Second Session, 41st Parliament

(2017) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Monday, November 20, 2017

Afternoon Sitting

Issue No. 61

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Introductions by Members

Statements

Earthquake in Iran

B. Ma

Reena Virk

Hon. R. Fleming

Statements (Standing Order 25B)

Conduct in Legislature

S. Chandra Herbert

Palliative care

L. Throness

Squamish Nation Eslha7an Learning Centre

B. Ma

Sudden infant death syndrome

S. Cadieux

Indigenous participation in rugby

M. Dean

Gordon Desormeaux

J. Martin

Oral Questions

Government position on Site C power project

T. Redies

Hon. M. Mungall

Site C power project and electricity rates

M. Stilwell

Hon. M. Mungall

Site C power project and jobs in alternative energy

S. Furstenau

Hon. M. Mungall

Site C power project and agreements with First Nations

D. Ashton

Hon. S. Fraser

J. Rustad

Site C power project and impact on Peace River area

D. Davies

Hon. M. Mungall

M. Bernier

Petitions

M. Hunt

Point of Privilege (Reservation of Right)

N. Letnick

Tabling Documents

Office of the Auditor General, An Independent Audit of Grizzly Bear

Management , revised report, October 2017

Orders of the Day

Motions Without Notice

Invitation to Hon. Jay Inslee, governor of the state of Washington, to address the House

Hon. M. Farnworth

Committee of Supply

Estimates: Ministry of Energy, Mines and Petroleum Resources (continued)

A. Weaver

S. Bond

Hon. M. Mungall

T. Shypitka

E. Ross

M. Bernier

T. Redies

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Social Development and Poverty Reduction

Hon. S. Simpson

M. Hunt

J. Thornthwaite

M. Stilwell

D. Barnett

MONDAY, NOVEMBER 20, 2017

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

D. Clovechok: It gives me great pleasure today to stand here and introduce someone

from my home community, up there in the gallery — Eden Yesh. He’s a member

of our community in Invermere. He’s also an employee of Kootenay Employment

Services, and he’s worked incredibly hard with the Columbia Valley Chamber

of Commerce to create a B.C. community economic and development investment

program, which enables individuals within B.C. communities to pool their

capital together and invest in local entities.

He’s a mover and a shaker, a young guy, a great husband to Lisa and a

dad to Liam. I just want to welcome him here. It’s my hope that someday he

stands where I sit here today, so please make him welcome.

[1:35 p.m.]

N. Simons: It gives me a lot of pleasure, on National Child Day, to introduce a

couple of folks from the Representative for Children and Youth’s office. I

know my colleague from Vancouver–Mount Pleasant will do the third

introduction, but it’s a pleasure to introduce Bernard Richard in the House

today, along with Dawn Thomas-Wightman, the Deputy Representative for

Children and Youth. I know that we will commit to working closely and making

sure that we can continually improve the child-serving system here in

British Columbia with their help and with all the help of all my fellow

colleagues in this House.

Hon. M. Mark: Today is, in fact, National Child Day. It’s a day that we get a chance

to recognize the rights of children and youth in this province and

throughout the world: the right to play, the right to be heard, the right to

participate in the political process and the right to an

identity.

As you know, I’m a very, very fond advocate for the rights of children

and youth, but today in these chambers, we have a very special guest. Her

name is Cheyenne Andy. She’s from the Nuxalk Nation. She is the

representative for the day. She is touring along with the Representative for

Children and Youth and the deputy representative, Dawn Thomas-Wightman, to

learn about the work of the representative’s office. She’s here in the

chambers. I understand she had lunch with you, hon. Speaker. She is on

tour.

I would like the House to please join me in welcoming this young

activist, who is a fierce leader with the Vancouver Aboriginal Child and

Family Services council. Please join me in welcoming Cheyenne

Andy.

Statements

EARTHQUAKE IN IRAN

B. Ma: I rise today to inform the House that on November 12, during our

week away from the Legislature, a 7.3 magnitude earthquake hit the

Kermanshah province of Iran. It is the deadliest earthquake of the year,

creating tremors that were felt as far away as Pakistan, Lebanon and

Turkey. So far, it has claimed more than 500 lives, injured more than

10,000 people and left as many as 100,000 souls homeless as temperatures

approach freezing at night.

My heart goes out to the people of Iran during this difficult

time. Let us come together in supporting the recovery and those members

of our own communities whose families and loved ones have been impacted

by this terrible disaster.

bani ādam á-zāyeh yek pey-ká-rand, ke dar ā-fá-ree-nesh ze yek

go-ha-rand. It is an old Persian poem, and it says: “Human

beings are members of a whole in creation of one essence and soul.” Let

us come together.

REENA VIRK

Hon. R. Fleming: Last week I had the privilege of attending a memorial to remember

Reena Virk. I was honoured to speak alongside her father, Manjit, who,

along with her mother, Suman, has worked tirelessly across Canada to

fight bullying in schools and here in British Columbia.

Twenty years ago Reena’s tragic death, the result of teen violence

and bullying, gripped our nation. Those who lived in Victoria at the

time remember how the entire community was in shock. The healing and the

recovery is ongoing, and it is important that we continue to remember

and honour Reena.

From this tragedy, we’ve learned many things. Twenty years ago

things were very different in our school system. There was no provincial

strategy to prevent bullying. Bullying wasn’t actually challenged. In

fact, it was almost seen as a rite of passage and a part of life for

students to endure. Reena’s death showed us just how dangerous that can

be.

Today we have different discussions about bullying. We give it a

name. We call it out for what it is: abuse, intimidation and aggression.

Reena’s parents are owed a huge credit for much of this learning in

British Columbia.

Sadly, bullying didn’t end with Reena’s passing, but 20 years

later, we have a preventative strategy to try to make sure that bright

young people like Reena aren’t victimized in B.C. schools. To combat

cyberbullying, students can now easily let adults know with an on-line

reporting tool. There are specific references to sexual orientation and

gender identity in anti-bullying policies at every school in our

province.

Mr. Speaker, 16,000 educators, police officers, mental health

workers and other community partners have been trained to address

bullying. We’re still not perfect, but B.C.’s school system has made

significant improvements. It’s critically important that we continue to

remember Reena and her life and to commit to make sure that no other

young person’s life ends in the tragic way that hers did.

[1:40 p.m.]

Statements

(Standing Order 25B)

CONDUCT IN LEGISLATURE

S. Chandra Herbert: Well, we’ve probably all done it — given speeches about “leading

by example” or “being a role model” or “being the change we want to see

in the world.” We tell our kids that name-calling is bad. We urge them

not to interrupt people who are speaking. Most of us have donned our

pink shirts and pledged to end bullying in B.C. We speak about the

golden rule, about treating others the way we want to be

treated.

As we all know in this House, we can sometimes be like that parent

who told their kids: “Do not smoke.” They promise not to smoke ever

again, but when caught say: “Do as I say, not as I do.” That’s right. I

speak about our behaviour towards each other in this House. And I

include myself in this.

Standing Order 40 states: “No Member shall use offensive words

against any Member of this House.”

Erskine May: “Good temper and moderation…characteristics of

parliamentary language.” We are not to impute false motives,

misrepresent another’s language, charge of uttering a deliberate

falsehood or use abusive or insulting language likely to create

disorder, as we know.

We’re supposed to be role models here. But do we always do that? I

don’t know. I’ve been on both sides of this House, and I know that

sometimes it’s hard not to get an answer to a question you want or hard

not to have your answer heard by the other side, just as in human

relationships.

Should we try and shout louder than the other to score a point?

Should we drown each other out, interrupt each other, make fun of each

other, name-call? No, I don’t think we should. But we do. It happens.

Emotions sometimes get the best of us, I know.

But who are we? Who do we want to be? I make this plea to all

members here because I want this to be a place where we enjoy coming to

work, where those who watch what we do here are proud of us and are

proud of what we do in representing our constituents. If we won’t hold

ourselves to the highest standard, is it any wonder the public often

holds us in disrepute? Let’s make our constituents proud. Let’s do as we

say.

PALLIATIVE CARE

L. Throness: The World Health Organization’s comprehensive guidelines on

palliative care affirm life and regard dying as a normal process.

Palliative care intends neither to hasten nor postpone natural

death.

My own father passed away in Cascade Hospice in Chilliwack. Dad

was seen each day by a caring physician, his pain was well managed, and

he died in dignity. Such invaluable services ease the passage from this

life for citizens all over B.C. Those who request the hastening of death

have been served in other clinical settings.

Contrary to current practice and WHO guidelines, the Fraser Health

Authority plans to announce today that so-called medical assistance in

dying will be imposed throughout the region. Palliative care facilities

will be required to allow it to take place on their premises. This

fundamental change will have far-reaching effects on palliative care in

the valley. Since much care depends on private donors who do not agree

with this new direction, funding and volunteer recruitment will be

adversely affected, and there will be less palliative care

available.

Palliative care doctors believe passionately in the value of their

work, and for many, respect for life at the end of life is a deeply held

matter of conscience. Some will refuse to work where they might be

forced to facilitate early termination in some way, so the quality of

palliative care will decline with the loss of some

professionals.

Fully 95 percent of patients do not want the option of early

termination. For them, the knowledge that they can request life-ending

drugs will apply subtle pressure upon them to do so. Patients who don’t

want that kind of pressure will avoid skilled palliative care and suffer

because of it.

My long-term concern is that palliative care will become the ice

floe of our modern culture, where people feel obliged to end their lives

as a kind of perverse civic duty. So I call upon the government to

reconsider this decision and affirm that which is recognized the world

over — that palliative care should neither hasten nor postpone natural

death.

SQUAMISH NATION

ESLHA7AN LEARNING

CENTRE

B. Ma: On the 300 block of 5th Street West in North Vancouver, on the

traditional territories of the Squamish peoples, is an unassuming

building that most passersby would not give a second glance. The

Squamish Nation Eslha7an Learning Centre, however, is a place where

confidence, futures and second chances are born. Here, caring and

compassionate staff work with Indigenous youth and adults to overcome

adversity and develop the essential skills and knowledge they need to

build themselves and their families better lives.

[1:45 p.m.]

The staff at this facility are acutely aware of the challenges

many of their students face, particularly around poverty, mental health

and addictions. That’s why reconnecting students to their traditional

Indigenous culture and language and providing access to food,

counselling and peer support are key components of the programs they

offer here.

The most important feature of the Eslha7an Learning Centre is that

it offers a safe and caring learning environment, where every learner

knows that they matter. And it works. There are many success stories.

Sometimes adult students enter the Eslha7an Learning Centre being unable

to read and write and leave with their Dogwood diplomas, also with a

renewed connection with their heritage and ready to take on the

world.

What a beautiful use for this aging building today, especially

given that it was originally built to be a residential day school, a

place where Indigenous language and culture were systematically taken

away. It’s powerful work that’s happening at the Eslha7an Learning

Centre, and I’m so grateful to have had the opportunity to meet those

dedicated students and staff in their space and learn about it. Huy

chexw a .

