

It simply is inexplicable to me why the government, in the face of all of this…. If it was sincere in its statement that Kinder Morgan had to meet conditions before the government could ever agree to the pipeline proposal and the increase in tanker traffic, this begs the question of what really is the intention of this government going forward.

With that, I believe the member for Oak Bay–Gordon Head has some questions related to this amendment.

[1640-1645]

Section 10 approved on the following division:

YEAS — 39

Sturdy

Bing

Hogg

Yamamoto

Stone

Fassbender

Oakes

Wat

Thomson

Virk

Rustad

Wilkinson

Morris

Pimm

Sultan

Hamilton

Reimer

Ashton

Hunt

Sullivan

Cadieux

Polak

Coleman

Anton

Bond

Letnick

Bernier

Barnett

Yap

Thornthwaite

McRae

Plecas

Kyllo

Tegart

Throness

Martin

Larson

Dalton

Gibson

[ Page 13083 ]

NAYS — 25

Hammell

Simpson

Farnworth

James

Dix

Corrigan

Fleming

Popham

Conroy

Austin

Fraser

Karagianis

Eby

Mungall

Mark

Bains

Elmore

Heyman

Darcy

Donaldson

Krog

D. Routley

Weaver

Chouhan

Holman

[1650]

section 4.

Hon. P. Fassbender: I wanted to introduce staff that are with me today to move forward on sections 4 and 5 of Bill 25. I’d like to introduce Kevin Volk, who is the executive lead, community services and legislation division, on my right. On my left is Brian Currie, manager of property assessment services, and behind Brian is Miriam Starkl-Moser, the assistant director of legislation. With that said, I’m ready to answer any questions.

L. Krog: Delighted to have an opportunity to participate in debate this afternoon. I know that the public servants who’ve assembled here, at the minister’s request, are anxious to provide some of their wisdom to the members of this House. I would simply ask the minister, in a very general way, with respect to

section 4: what, exactly, is the purpose of this section, and what will be its legislative effect?

Hon. P. Fassbender: The proposed amendment to the Assessment Act,

section 20, will provide the authority to prescribe, assess values by regulation for designated restricted-use properties, such as B.C. Ferry Services and Nav Canada facilities. The regulated values will effectively eliminate the application of current and future nominal evaluations and significantly reduce appeals.

L. Krog: I take it…. Is this going to, in all likelihood, have the impact of reducing the amount of taxation paid to local government, increasing it, remaining the same, to make it simpler? Or is it, as the minister says, just about the appeal process? In other words, will this actually change the process of determining value and the resultant taxation that will flow from it?

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Hon. P. Fassbender: The rationale for this is that it supports a fair and consistent assessment system. It’ll be predictable and stable property tax revenues for local government. As well, all property owners will be paying their fair share of property taxes.

L. Krog: Just so I’m clear, then, who would this apply to? Give me examples. Is it strictly Crown agencies, Crown corporations, or does it have an extended use to private land owners?

Hon. P. Fassbender: As is indicated, the property eligible for designation by Lieutenant-Governor-in-Council as restricted-use property under this legislation would be required to meet the following criteria: located on Crown land, municipal land or land otherwise exempt from taxation and used by a taxable third party or occupier; owned by a non-profit corporation and held or occupied under lease, licence or other agreement subject to a restricted-use agreement under which the property is restricted to the provision of a service of benefit to the public; and occupier of property must be at least in part publicly funded.

As I mentioned in my opening remarks, the examples are B.C. Ferries properties and Nav Canada properties. There would be no private property that would be included in this.

L. Krog: I want to raise a concern from the B.C. Non-Profit Housing Association that the changes to the Assessment Act coul