SUDDEN INFANT DEATH SYNDROME

S. Cadieux: Babies. Just saying the word makes me smile. I’ve always loved

babies, and it’s a happy moment, always, when one is introduced in this

House by a proud parent or grandparent. But sudden infant death

syndrome, or SIDS, sometimes turns that joy to grief.

SIDS is an unexplainable death, where there’s no reason why the

baby dies. Their hearts and brains just stop, like a light switch has

been turned off. It can happen to children from the ages of zero to 24

months, but babies zero to three months are most susceptible. A sobering

thought. In Canada today, one in every 250 babies will die from

SIDS.

There are preventative measures that can be taken. For example,

those include no bumper pads in the crib, no extra blankets, no stuffed

animals, not allowing your child to get too warm, keeping your rooms at

a moderate temperature and always, always placing babies on their backs

to sleep.

Even after all those precautions, SIDS can still take a child’s

life. That happened to Tanya and Rob Gill. On February 19, 2011, they

were happily preparing for a family party. But their son, Azaan Singh

Gill, a healthy baby boy, passed away during his afternoon nap at the

age of six months. His death deeply affected the family, as no one who

hasn’t had this happen could even imagine. I certainly can’t imagine

that kind of grief.

Now a few years have passed, and they’re moving forward. Tanya and

Rob started Steps for SIDS. It’s a family walkathon to help create

awareness and find a cure. This inaugural year raised close to $15,000

for the B.C. Children’s Hospital pathology research clinic, and the next

event has already been scheduled for next August 19.

At an event for women a few weeks ago, another $3,000 was raised,

and I saw Tanya speak at that event in Surrey. Her quote says it all.

“We don’t want anyone to go through the pain that we did, and we hope,

by creating this awareness and raising funds, we can help at least one

family.”

Thank you, Tanya and Rob, for your efforts to raise awareness and

to find a cure.

INDIGENOUS PARTICIPATION IN RUGBY

M. Dean: On Friday, November 3, at B.C. Place, Toquaht First Nation member

Phil Mack captained Team Canada’s rugby squad in an international match

against the Maori All Blacks. The sporting event made history at the

gates for Rugby Canada, drawing a record crowd of nearly

30,000.

It was also a proud moment for Aboriginal involvement in rugby.

Phil is one of the founders of the Thunder rugby program, an initiative

to promote the game of rugby among Aboriginal communities in B.C. and

assist similar organizations across Canada. He and Mark Bryant and John

Lyall thought it would be cool to give Aboriginal youth another choice

in sport.

Thunder is short for thunderbirds. The thunderbird, among

Indigenous people, is a powerful, supernatural bird with great speed. If

you’ve watched the Thunder play, it’s easy to see the

connection.

Many of the Thunder programs are offered at the Songhees Wellness

Centre by Songhees First Nation members in my constituency. There are

also youth tournaments throughout the year and a senior men’s team.

Several Thunder players have gone on to represent their province and

their country at their age grade level. The hope is that rugby will soon

be added to the North American Indigenous Games.

[1:50 p.m.]

As John Lyall puts it: “You see the joy that the kids have and the

accolades they get, the fun that they’re having, playing the sport and

being with other Aboriginal youth.”

Congratulations to all those involved in this program and,

especially, to the coaches, players and supporters. Go,

Thunder.

GORDON DESORMEAUX

J. Martin: It is my absolute pleasure to stand in the House today and inform

members about one of Chilliwack’s most recognizable citizens. Gordon

Desormeaux, better known as Chef Dez, is a well-known cook, culinary

ambassador and author in Chilliwack and beyond.

Just two months ago he released a new book, Parsley is World

Peace in Disguise: A Food-Eater’s Guide to Enhancing Life and

Relationships , and although it’s not actually a cookbook, it is

a book for those who cook. According to the chef, no matter what race,

religion or financial status anyone is in, we all begin, end and

continue our days with food.

Chef Dez makes a point of, to the greatest extent possible, using

local ingredients in his dishes in order to support and promote

Chilliwack’s agricultural community at every opportunity. His generosity

in lending his time and expertise to local fundraising events, whether

he’s cooking, demonstrating or emceeing, is greatly appreciated by

everyone.

Chef Dez is also an official representative for the Big Green Egg

company, a line of backyard ceramic smokers that has fast become the

cooker of choice for the big dogs. Perhaps one of the most glowing

tributes I can bestow upon the chef is that he’s one of the few people

in British Columbia I’ll take barbecue advice from. That’s high praise

indeed.

The chef also hosts culinary tours, with the latest taking place

next fall — the Spoons and Tunes Culinary Tour of New Orleans, Memphis

and Nashville. You can bet the Whip’s going to be getting an application

for leave from me to attend that wonderful adventure.

This certified Red Seal chef has a truly inspirational take on

life. His values and his love of food come from his mother, who has

supported him throughout his career. The chef is an outstanding member

of our community. He gives so much.

Will the members of the House please join me in congratulating

Chef Dez on his new book and thanking him for his many contributions to

the wonderful community I’m so fortunate to live in.

Oral Questions

GOVERNMENT POSITION ON

SITE C POWER

PROJECT

T. Redies: Today we are in the midst of the largest infrastructure project in

our province’s history. The case for building Site C is very compelling:

clean, affordable and reliable power that will enable sustainable

development for generations to come. Cancelling Site C would mean the

largest write-off in our province’s history, higher electricity bills

and lower economic growth.

My question. Other than partisan malice and a desire to undo the

legacy of a previous government, why on earth is the Minister of Energy

still considering what would be a 10 percent increase to people’s hydro

bills and writing off $4 billion?

Hon. M. Mungall: I’m sure the member would agree, as all members in this House

would agree, that we need a B.C. Hydro that works for British

Columbians, that develops clean power in an affordable way for British

Columbians. Unfortunately, the B.C. Liberals chose to sidestep the right

process for doing just that when they came to the decision-making

process for Site C. Rather, they decided that somehow their

decision-making was much better than being informed by the B.C.

Utilities Commission.

That was the wrong decision. We are righting that decision. We are

ensuring that British Columbians’ interests are first and foremost as we

right that decision. That’s how you build a better B.C.

Mr. Speaker: The member for Surrey–White Rock on a supplemental.

T. Redies: Frankly, the minister hasn’t articulated a single reason to

consider writing off $4 billion, but interestingly, her own deputy has,

by painting a very grim picture of an NDP future in British

Columbia.

[1:55 p.m.]

In a letter addressed to the BCUC last week, he asked if the BCUC

used the low energy forecast because they are expecting significantly

lower economic growth and also the decline of the mining, forestry,

commercial and, yes, even, technology sectors, presumably because of NDP

economic policies.

Interjections.

Mr. Speaker: Members, if we may hear the question.

T. Redies: A simple question for the Minister of Energy. Can the minister

confirm that the only reason to terminate Site C is if the BCUC’s dire

economic forecast for our province is accurate?

Hon. M. Mungall: I commend the member opposite for her stellar attempt at quite the

spin job there. At the end of the day, if government has questions about

the B.C. Utilities Commission report, it’s absolutely appropriate, it’s

fair, to ask those questions. That’s our job.

This is a very complex issue. It’s an important decision. It’s a

serious decision. It’s one that that government refused to make with

information from the B.C. Utilities Commission. That was absolutely

wrong.

British Columbians had questions. They deserved answers to those

questions, and now they deserve a fair and informed decision.

I know that that’s not the way the B.C. Liberals like to do

things, but that’s how we’re going to do things on this side of the

House. We’re working for British Columbians.

Mr. Speaker: Surrey–White Rock on a second supplemental.

T. Redies: Since I didn’t get an answer to the question, it would appear that

the plan of the NDP is to make B.C. an unattractive place to invest and

live in so they can terminate Site C.

The grim picture painted by her deputy and in the BCUC report goes

on: “The NDP future under a low energy forecast and a termination of

Site C means no climate action, no electrification of our economy or

electric vehicles, no economic growth and no population

increase.”

Again, to the minister. Is this the future she and her government

want for B.C.? Yes or no.

Hon. M. Mungall: British Columbians want a B.C. Hydro that works for them. They

want to see a B.C. Hydro that puts its projects through the appropriate

process through the B.C. Utilities Commission.

The B.C. Liberals failed to do that, and now they’re mad about the

report that came out. No surprise.

This side of the House is committed to working for British

Columbians — to make sure that B.C. Hydro works for British Columbians,

to make sure that rates are affordable for British Columbians. We’re

doing the due diligence to make sure that that happens.

SITE C POWER PROJECT AND

ELECTRICITY

RATES

M. Stilwell: I find it outstanding that the minister suggests that the B.C.

Liberals didn’t follow due process when she herself has announced a rate

freeze without going to the BCUC — sheer hypocrisy.

Hydroelectricity is the cornerstone of British Columbia’s economy,

providing ratepayers with some of the lowest-costing electricity in all

of North America. By cancelling Site C and replacing it with alternative

sources, B.C. Hydro actually estimates that there will be a cost

increase of $650 million to $900 million. In other words, a 6 to 8

percent rate increase for people’s hydro bills.

[2:00 p.m.]

Can the minister confirm for us here today in the House that this

6 to 8 percent increase from the alternatives would be on top of the 10

percent gouge that she has already admitted to?

Hon. M. Mungall: British Columbians want affordability. That was very clear during

the election. I knocked on many, many doors, and British Columbians said

they wanted to see affordability. They did not want to see tax breaks to

the richest 2 percent. Meanwhile, their hydro rates went up. They didn’t

want to see that anymore. But that’s what they got over and over again

from the B.C. Liberals.

The reality is that there’s a lot of information coming forward

when it comes to Site C. The B.C. Utilities Commission brought a lot of

information forward that this government is going to be considering, and

we’re going to be considering fairly, because that’s the right thing to

do. I know that that concept is lost on the B.C. Liberals.

Mr. Speaker: The member for Parksville-Qualicum on a supplemental.

M. Stilwell: This government likes to talk about affordability, but I want to

know how that’s going to be affordable when they write off $4 billion

when they cancel Site C.

I mean, let’s be clear. Intermittent renewables like wind and

solar are not an alternative to the firm, reliable power that will come

from Site C. Even worse, this government has rushed a review through the

BCUC that did not produce viable alternatives. Instead of a rate freeze,

ratepayers will be on the hook for a 16 to 18 percent increase in their

hydro bills. Talk about making life more affordable.

Interjections.

Mr. Speaker: Members. Members, if we may hear the question, please.

M. Stilwell: Will the minister tell hydro ratepayers today how high their bills

will go to pay for the alternatives to Site C?

Hon. M. Mungall: Listening to the member’s question tells me exactly why the B.C.

Liberals didn’t want to bother with the B.C. Utilities Commission. I

want to remind them that that was the wrong choice, and British

Columbians know it.

We decided to go with the B.C. Utilities Commission. Had they

actually done their job in the process, the fulsome review that was

desperately needed before a shovel went in the ground would have taken

place. But British Columbians…. They chose not to do that. That was the

wrong choice.

British Columbians still had questions. They deserved answers. We

got those answers for them. We’re now making a decision, and we’re doing

it to work in the best interests of British Columbians.

SITE C POWER PROJECT AND

JOBS IN ALTERNATIVE

ENERGY

S. Furstenau: This is going to be interesting, because every day we actually see

more and more evidence that supports cancelling Site C.

While the B.C. Liberals have been stoking fear about the impacts

on jobs and the economy from cancelling this project, a new report has

just been released from UBC that looks at jobs numbers. This report,

based on independent research, shows that cancelling Site C is actually

the decision that supports workers and creates jobs. The researchers

found — it’s always good to read research — that cancelling Site C and

pursuing an alternative portfolio of wind and conservation results in

five times as many jobs as continuing.

This is just one more piece….

Interjections.

Mr. Speaker: Members. Members, please, we shall hear the question.

S. Furstenau: Evidence is not something that we’re hearing a lot from the other

side, but this is one more piece of evidence that shows cancelling the

job is the right thing to do. If the B.C. Liberals were indeed true to

their principles and they were actually talking about jobs, they would

also support cancelling this project.

My question is to the Minister of Energy, Mines and Petroleum

Resources. Why would we continue to push forward on a project that

creates fewer jobs than the alternative?

Hon. M. Mungall: Thank you to the member for her question.

[2:05 p.m.]

I really appreciate the point that she brings up, that we need to

be doing research. We need to be ensuring that….

Interjections.

Hon. M. Mungall: The member is right. The members opposite, the official

opposition, aren’t quite fond of research and evidence.

Interjections.

Mr. Speaker: Minister.

Hon. M. Mungall: The member is correct to point out that evidence and research are

what’s required around Site C, and while it has been going on, the fact

is that we need to hunker down. We need to sharpen our pencils and make

sure that the decision that we are about to make for British Columbia

and for British Columbia’s future is the right decision and that it is

in the best interests of British Columbians. That’s what we’re committed

to doing.

Mr. Speaker: House Leader, Third Party, on a first supplemental.

S. Furstenau: Let’s dive a little deeper into the evidence and the research and

what this UBC report tells us about Site C.

First, we’ve learned that cancelling would create five times as

many jobs. Second, we learn that the jobs would be permanent. In

contrast, Site C jobs are temporary. After construction, Site C would

only create 74 permanent jobs. Third, we learn that these jobs would be

in communities across B.C., and there will be more jobs in the Peace

River region by cancelling. Fourth, we learn that these jobs will be far

cheaper to create. So $1 million spent on conservation creates 30 jobs,

as opposed to only four jobs at Site C. That’s a lot of data to take in.

I’ll let them listen.

We can’t make the case for Site C based on jobs. We also know that

Site C is already over budget and behind schedule.

Interjections.

Mr. Speaker: Members. Thank you. We shall hear the question.

S. Furstenau: We know that the alternatives can provide the same energy at the

same cost to ratepayers.

My question, again, is to the Minister of Energy and Mines and

Petroleum Resources.

Interjections.

S. Furstenau: Data is impartial, but hey….

What rationale is there left for continuing with this

project?

Hon. M. Mungall: I think the differing views that we’re hearing this afternoon on

the question period floor actually reflect a lot of what we’re seeing

out in the public, where you have different experts saying different

things. There is not consensus on this very issue.

What there was consensus on in British Columbia was that this

should have always gone to the B.C. Utilities Commission. We’ve done

that, and we have learned a lot from that process.

Now we’re moving into a decision-making phase where we’re going to

be looking at the variety of information that has been accumulated over

the years on Site C. The most important aspect of this decision is that

we make it in the best interests of British Columbians so that we are

keeping rates affordable and we are ensuring that B.C. Hydro works for

British Columbians every single day.

SITE C POWER PROJECT

AND AGREEMENTS WITH FIRST

NATIONS

D. Ashton: Site C is the largest infrastructure project in B.C. to date, and

to make it possible were the extensive consultations that occurred with

First Nations.

Six First Nations have signed benefit agreements. One hundred and

fifty First Nation individuals are currently employed at the site, and

$150 million in work commitments have been made to First Nations

companies. This is at risk because of the government and their Green

Party partners. To me, this is inherently wrong — to reverse the

negotiations and reconciliation that have taken place with the McLeod

Lake Indian Band and others.

Does the Minister of Indigenous Relations and Reconciliation

believe that his meetings last week constituted significant engagement

to allow the government to break these agreements reached with those

First Nations?

Hon. S. Fraser: I thank the member for the question, my first question in this

House as minister.

As my colleague opposite knows, as a government, we have committed

to the UN declaration on the rights of Indigenous peoples, the Truth and

Reconciliation Commission’s calls to action and the Tsilhqot’in

decision.

[2:10 p.m.]

As part of that relationship, with respect and recognition, the

Minister of Energy, Mines and Petroleum Resources and myself travelled

to Fort St. John in the northeast this last week, while we were not

sitting, and had extensive conversations and discussions with all First

Nations, bringing back all perspectives from First Nations in the

region, Treaty 8 First Nations. That will be part of our decision-making

process, with respect and with recognition.

Mr. Speaker: The member for Penticton on a supplemental.

D. Ashton: I thank the minister for his answer, but government has been

consulting and engaging with Aboriginal groups about advancing Site C

since 2007. Years of meaningful consultation were carried out in good

faith, and the courts have repeatedly ruled that the duty to consult was

met for all impacted First Nations. In contrast, this government has

consulted with First Nations for one week on the possibility of the

termination of the project. It seems to me that promising greater

reconciliation and opportunity with First Nations and doing something

completely in the opposite is quite hypocritical.

Again to the minister, can the minister confirm that the $4

billion plus that this government and their Green Party partners seem

prepared to throw away on the Site C cancellation includes the hundreds

of millions of dollars and, especially, the ongoing benefits negotiated

in good faith which these First Nations were going to

receive?

Hon. S. Fraser: The member should realize that he was part of a government that

refused to have the independent energy watchdog review this project.

That should have been done from the very beginning. That process, if it

was done properly by this government, would have included full public

hearings involving First Nations and non–First Nations communities

affected in the region. They refused to do that.

We’re not relying on the….

Interjections.

Mr. Speaker: Members, we shall hear the answer.

Hon. S. Fraser: We began these discussions at the leadership gathering in

September with cabinet ministers and chiefs and councils. We are

continuing to work closely with First Nations. Travelling and visiting

with First Nations on issues that affect them and decisions made by the

previous government is what this government is all about. It’s about

working in respect, in partnership with First Nations, and that

government doesn’t seem to understand that concept whatsoever — that

previous government.

J. Rustad: We have the largest write-off in B.C.’s history, a $4 billion

write-off, significant increases to hydro rates, and now we have excuses

or talks around the First Nations. So I want to know something. For

Saulteau, for McLeod Lake, for Doig River, for Halfway, for the other

nations that have signed agreements with our government, or with this

government, B.C.’s government, which constitute thousands of dollars,

thousands of people impacted positively in terms of lifting them out of

poverty, dealing with their rights….

What I really want to know is: when the minister went up this past

week and met with those nations, did the minister explain to these

nations that their agreements would be ripped up when government cancels

Site C?

Hon. S. Fraser: I didn’t explain anything to First Nations except that we have a

government-to-government relationship based on respect and recognition.

All of the perspectives that were put forward…. We met with every Treaty

8 nation in the region. The respect that they got from the minister and

I….

Interjections.

Mr. Speaker: Members, could we hear the response.

Hon. S. Fraser: They know that their perspectives on what the future of Site C

will be…. Whether it continues, whether it doesn’t continue, their

perspectives will figure into our deliberations in this very difficult

decision.

[2:15 p.m.]

Mr. Speaker: The member for Nechako Lakes on a supplemental.

J. Rustad: I can take it from the minister’s answer that he did not explain

what it would mean in terms of cancelling Site C, but I can tell you

this. McLeod Lake Indian Band — which, of course, is one of the six

bands with an agreement-in-place — has clearly told government that this

would set back the relationship with the Crown, impair reconciliation

and create an obligation for reparations. I can tell you that certainly

doesn’t, to me, sound like respecting the United Nations rights of

Indigenous people or First Nations rights and title under the

constitution.

I’ve got one more simple question to the minister responsible for

Indigenous Relations and Reconciliation. What will the minister say to

his cabinet colleagues about the loss of training, the loss of thousands

of jobs, the hundreds of millions of dollars in benefits, the thousands

of acres of land and the liability cost when this government cancels

Site C?

Hon. S. Fraser: This government is changing the way that the Crown and First

Nations work together in this province, in partnership, with respect and

recognition. It is that model, using the UN declaration as our path,

using the TRC calls to action as our path, that will bring certainty and

predictability to the land base and to this province for all British

Columbians, Indigenous and non-Indigenous. We take no lessons from the

members opposite.

SITE C POWER PROJECT

AND IMPACT ON PEACE RIVER

AREA

D. Davies: Last week the Energy Minister was up in my region, in the Peace

region. It’s a region that right now, as we all know, faces some

significant challenges with commodity prices and where they are right

now. This is a region right now that depends on the construction of Site

C, which will contribute over $130 million to our local economies. Local

governments will benefit by $40 million in tax revenue. There’s a $20

million fund to increase opportunities for agricultural industry in the

Peace River region for years to come. There’s another $2 million in

revenue from grants-in-lieu and school taxes.

My question to the Minister of Energy is: what would be the cost

to taxpayers to mitigate the local economic damage of cancelling Site C?

Or is my region going to be left to fend for its own?

Hon. M. Mungall: I know the member opposite is new to this House, but one thing I

can guarantee him, which I didn’t experience as a member in opposition

when the B.C. Liberals were in government, is that when we’re in

government, we’re still not going to forget your region. We still value

the Peace because that’s how we do things in this province on this side

of the House.

That said, all the information that has come forward around Site C

and all the potential impacts of whether it’s terminated or proceeds

will be a part of our deliberations.

Mr. Speaker: The member for Peace River North on a supplemental.

D. Davies: I’m certainly glad that we’re not going to be forgotten about in

the future.

As we know, Site C is an extremely important economic contributor

to the entire Peace region and for the entire province, for that matter.

There are community agreements in place with communities across the

entire region — the city of Fort St. John, the district of Taylor,

Chetwynd, Hudson’s Hope and others. These agreements include support for

non-profit organizations in both South Peace and North Peace. There’s an

annual fund of $100,000 per year during construction of the project that

will be administered by the United Way to help out non-profits as

well.

My question to the Minister of Energy is: what is the cost of

winding down these benefit agreements with local governments? Is the

minister planning to pull the funding from United Way before

Christmas?

Hon. M. Mungall: Let me say to the member that he can be assured that on this side

of the House and in this government, we’re taking no lessons from the

B.C. Liberals on tearing up contracts.

[2:20 p.m.]

M. Bernier: I assume by that last answer, then.... That just means that we’re

not cancelling Site C. We’re not ripping up contracts. So thank you very

much.

The minister also said she values the region. What she doesn’t

seem to value, though, are the people who actually work in the region.

As the minister knows — because the numbers have just come out — under

the NDP government, there are over 2,300 people working at Site C. I

really want to thank the local media, who let myself and the member from

the North Peace know that the minister actually came up to the region

last week, because we weren’t notified. But when the minister came up, I

really want to appreciate….

Interjections.

Mr. Speaker: Members, we shall hear the question.

M. Bernier: I guess I hit a sore spot with the members of the government here.

Actually, I’d like to just remind the members that it’s amazing how many

pictures I have with announcements that have them in the picture with

me, but that’s obviously for different….

Interjections.

M. Bernier: To go back to the most important part here, which is around the

people and the families that are working on this project, the minister

flew over Site C on her way up to the region, up to Fort St.

John.

My question to the minister…. Her own numbers show that there are

2,300 people, 2,300 families affected, that are working right now at

Site C. During this visit — albeit, she will probably admit, it was a

short one, only a day or two — there was lots of time in there for her

actually to go down to the site, to see the site and, more importantly,

to talk to the 2,300 people who are affected. Did the minister go down

to the site and talk to any families at Site C?

Hon. M. Mungall: Well, I’m probably going to do a first here in question period. I

want to apologize to the member. It was my understanding that my staff,

or someone in my ministry, would have let him know that we were on our

way to consult with First Nations. I did not want to repeat the

behaviour that I received from B.C. Liberals when they came as ministers

to my constituency, including that member.

Interjections.

Mr. Speaker: Members.

Minister, continue.

Hon. M. Mungall: Thank you very much, hon. Speaker.

I want to say, especially to the people who are working on site,

that there isn’t a day that goes by, when we’re looking at the

information around Site C, that we’re not thinking of them. That’s

precisely why we want to move in an expeditious and a timely manner to

make sure that they have certainty in their lives. The fact that they

have uncertainty right now is squarely the responsibility of the B.C.

Liberals…

Interjections.

Mr. Speaker: Members, we shall hear the response.

Hon. M. Mungall: …who refused to put this project through the B.C. Utilities

Commission, as it always should have done. That uncertainty rests with

the B.C. Liberals, squarely.

[End of question period.]

Petitions

M. Hunt: I rise to present a petition. This petition is requesting that the

honourable House urge the government of British Columbia to immediately fund

Soliris as a choice of patients with atypical hemolytic uremic syndrome and

their health care providers in this province, through public

funding.

Point of Privilege

(Reservation of Right)

N. Letnick: I rise on a point of privilege.

Mr. Speaker: Member for Kelowna–Lake Country, you have reserved your

right.

N. Letnick: Thank you, hon. Speaker.

Tabling Documents

Mr. Speaker: Hon. Members, I have the honour to present the revised report of the

Office of the Auditor General, An Independent Audit of Grizzly Bear

Management .

[2:25 p.m.]

Orders of the Day

Motions Without Notice

INVITATION TO HON. JAY INSLEE,

GOVERNOR OF THE STATE OF

WASHINGTON,

TO ADDRESS THE HOUSE

Hon. M. Farnworth: I ask leave of the House to move a motion:

[Be it resolved that the House suspend proceedings on Tuesday,

November 21 to invite the Honourable Jay Inslee, Governor of the State

of Washington, to address the Legislative Assembly.

Further, that the address and the remarks following the address by

the Premier, the Leader of the Official Opposition, and the Leader of

the Third Party, or their designates, be printed as an appendix to the

Hansard Report of Debates of the Legislative Assembly on that

day.]

Leave granted.

Motion approved.

Hon. M. Farnworth: In this chamber, I call continued debate on the estimates of

Energy, Mines and Petroleum Resources. In Committee A, I call estimates

for the Ministry of Social Development.

[2:30 p.m.]

Committee of Supply

ESTIMATES: MINISTRY OF ENERGY,

MINES

AND PETROLEUM RESOURCES

(continued)

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

chair.

The committee met at 2:35 p.m.

On Vote 21: ministry operations, $95,006,000

(continued) .

A. Weaver: I just wanted to start by thanking the minister. The member for

Prince George–Valemount and I raised the issue of a permit with respect

to Borealis looking for the exploration permit in the Valemount region.

I’m very pleased that that permit has gone through cabinet and that they

have received it. I wish to thank the minister and put that on

record.

S. Bond: Thank you, also, to the leader of the Green Party. I wanted to add

our thanks. Borealis is incredibly grateful. We are excited about the

possibility of moving that project forward and would really urge the

minister to continue to work with B.C. Hydro, as that is one of the

important steps in this project. We did want to take a moment just to

express our appreciation for moving that permit forward.

Hon. M. Mungall: Really quickly, I just wanted to thank both members. I know that

they are both very passionate about that particular issue, and it was

great to actually be in a process where all of us wanted to see it go

forward. It was just a matter of where it was in the queue.

I know that the member opposite will remember, from when she was a

minister, that until it actually receives approval in cabinet, there’s

not a whole lot that I can say before that. So I’m also very glad that

cabinet approved that permit and that we’re able to go forward and work

with Borealis.

T. Shypitka: First of all, welcome back, everybody, from the Remembrance Day

break week. I hope everybody had a chance to recharge their batteries,

so to speak. In addition to some of the memorial services I attended, I

also attended the memorial service of the three men that died at the

Fernie ammonia leak. Actually, I hosted the Minister of Labour, showed

him around, and it was a really good conversation. It was really good to

meet up with him and show him the community of Fernie. They should be

commended. It was a very, very well-done service.

We’re going to get into some more questions here today. In light

of some of the information that was brought forward a couple of weeks

ago, we feel that there’s some clarification that needs to be done.

We’re going to start with LNG, the petroleum file, and then we’ll go on

to Site C and B.C. Hydro and then maybe finish it up with some mining

questions.

I’ll turn it over to my colleague from Skeena.

E. Ross: We’re talking about competitiveness for the LNG industry versus

other jurisdictions, like the United States or Australia. So can I ask

the minister: what processes has the minister undertaken or propose to

undertake to address competitiveness?

[2:40 p.m.]

Hon. M. Mungall: First off, I’ll just start by saying who we’ve been working with.

This government, with the highest-level senior staff — specifically, my

deputy minister right here — has been working with First Nations,

working with communities, working directly with industry — for example,

LNG Canada, Kitimat LNG.

I’m working with industry associations as well, like the LNG

Alliance and so on, to engage them in the process of what we need to be

doing here in British Columbia in terms of government policy levels to

make sure that our jurisdiction is competitive on that global scale. The

process has been going on for several months. The report back that I’m

getting, especially from industry and First Nations, is that it has been

very, very good. They feel very engaged and that their input is being

heard.

We’re looking at a variety of policy levers to see what it is that

we can do. I don’t want to pre-empt what will ultimately be decided by

cabinet, nor do I want to tip off our competitors on exactly what we’re

looking at, at this stage, when no decisions have been made. But I want

to assure the member that we take this very seriously. We want to see

the success of the industry in this province, so we’re working very

closely with them.

E. Ross: Thank you to the minister for that. I don’t think we’ll be tipping

our card to our competitors, especially when we’re talking about

Australia and the United States, who don’t have a carbon tax. B.C. now

has a carbon tax that will increase every year.

I was going to ask about specific areas like, possibly, the PST or

any types of fees. But I’ll restrict this question to whether or not the

carbon tax will be reviewed in terms of competitiveness for the LNG

industry.

Hon. M. Mungall: In terms of the carbon tax, I would say that in my conversations

with the industry, everybody recognizes that it’s here and that it’s

going up. That’s part of this government’s policy, but it’s also part of

the federal government’s policy. How that is going to impact industry is

absolutely a part of the review, so it’s not like we’re trying to

pretend it doesn’t exist and it doesn’t have impacts.

At the same time, we want to ensure that it is the incentive to

reduce GHG emissions that it is meant to be. We’re looking at it in that

scope as well. I’ve got to really hand it to the LNG industry and to the

natural gas industry. They have been very forward-thinking when it comes

to reducing GHGs. They know they have a lot of responsibility that they

need to address in that, and they are actually taking steps to do that.

So I really have to say hats off to them.

I’d also add that in the review that this government has asked

for, we’re looking at what’s called the EITE — the energy-intensive,

trade-exposed — industries. We’re looking at how taxation policies are

impacting them in the frame of how we all reduce our carbon

emissions.

[2:45 p.m.]

E. Ross: Thank you, Minister.

Time is of the essence, especially for projects like LNG Canada,

who want to announce an FID by 2018. That’s when the next window of

opportunity will be coming up for these multi-billion-dollar

projects.

Can I ask, in relation to the previous answer, what the expected

timelines are relating to these action items, whether it be a type of

panel or a TOR or a report? How soon can we act on those competitive

measures?

Hon. M. Mungall: As we’ve been saying publicly, we’ll have a decision on the policy

levers that we’re going to be implementing to ensure B.C.’s

competitiveness by the end of this calendar year.

E. Ross: I’m assuming that will be a public report that will be made. It

will be available to everybody, the public.

Hon. M. Mungall: The short answer to that is that it depends. If they involve tax

measures or any types of legislative measures, that would be a part of

the budget process and released with the budget as well as with the

legislative plan for the spring session. So it wouldn’t be something

available in January, for example. If our way forward is not either

legislative or taxation-based, then our intention would be to inform the

public at this time.

E. Ross: Thank you to the minister.

I’ll go back to my original comments. Our competitors don’t have

carbon taxes. Initially, what we’re talking about, just for one project,

for two trains for one project, is $51 million a year, annually. As the

increases come up, that will top out at $85 million per year. Industry

is coming to me and asking me about what incentives the government can

look at in terms of the carbon tax, not as tax revenue to pay for other

services but using part of that carbon tax as an incentive to actually

reduce their own carbon footprint.

Is that conversation happening within the government as well as

with the industry at the same time?

Hon. M. Mungall: I appreciate the member opposite’s in-depth knowledge about the

industry and what’s going on. He’s absolutely correct when he says that

we’re the only jurisdiction to date that is paying a carbon tax on LNG.

That being said, we’re obviously aware of it.

In looking at the carbon tax…. The intention of the carbon tax, as

the member alluded to, is to incentivize industry to reduce greenhouse

gas emissions. I would say, in our conversations with industry, they’re

very committed to reducing their greenhouse gas emissions. We want to

make sure, however we work with the carbon tax, that we are actually

ensuring that it delivers on exactly what it’s intended to

do.

How that will actually look is yet to be determined, as we’re in

the middle of this process with industry, First Nations communities and

the associations. I don’t want to pre-empt what, ultimately, will be the

collective decision-making there and what they will be coming back to

recommend to government.

[2:50 p.m.]

E. Ross: Competitiveness. I’m glad to hear that you’re working with the

federal government to address competitiveness. What I’d like to ask the

minister is: what type of formal process is the minister engaging with,

with the federal government, to address which processes can address

competitiveness for the LNG industry in B.C.?

Hon. M. Mungall: In our discussion with the federal government, we’re looking at,

specifically, policy levers that are in the federal jurisdiction,

namely, within the Ministry of Finance and Natural Resources Canada —

NRCan, as most people will call it. We’re working directly with very

senior officials in those two ministries.

I’ll just name some of the policy areas that we’re looking at —

the fabricated industrial steel component, so the FISC duties, as well

as the capital cost allowance. Those are the two main things and the

most immediate, in terms of who’s most immediate to FID, or final

investment decision. As the member alluded to, LNG Canada…. That’s

definitely, in their case, the situation. We’re also looking at other

import duties.

[2:55 p.m.]

For example, and the member brought this up last time, the

floating import duties, as well, for smaller potential LNG developments

like Steelhead, which has now been renamed Kwispaa.

E. Ross: Okay. Forgive me. I’m going to assume that means that you’re

working with the Minister of Finance, as well as Jim Carr, the Minister

of…. I believe it’s Natural Resources. Yeah. I’ve worked closely with

Jim Carr in the past as well. It was mentioned that we could work

together across this House in places where it can….

If there is a formal process, a formal correspondence, in terms

of…. Now, I know you can’t share confidential-type documents or letters.

But is there any type of public document that can show the working

relationship and the agendas — even at a broad, general level — in terms

of what B.C. and Canadian governments are working on?

Hon. M. Mungall: At this stage, our government-to-government talks, as well as our

engagement with industry and First Nations communities and

non-Indigenous communities as well as associations…. They’re at a

confidential stage right now and for the reason I said earlier — that we

don’t want to be tipping off our competitors in terms of what we want to

be doing here in British Columbia, what needs to be going on here in

British Columbia.

I really want to extend an invitation to the member opposite. I

truly value his years of experience on the LNG file from a community

perspective, as a community leader. If he has anything that he really

wants to make sure is in my filing cabinet, in my mind, about what some

of the things are that we need to be considering, I would really

appreciate it. Either a letter or we can have a formal meeting or even a

conversation over coffee in the dining room. I would really appreciate

that opportunity.

E. Ross: To the minister, thank you. Maybe I’ll take you up on

that.

The reason for my line of questioning is because…. I don’t believe

the carbon tax is confidential when we talk about United States and

Australia. It’s a big competitive factor that might hinder LNG companies

in B.C.

One of the reasons I’d like to know the nature of the discussion

is…. What could be left out of the discussion? For example, are First

Nations being consulted on the possible consequences of a carbon tax

increasing from year to year on LNG companies? It’s that type of

information I’d like to learn about, as well as help where I

can.

With that, are First Nations being consulted on the carbon tax as

it relates to the LNG industry?

Hon. M. Mungall: The short answer is yes. But I would add that First Nations have

highlighted a variety of other issues that we need to be talking with

them about, and we’ve been doing that as well.

E. Ross: Okay, thank you.

Just a little change of topic here. There is going to be a study

or some type of investigation on the extraction of LNG. There’s been a

lot of pressure put on this government to actually consider a

moratorium. Is a moratorium a valid option when it comes to the

extraction of LNG in B.C.?

[3:00 p.m.]

Hon. M. Mungall: Hydraulic fracturing has been going on in British Columbia since

1950. Today very, very close to 100 percent of all natural gas is

derived from what’s called “unconventional wells,” which is hydraulic

fracturing.

There have been concerns all over the world, not just in B.C. but

all over the world, about the process of hydraulic fracturing,

particularly on water quality and water quantity and induced seismicity.

Those are fair. Any time we do some type of natural resource extraction

and natural resource development, we have a due diligence, as government

and as regulators, to ensure that our environment, particularly our

water, is protected. You’ll find that in any other jurisdiction as

well.

Here in B.C., there have been many studies over the years on this

very issue. One of the commitments that we had during the election and

that we plan to deliver on is to have a scientific panel on hydraulic

fracturing. That panel is going to be looking at science. Now, I know

that there’s a lot of conversation, especially on the Internet, about

hydraulic fracturing. We want to weed out some of the misinformation

that might be out there, whether for or against, and we want to get down

to the brass tacks, to the facts of what’s going on.

As I have conversations with industry…. They see this as a

learning opportunity on how they can improve their operations to ensure

that water is protected and that we have good water quality, good water

quantity and that we can reduce induced seismicity. I’ve got to, again,

hand it to the industry. I met with — oh, goodness — about seven or nine

different companies who are currently active in the Montney region in

northeast B.C. Every single one of them recycles their water that they

use for hydraulic fracturing. They recycle 90 percent of it, and they’re

using it hundreds and hundreds of times, right? So they’re already doing

a lot of work to reduce their impact on the water table.

How can we improve? That’s always a fair question, and that’s the

type of question that we’re going to be asking with our scientific

review panel, once it gets up and running in the new year. We want to be

able to deliver information to British Columbia in a way so that we are

learning best practices going forward.

E. Ross: Yes, I agree with you. B.C. has got some of the highest standards

in North America, if not the world, when it comes fracking. We can

always do better, as long as we’re not imposing another hurdle or

obstacle that actually doesn’t get our product to Asia. That’s my

concern.

The question was, specifically…. I understand the studies. I

understand how long we’ve been extracting natural gas — not LNG, as my

colleague points out. But what I want to know is: when you’re talking

about the panel, or maybe your ministry office’s decision, will a

moratorium on fracking be a valid option when it comes to the end of

your scientific review?

[3:05 p.m.]

Hon. M. Mungall: A moratorium. Let’s think about what the consequences of that

would be. My home is heated by natural gas. I would be surprised if the

home of the member opposite wasn’t heated by natural gas. His is. Most

of our homes are heated by natural gas in B.C. That natural gas comes

from the northeast, for the most part, and it is pulled up from the

ground using hydraulic fracturing. The idea that suddenly in B.C., in a

Canadian province, we would turn off the switch to the way in which we

heat our homes…. Who would do that, right? Who would do that? No

government that wants to get re-elected would ever do that. No

government that believes in being responsible and being representative

of the public would do that.

We have to think about.... Any type of moratorium. What would the

consequences ultimately be? At this stage, my home is heated by natural

gas. Your home is heated by natural gas. That’s the vast majority in the

same situation, for British Columbians. So if we were going to put a

moratorium, we’d better have something that has already been put in

place. That’s hugely expensive and a massive, massive type of project

that has not been discussed with the public whatsoever. In terms of

going forward, the purpose of the hydraulic-fracturing scientific review

is so that we can learn best practices, so that we’re protecting our

environment.

E. Ross: Thank you, Minister. I didn’t even consider domestic use, for

heating our homes, but thank you for that.

My question was more in relation to the potential of the export

LNG industry and whether or not fracking would be exposed to a

moratorium, based on a panel. But I’ll leave that answer the way it is

and just take it as a no. Knock on wood.

I know I’m going to get back to the same question as well, but do

you have any timelines of when the scientific panel review will be done

— ready for, of course, your review and then available for public

review?

Hon. M. Mungall: For the member’s information, we’re just putting the panel

together now. We’re talking to potential panel members about their

availability, and we anticipate to get the panel started in the new

year, in early 2018. Our hope is that we would have their work completed

by late fall, maybe early winter, in 2018, in the same calendar

year.

E. Ross: To the minister: in terms of pipeline construction, we’re talking

about certainty. There’s only, basically, one area in central B.C. where

that seems to be an issue in terms of the pipeline construction. If your

ministry does not get the consent or the full consultation….

The Chair: Through the Chair, Member.

E. Ross: Sorry.

If the Ministry of Energy and Mines doesn’t get the consent or the

consultation and accommodation that it needs to build a pipeline, what

will be this government’s next steps?

Hon. M. Mungall: I know the area that the member is talking about, and I know some

of the tensions that are happening there around getting the pipeline

through. I want him to know that we are working on this issue. We take

it very seriously.

[3:10 p.m.]

I don’t want to pre-empt how those conversations are going and how

that engagement is going. I just feel that it would be disrespectful to

the communities involved, at this stage, to pre-empt things. But I’m

hopeful that through good negotiations, through respectful dialogue, we

can ensure that all communities, from well to tidewater, can benefit

from this industry.

E. Ross: Thank you, Minister.

I’ve just got one question, but it’s not natural gas–related. It

is oil pipeline–related. I’m not sure if you have the right people in

the room to answer that question.

Interjection.

E. Ross: Give it a shot? Okay.

The court case that your government has intervened in — if it

comes out in favour of Kinder Morgan, what will this government do in

terms of that decision? Will it look for another option to stop the

project, or will it accept the decision and allow Kinder Morgan to

proceed?

Hon. M. Mungall: I’m sure the member probably knows that the Ministry of

Environment has been the lead in terms of that high-level

decision-making, and there’s been no decision that would directly answer

his question at this time. I will let him know that the Ministry of

Energy, Mines and Petroleum Resources is doing what it is supposed to

do, which is working through the permitting process.

M. Bernier: The minister referenced that there have already been lots and lots

of reviews done on fracking. Is she now saying that of all the reviews

that have been done prior to today, none of them have been

scientific?

Hon. M. Mungall: No, I wasn’t saying that at all. In fact, a lot of the work that

has been done in British Columbia has been very much scientific-based

and science-focused — and not just B.C. but all over North America and

Australia, for example. This particular panel will be taking those types

of reviews into account as well.

I mean, just very cursory is that some places in the U.S., for

example, have done even more studies than what we’ve been able to

conduct here in British Columbia. So if there is information there that

might be valuable to our situation here in B.C., absolutely, that panel

will be looking at that as well.

M. Bernier: The minister, I think, is well aware of the fact that the

geological formations around natural gas and exploration are completely

different in different areas, which requires different scientific

studies.

When we have numerous — I assume the minister has read them, like

I have — scientific studies that have already been done here in British

Columbia, can she explain, then, why we need to do another one and why

we would even consider looking at other jurisdictions when it’s a

completely different type of system that they’re working

with?

Hon. M. Mungall: The member is quite correct, as he knows, to point out that the

geology is different in different places.

[3:15 p.m.]

What’s going on in northeast B.C. is very different than what

might be going on in some of the jurisdictions in the United States and

in Australia, where they’re drilling into coal shale, for example. While

the geology is different, the technology being used may be the same. In

terms of why you would, then, do one if we’ve done it so many times

before, it’s that the technology is also regularly changing.

That being the case, we feel that there’s always something to

learn, especially keeping in mind that we want to be the best here in

B.C. out of anywhere else in the world in terms of our ability to

protect our water sources — the member opposite’s water sources, because

he comes from that area. Keeping that in mind, we want to make sure that

we’re always open to learning new and best practices to protect our

water quality, protect our water quantity, reduce induced seismicity and

to ensure that people who are living in the area don’t have negative

environmental consequences.

M. Bernier: I just wanted to be clear, and I think the minister would agree

with this. This is by no means, this line of questioning, taking away

from the fact that we already have, I would say, the best globally when

we look at our environmental regulations and the process that we have

here in B.C.

I also know, because I meet regularly with all of these companies,

that they are by no means worried about doing any further reviews,

because they know that we have great practices already, through

innovation that changes constantly. They’re well aware of it, and they

actually do share that information with other companies, even though

they’re competitive.

The next question, then, I would have to ask for this is: how many

wells are being drilled this year? I know the minister has staff that’ll

be able to answer this. Approximately how many wells are being drilled

this year in northeast British Columbia? How many have been drilled in

the last 40 years?

Hon. M. Mungall: We’re just going to dig that up for the member opposite. We don’t

have the number right at the top of our fingertips, but we’re going to

grab that for the member opposite right away.

Let me just add, as well, that I agree. I don’t think industry is

looking at this as a review, as something to be fearful of. Rather, in

their communication with me, they’re very much looking forward to it as

an opportunity to learn those best practices. In all the companies I

talk to, they want to be the best in the world, and they want to be

delivering some of the best product in the world as well. They see this

as an opportunity to continue that current practice.

M. Bernier: I don’t need to waste too much of staff’s time. I’ll just say

there have been thousands of wells that have been drilled in northeast

B.C. In 2017, there are probably going to be around 75 to 100 more —

like, 50, depending on which company. We don’t need to get into the

details. I can easily find that out.

My question is: over the last 40 or 50 years, then, that we’ve

been doing hydraulic fracturing in the province of British Columbia,

which the minister acknowledged, with the thousands and thousands of

wells that have been drilled in northeast British Columbia specifically

and with the tens of thousands of miles of pipeline just in my riding

alone...? Of all those thousands of wells, can the minister tell me how

many times there’s been a water aquifer contaminated by hydraulic

fracturing?

Hon. M. Mungall: A very short answer to the member’s question is zero, and we want

to keep it that way.

M. Bernier: Well, I appreciate that it doesn’t take too long to find out the

answer is zero, because it is zero. We have never had a water aquifer, a

water well, contaminated in the province of British Columbia out of

40-plus years of hydraulic fracturing.

[3:20 p.m.]

Do we want to keep it at zero? Absolutely. But the whole point is

making sure that we get that message out there. As the minister

acknowledged right at the beginning, there are way too many misnomers

out there. People out there are saying that hydraulic fracturing is bad

and that it’s contaminating water, when actually, in British Columbia,

because of our strict regulations that we’ve had over the last 40 years,

it has never happened.

Again, the main thing that we need, to get the message out — not

only to the public but to companies as well, and I’m glad the minister

acknowledged this — is that any time you’re doing a review, it brings

out people on all spectrums, I will say, with the fear of: does this

mean there’s going to be a close-down of hydraulic

fracturing?

The minister rightfully acknowledged the fact that that would

basically kill 100 percent of the industry. You do not have an industry

in the province of British Columbia unless you have hydraulic

fracturing, at the present day. But it also brings out people who start

thinking that we will be stopping that. I’m glad that the minister has

very succinctly said that that is not the case, because that needs to be

out there for the public.

Can we always be looking at doing things differently or better?

Absolutely. I know the companies, themselves, continue to do that in the

area. I’m proud of the record in my riding and in the riding to the

north of me.

Now, can we do more to actually enhance the industry? Absolutely,

and LNG is a big part of that. Can the minister tell me, since she and

her government now seem to be somewhat positively in favour of LNG…? She

mentioned, last time we were in here, about five conditions. Can she

remind us what those five conditions are?

Hon. M. Mungall: Just to answer the member’s previous question, the number of wells

since 2013 is 2,713, and the number of wells in this year alone is 538.

We’ll get further back if he likes.

Our four conditions we’ve always seen as a road map, not a

roadblock, to the industry. The first one is to ensure that we have

training and job opportunities for British Columbians. The second one is

to ensure that British Columbia has a fair rate of return for our

resources. The third one is meaningful partnerships with First

Nations.

I just want to stop there for a second and say that as I’ve been

talking with both First Nations and industry, the partnerships that

they’ve been able to develop have really been quite astounding. I think

that both First Nations communities and the industry have a lot to be

proud of in terms of their ability to build those strong, meaningful

partnerships.

Then the final one is to ensure that we’re protecting our air,

land and water and our commitments to reducing GHG emissions.

Again, I’ll say that when we look at the hydraulic fracturing that

is already being done, 90 percent of their water is being recycled

already, hundreds and hundreds of times. It shows me that if they

haven’t done everything they can, they’re certainly on the right path.

The willingness to do everything they can to protect our environment is

certainly there.

M. Bernier: Not to go too deep into this, but maybe the minister can explain,

then. After she read out those four conditions and we look at the LNG

projects that we either have still on the books that are trying to be

successful here in B.C. or some that have decided to move to other

jurisdictions because of either world markets or a political environment

they’re not happy with, would the minister, then, tell us which of the

four conditions haven’t been met?

Hon. M. Mungall: We don’t have anything before us that would suggest that they

haven’t met those four conditions at this stage. I’m going to give you

an example, just in terms of training and job opportunities for British

Columbians and some of the things that LNG Canada has been

doing.

One of the things that they’re looking to do is to ensure that the

barriers to women’s participation in the trades are removed, as much as

they possibly can as an employer. One of the things that they can do to

get more women’s participation in their own workforce on the ground, in

the trades is to ensure that the work camps are safe places. They’re

doing a study right now in terms of other best practices at work camps

across North America, looking at ways in which they can make a work camp

that is safe and welcoming for women so that they can, like I said,

remove those barriers to women participating in the

workforce.

[3:25 p.m.]

M. Bernier: Well, I would like to think that there are actually no barriers to

stop women from working in the workforce in this industry. In fact, I

look at the dual-credit program that’s very successful up in my part of

the world. In the last welding program, which 20 students in grade 11

and 12 signed up for, 18 of the 20 were girls or women, knowing that

there are opportunities to work out in the industry.

I’m very aware, through my time in government — spending almost

two years travelling around the province, working side-by-side with

Gordon Wilson for the work that he was doing — of the fact that for not

only women but First Nations, all of those opportunities for everybody

were out there — making sure that we had, working closely with the

company.

I guess I’ll just end with this comment. It’s not really a

question to the minister. It’s that we need to be working collectively.

We’ve heard from other members of the House this morning that LNG and

natural gas is an expectation and maybe a transitional fuel, but

recognizing that it could take many, many decades, if not longer, to

transition off into other things.

We have 3,000 trillion cubic feet of gas here. We’ve got more gas

than we would ever use as a nation, which is why LNG is so important,

which is why we need to continue working with our global partners to

make sure we have opportunities.

With that, Chair, I’m not sure if the minister wants to have any

further comments, but we’re going to switch now to B.C. Hydro, if

there’s other staff that she wants to bring in.

Interjection.

M. Bernier: I’m sorry. My apologies.

A. Weaver: I have a number of questions on this subject matter. First off, I

am troubled by some of the direction this conversation is going. We’re

still trying to double down on the economy of the last century while the

rest of the world is moving forward.

With that said, let me ask a couple of issues with respect to the

royalties that we’ll get. The first is this. We know that the previous

government made a deal with Progress Energy and its partners that would

have locked in royalty rates, low rates, for years and would have cost

British Columbians millions in lost revenue. One of the key conditions

of the deal, however, was that Petronas had to make a final investment

decision on Pacific Northwest LNG by June of 2017, and Petronas decided

to kill that project in July of this year.

Our government now has the legal right to terminate this bad

backroom deal, which literally gave away our resource. My question is:

can the minister tell us if the long-term royalty agreement with

Progress Energy will be terminated?

[L. Reid in the chair.]

Hon. M. Mungall: Thank you to the member for the question. I appreciate that he’s

done his homework and he’s looked at the details of this particular

project. What I can tell him right now is that the ministry has started

looking into it and started to look at some of the legal aspects around

that. We’ll be able to have a better idea later on. Apologies for not

being able to have a more fulsome answer for him today.

A. Weaver: Can the minister let the House know if any other long-term royalty

agreements are being negotiated with other oil and gas companies, in

line with using the Progress Energy agreement as the bar by which others

will be judged?

Hon. M. Mungall: There’s nothing of that kind at this time.

A. Weaver: If we move now to the deep-well royalty program — a program that

has, in my view, surpassed its usefulness, but we’ll come to that. This

deep-well royalty program was designed to enable the provincial

government to share the costs of drilling in B.C.’s deep gas basins. It

has since transformed into a massive subsidy for horizontal drilling and

hydraulic fracturing.

[3:30 p.m.]

It is my understanding that natural gas companies now receive

hundreds of millions of dollars in “deep-well credits,” even for shallow

wells, provided their horizontal sections are long enough. So five

questions on this topic. One is: can the minister please tell the House

what the amassed or outstanding value of these deep-well credits

currently is?

Hon. M. Mungall: We’re getting that value of outstanding credits for the member. We

don’t have it. We’re trying to find it in these big binders, so we’re

getting that for him.

I just wanted to point out that in terms of how the program

works…. I’m sorry if I missed it. Perhaps the member already mentioned

and he knows. What it is, is credits against royalties owing. So it’s

not money going to government. It’s just that we’re collecting less

royalties based on a credit program that looks to incentivize industry

for doing a particular task that government is hoping it will

do.

A. Weaver: Very specifically, then: what is the value of the deep-well

credits that were redeemed in 2016-2017?

Hon. M. Mungall: I’ll have to get back to the member on that as soon as possible.

We’re just grabbing that for him.

A. Weaver: At the same time, I’d like to get the information as to what was

the value of the royalties that the province of British Columbia earned

from exploration in 2016 and 2017, and then I’d like to have the

difference of those two numbers as well.

[3:35 p.m.]

Hon. M. Mungall: We do have the first number for the member, and it’s the total of

accumulated deep credits at $3.2 billion. That’s the total accumulation

of all credits. Those credits are only available, however, to any one

company if their well is producing. So if their well isn’t producing —

say they earned credits as they did their exploration phase, but they

didn’t produce the well — then they wouldn’t be able to access those

royalty credits.

A. Weaver: The point I’m trying to get at here — and I really need the second

part of those numbers — is the credits we give exploration companies

from this deep-well program, these deep-well credits, essentially

preclude us earning any money on royalties from the natural gas that is

extracted.

Why it’s critical that we get the actual amount of money that we

made from royalties for natural gas in 2016-2017 is we only have a

cumulative total, $3.2 billion, that is yet to be claimed in the credit

program. But we need to know the numbers based on an annual

credit-versus-royalty gain to tell British Columbians how much we are

actually making from our resource.

The reason why I think this is important — and I hope we can get

these numbers before estimates end today — is that frankly, I have no

idea why this program is still needed. I ask the minister: why do we

still need to have this deep-well credit program in light of the fact

that horizontal fracturing is no longer a new technology? In fact, it’s

in use all around the world. We had deep-well vertical fracturing, which

my friend from Peace River South was referring to earlier, that went

back decades.

Horizontal fracturing is not new. We don’t need those credits. So

why do we continue to have this program? All this ensures is that we

earn nothing from our natural resource here in British

Columbia.

[3:40 p.m.]

Hon. M. Mungall: I’m going to make sure that we get all the correct numbers to the

member opposite as soon as we possibly can. If we’re not able to do that

today for some odd reason, I’ll be sure to get them to him in the very

near future.

On that, I appreciate his points, I think they’re fair points, and

I’ll take that into consideration.

A. Weaver: I was so dutifully notified that I was speaking at this microphone

over here, where I should be speaking to my…. I’m standing at my desk,

but the microphone was not pointed correctly. Corrected now.

The final question on this topic is: does the minister plan to

continue this subsidy program? You know, we’ve talked about subsidies to

the oil and gas industry in this province. This is a gigantic giveaway.

It ensures that we essentially make no money from royalties because of

the magnitude of the credit program that it can be claimed

against.

In fact, my understanding is we’ve received virtually zero in

2016-2017 in natural gas royalties because of the deep-well credits that

were claimed against those royalties. So will the minister continue this

subsidy program?

Hon. M. Mungall: I’m terribly sorry. To the member, I didn’t catch the actual

question because I got those numbers for him.

The total credits that were earned in 2016-2017 was $229 million,

and the net of all royalty credits was $145 million. So we took in $145

million, as government, in 2016-2017.

A. Weaver: And we gave away $229 million in the process. If I might

add….

Interjection.

A. Weaver: Yes, because those credits were not claimed, were claimed against

royalties. That’s $229 million that could have come into our revenue

here, but we’re subsidizing the oil and gas sector to that

amount.

Imagine this. If we actually subsidized the renewable energy in

British Columbia to the tune of $229 million a year, let alone the

generational sellouts embodied in the Progress Energy agreement that we

referred to earlier….

My final question is: does the minister plan to continue this

program, and if so, why does this industry still need a

subsidy?

Hon. M. Mungall: In terms of reviewing the royalty credit program, there isn’t a

plan to do so at this time.

T. Redies: We’d like to move now, if it’s all right with the minister, to the

Hydro file.

The Chair: This House will recess for five minutes.

The committee recessed from 3:43 p.m. to 3:52 p.m.

[L. Reid in the chair.]

T. Redies: I’d like to go back to where we were before we had to break about

a week and a half ago. Particularly, I’d like to talk about the BCUC and

the rate freeze.

On the BCUC website, BCUC describes their responsibilities as: “We

are responsible for ensuring you,” the ratepayer, “receive safe,

reliable energy…at fair rates from the businesses we regulate. We

balance that responsibility with the need to ensure service providers

are afforded a reasonable opportunity to earn a fair return on their

investments.”

My question to the minister is: given this mandate and that the

rate freeze could result in a $150 million shortfall, as confirmed by

B.C. Hydro previously, does the minister think that the BCUC may have a

challenge approving the rate freeze?

Hon. M. Mungall: I can’t speak for the B.C. Utilities Commission and how they view

this request by B.C. Hydro not to increase rates by 3 percent but,

rather, by nothing this year. The B.C. Utilities Commission, as the

member knows, is an independent body, and I don’t have the ability to

speak for them in terms of how they view this particular

application.

T. Redies: Given the mandate of BCUC is also to ensure the utility has a fair

rate of return, surely the minister must have considered that before she

made the announcement that they were going to guarantee a rate freeze as

of April 1?

[3:55 p.m.]

Hon. M. Mungall: As the member, I’m sure, knows — because it was part of the

announcement — our commitment to freeze hydro rates is tied to a review

of B.C. Hydro. We intend to find savings in that review so that we can

deliver it straight back to ratepayers by reducing the overall costs

that they have to pay on their B.C. Hydro bill. It’s always been tied to

a review of B.C. Hydro. That’s the process that we’re

following.

T. Redies: Does the minister believe that they will actually find $150

million in cost savings to offset the $150 million revenue shortfall

from a rate freeze?

Hon. M. Mungall: I am not able to preclude what that review would yield. That’s

exactly why we’re doing a review. We made a commitment to British

Columbians to save them money, to reduce their overall costs in life, as

we have an affordability crisis here in this province. I don’t know

about the member, but I’ve received many, many letters very grateful

that we’re willing to go in this direction. I anticipate we’ll find some

very significant cost savings, and we’re passing those right back on to

ratepayers.

T. Redies: Well, I think everybody would like to have cheaper hydro and a

cheaper cost of living, but the BCUC has a dual responsibility to also

ensure that B.C. Hydro is not put into severe financial jeopardy because

of decisions made by any government, frankly.

Prior to the end of the last estimates session, I asked the

minister a question that I’d like to ask again. That is around the

combined impact of a rate freeze and the termination of Site C. Given

that the rate freeze will cost Hydro about $150 million — which, I

think, suggests that each forgone 1 percent costs B.C. Hydro about $50

million — and that B.C. Hydro had indicated that a termination of Site C

would require an almost 10 percent rate hike, it would suggest that a

termination scenario, with the cost being amortized over a period of

time, could potentially cost Hydro another $450 million a

year.

The combination of a rate freeze and a potential termination of

Site C could potentially cost the company $400 million to $600 million.

Honestly, I would like the minister to explain how she thinks the BCUC

could agree to a rate freeze in the situation of a termination, when it

would clearly put B.C. Hydro into tremendous financial

jeopardy.

[4:00 p.m.]

Hon. M. Mungall: The first thing I would point out is that a rate freeze would save

ratepayers $150 million. That $150 million, which would not be revenue

to B.C. Hydro, would not put the company in jeopardy. It would be a huge

savings and good affordability for British Columbians. It would not put

B.C. Hydro into jeopardy.

In terms of Site C and that $150 million combined with the cost of

terminating Site C, there’s been no decision at all on Site C. None.

What we are doing is going through the decision-making process and

making sure that we do our due diligence. To preclude how that would

look would be very premature at this stage. But how the B.C. Utilities

Commission might interpret all of this information in its

decision-making process and what I think of it.... Again, I don’t think

on behalf of the B.C. Utilities Commission, and I certainly am not able

to speak on their behalf.

T. Redies: Is the minister aware of how much money Hydro made last year? I

think it’s about $600 million.

Hon. M. Mungall: Thank you to the member for her patience as we look through these

large binders. She’s correct. Around $600 million is what she said.

Specifically, it’s $684 million.

T. Redies: So based on that answer, a combination of a rate freeze and the

amortization costs associated with the Site C termination would wipe out

B.C. Hydro’s profit. Is that correct or not?

Hon. M. Mungall: The short answer is no. It doesn’t wipe out the income. That being

said, again, I don’t want to preclude the decision. I’m sure the member

appreciates we’re in a decision-making process, and no decision has been

made yet.

T. Redies: That’s an interesting answer, as I think $684 million less $600

million doesn’t leave a heck of a lot on the table.

But let’s move on, then — back a bit to this rate freeze. Has the

minister or her staff had any discussions with respect to the rate

freeze with BCUC prior to making the announcement to freeze rates as of

April 1, 2018?

Hon. M. Mungall: The only conversation that was had was between ministry staff and

B.C. Utilities Commission, just informing them, very simply, that

government was looking at options to live up to its election

commitment.

[4:05 p.m.]

T. Redies: By going out with the rate freeze announcement without having

BCUC’s approval prior to making that announcement, does the minister

feel that that is circumventing the BCUC’s independence in any

way?

Hon. M. Mungall: We canvassed this at considerable length about ten days ago. Our

view, this government’s view, is that we wanted to let British

Columbians know that we are fulfilling our election promise. We also

were up front — it was in our press release, and it was in my

conversation with all the media — about what kind of process we have to

go through to fulfil that commitment.

I think that’s a good thing to do — to be transparent with the

public in terms of what processes exist here in government. That’s what

I feel that we…. I know that the members opposite feel very differently

about this approach. As I said then, we’re going to have to agree to

disagree on that.

T. Redies: I know it’s been a week and a half, but the announcement was read

into estimates. There was nothing in that announcement, which was read

into estimates by my hon. colleague from Oak Bay–Gordon Head, regarding

any process that the government had to go through with BCUC.

Minister, you profess to support the independence of the BCUC and

the process around which rate decisions are made. Yet the minister

arbitrarily announced and committed to British Columbians $150 million

in savings, knowing full well that the BCUC has to decide on rate

changes for British Columbians. This was before the minister and her

government made a decision about Site C, a decision that can have

billions of dollars of impact on B.C. Hydro and, indirectly, on the

government.

Does the minister not have any concerns that they have improperly

put BCUC in a very difficult place by saying publicly that the

government is going to deliver a rate freeze?

Hon. M. Mungall: I want to be clear for the record that I have full confidence in

the B.C. Utilities Commission as an independent regulator for this

province and for ratepayers and that I have full confidence in their

ability to behave, always, and do their job, always, in an independent

manner. I have no reason to suspect that they wouldn’t. I don’t think

that this government has put them in an uncompromising situation. I

think that they will do their job — absolutely.

That being said, I also have just reviewed the press release that

we sent out. I’m going to have to say that I feel like the member and I

just have a different

interpretation of how it reads and the facts that

are being offered. That’s fair enough, right? Obviously, we’re in two

different political parties. We’re not going to agree on everything.

They have a different view, and that’s fair. They’re doing their job as

opposition members to ask valid questions.

[4:10 p.m.]

I believe, to answer the member’s question, that the B.C.

Utilities Commission will be consistent in its ability to behave in an

independent manner.

A. Weaver: I’d just like to follow up briefly on the member for Surrey–White

Rock’s comments.

Again, the press release quite clearly said that the B.C.

government was freezing hydro rates. That’s what it said. It didn’t say

that we’re asking B.C. Hydro to make a submission to the BCUC, along

with financial information, to argue why now the rate that had already

been approved — the 3 percent rate that BCUC had already approved —

based on the financial case that the B.C. Hydro took to them would be

overturned. It just didn’t say that.

What I cannot fathom is why we continue to double down to defend

the indefensible. The press release said, clearly, B.C. government

freezes hydro rates. What was done was the B.C. government asked B.C.

Hydro to make a submission to the BCUC to overturn an already

decided-upon 3 percent increase.

Now, if the minister truly believes in the independence of BCUC,

then BCUC will have to ask B.C. Hydro what has changed in their

financials that led them to approve it in the first place. Let me tell

you what has changed. The costs of Site C have gone up to $10 billion,

from $8 billion at the time. It is simply unfathomable that we continue

to double down — on the one hand, having your cake and, on the other

hand, eating it too.

To conclude. To the minister, why can’t she just stand up and

admit that it was misleading and say: “We’re sorry. What we did is this.

We should have been clearer”? And let’s move on, instead of dragging

this story into yet another media cycle for another week.

Hon. M. Mungall: I just want to make sure that everybody is clear, especially

people who are maybe at home and watching this, that there has been no

request to overturn a decision. What happened is that B.C. Hydro, as

part of its rate requirements plan, put forward a previous application

under the previous government to have a 3 percent increase in rates for

this year.

What they have now done is amended that application. I’ll read

specifically from the press release that we sent out. “B.C. Hydro

applied to the B.C. Utilities Commission for three years of increases,

with a 3 percent increase planned for next year” — 2018 — “but will be

pulling back its request, consistent with this administration’s

commitment to a rate freeze.”

What they’ve done is, essentially, amended their original request

for a 3 percent increase to now be actually zero percent.

A. Weaver: The headline of that media release said the B.C. government

freezes hydro rates. Every media outlet in the province of British

Columbia reported: “B.C. Hydro to freeze rates.”

Even here, if the government truly believes in the independence of

the BCUC…. It’s clear you can’t have your cake and eat it too. They

clearly are not believing in the independence of BCUC if they’re saying

the rate increases are happening. Or they are believing in the

independence of the BCUC — in which case, the BCUC must look at the

rationale, apart from the mandate of this government, put forward from

B.C. Hydro in terms of the financials to justify it. You simply can’t

have your cake and eat it too.

[4:15 p.m.]

Again, what I don’t understand is why the minister can’t just say:

“We would have been clearer in the press release. We weren’t clear. We

could have been clearer.” We’d be done. We’ve now triple downed on this.

I don’t know a single person, actually, who knew that the government had

actually asked B.C. Hydro to withdraw its percent increase that was

already approved by BCUC. Nobody knew that. Everyone thought the B.C.

government had frozen rate increases.

Why doesn’t the minister just admit that the press release was

misleading and say: “We won’t do it again”? It’s simple.

Hon. M. Mungall: We’ve spent, probably, around 45 minutes to an hour canvassing

this very question. I’m happy to do it for as long as the member likes,

but we’re just going to have to conclude. This can go back and forth for

as long as the member likes.

I respect his…. He is entitled to have his view, and he is

entitled to speak to the media about his view as much as he likes.

That’s his job. But we’re going to have to agree to disagree on this

particular item. I just don’t see it the way he does, and no matter how

many times he brings this up, I’m not going to. I just don’t. So again,

respectfully, we’ll have to agree to disagree.

T. Redies: Could the minister confirm that the rates are now

frozen?

Hon. M. Mungall: Following the appropriate process, B.C. Hydro has made the

application, and it’s before the B.C. Utilities Commission. The member

knows this.

T. Redies: I think we’re still confused over here as to what exactly is

happening and whether or not there is truly independence with the BCUC

process and this government.

In fact, I’d like to raise another somewhat troubling element that

we saw in the final BCUC report. In fact, in a number of places within

the report, there are references that the BCUC used the low-load

forecast at the request of government. I note in the executive

summary,

on page 3, under the “Future energy needs forecast,” the BCUC refer to

being required by the OIC to use the low-load forecast. “The panel finds

B.C. Hydro’s mid-load forecast to be excessively optimistic and

considers it more appropriate to use the low-load forecast in making our

applicable findings as required by the OIC.”

Is there truly independence with this government and BCUC when the

government appears to have ordered them to use the low-load

forecast?

[4:20 p.m.]

Hon. M. Mungall: BCUC’s choice to use the low-load forecasting — that was their

choice. We did not give them the direction to use low-load forecasting.

We did give them the direction to use BCUC’s load forecasting. We

canvassed previously that that is very common and that they have

historically not used the low end of it but have used the mid end of it

and that using the low end of it is actually a very unique

situation.

If the member would like, I can read to her the term-of-reference

portion where it actually says which forecasting to use, and it’s not

low.

T. Redies: I’m just curious as to why the BCUC report, when it came back, in

its executive

summary, suggested that they were required to use it by

the order-in-council. It seemed to be a contradiction. Can the minister

confirm that neither she nor her ministry staff has had any

conversations with the BCUC with respect to using the low-load

forecast?

Hon. M. Mungall: There was no direction to the B.C. Utilities Commission in terms

of which end of the overall forecasting…. Just for people who might be

watching at home, when B.C. Hydro does its load forecasting, it has what

would be a mid-range, which is the most likely amount that we’re going

to be meeting, the most likely load that we’re going to be meeting. Then

there’s a low end and a high end of the range, right? Because it’s

forecasting, at the end of the day. So that people are aware, we only

instructed them to use that forecasting. Why they chose to go with the

lowest end…. They’ve made note of that in their report, but they were

not instructed to do so by anybody — B.C. Hydro or myself or the

ministry.

T. Redies: If the BCUC has never used the low-load forecast in the past, and

they were instructed to use the B.C. Hydro forecast from June 2016, why

would the BCUC use a low-load forecast when even the minister says it is

the most likely forecast to occur?

To clarify what I said. The minister has just said that the

mid-load forecast is the most likely scenario. She just said that. So if

that’s the case and tradition has always been using the low-load

forecast, why does the BCUC use the low-load forecast in this case? It

doesn’t make any sense.

Hon. M. Mungall: That’s a very good question. I can’t speak for the B.C. Utilities

Commission, as the members know. But this government also asked that

very question of the B.C. Utilities Commission in a letter that we sent

last week.

T. Redies: Did the minister or anyone in her government have conversations

with the BCUC staff about the alternative portfolio and how that should

be dealt with?

[4:25 p.m.]

Hon. M. Mungall: Ministry staff and BCUC staff do have regular meetings. However,

we’re not aware of the ministry having any involvement whatsoever in

BCUC’s choice for their alternative portfolio.

I will say, though, that the BCUC had put forward different

alternative energy portfolios. They received feedback on those

portfolios in the process of their review of Site C and adjusted their

portfolio to now be what we see in their report.

T. Redies: To the minister, can the minister confirm unequivocally that

neither her ministry nor any government staff have had any conversations

or dialogue or suggestions with the BCUC before or during the process

that might have influenced the outcome of the BCUC report?

Hon. M. Mungall: There were no conversations while BCUC was doing its review and

putting together its report that were pertinent to that report. As I

said, ministry staff and BCUC staff meet on a regular basis, but this

was not a part of their meeting topics, to the best of my knowledge. And

just for the record, I only met David Morton in person once the report

was complete.

T. Redies: The minister mentioned the November 15 letter to the BCUC, so I’d

like to just turn to that for a few minutes now. The Deputy Ministers of

Energy and Finance wrote this letter asking for clarification about

questions, some of which we had asked in the previous week. Can the

minister tell me why this happened 14 days after the report was

released?

Hon. M. Mungall: As the member will know, it was an extensive report. Staff were in

the process of analyzing it and looking at if they needed further

information, and going through the appropriate channels within their

ministries, in terms of identifying best processes to get that further

information. Once the two ministries did, they jointly sent out a letter

to acquire that information from the B.C. Utilities

Commission.

T. Redies: Did the minister or any member of the executive council or its

staff instruct the letter?

Hon. M. Mungall: In terms of anybody from the executive council instructing

ministry staff to do this letter, the answer is no.

The process was that ministry staff were doing their due

diligence, doing the analysis of the report, identified some areas of

clarification that were required, and then ultimately came to the

decision that a letter was needed to acquire that clarification, that

information that was required, as is stated in the letter, to assist

with government decision-making.

T. Redies: Can the minister explain: to what depth, if any, was the Premier

and his chief of staff involved in the writing of the letter?

[4:30 p.m.]

Hon. M. Mungall: I’m not aware that they had any involvement.

T. Redies: Does the minister believe…? Let me back

up here. Why did the minister not seek clarification on these important

issues until they were canvassed by members of the opposition?

Hon. M. Mungall: These were issues that were identified through the ministry’s

review. I think the fact that members opposite also identified them

shows that these are important issues that do require clarity and that

perhaps we weren’t the only ones, and our government staff weren’t the

only ones, who had these same questions. To be frank, I’m not surprised

that we ourselves, our ministry staff, the opposition — and frankly, I’m

sure, quite a few members of the public — had some questions that they

were hoping to get some clarity around.

T. Redies: Madame Chair, I’d like to move now to a termination scenario with

Site C. I think it is very important that we understand what the

financial impacts are — British Columbians want to know — if the

government terminates Site C. I recognize that a decision hasn’t been

made, but I think it’s important that government thinks through the

consequences of its decisions very thoroughly, particularly in this

regard.

Minister, we know financial accounting can’t be changed to suit

the government’s whim. At the end of the day, if you terminate Site C,

there are only two avenues that the government has before it. Under one

scenario, the termination would result in an immediate write-off of the

$2.1 billion sunk cost.

Based on Hydro’s 2016 results, I saw this as potentially

triggering a $1.4 billion net loss for Hydro. If you add remediation

costs to that, that’s $1.8 billion that would be expensed. Within a

matter of a couple of years, B.C. Hydro’s equity, which stands at about

$4½ billion, would be substantially depleted. This would have a

disastrous impact on B.C. Hydro and the government’s financial position.

Can we confirm that this is not a scenario that the government is

realistically considering?

Hon. M. Mungall: The question of who will ultimately pay the bill in a termination

situation of Site C has not been determined at this stage because we

have not made a decision. It is a part of our decision-making

process.

T. Redies: We’re very conscious of the fact that the government has not made

a decision on Site C. What we’re asking is for her to verify the

potential impacts of that decision — which, I think, are fair questions.

Any accounting student could think through some of these questions.

They’re very basic.

[4:35 p.m.]

I’m asking: is the government actually considering a scenario

where they would take a write-off of $2.1 billion and expense $1.8

billion in remediation costs to the point that they would more or less

wipe out B.C. Hydro’s equity?

Hon. M. Mungall: Let me rephrase my answer previously. Part of our decision-making

does include who ultimately will pay that bill, how long it’ll take to

pay that bill and how we go about paying that bill. So all of that is

part of our decision-making process.

T. Redies: I’m actually quite surprised that this is taking longer to answer

than it actually should, I would presume. I mean, B.C. Hydro is a

utility. It can use deferral accounts, and I would have thought that a

$2.1 billion hit to B.C. Hydro’s and the government’s bottom line in one

year would be catastrophic.

Maybe we’ll move to the deferral accounts then, because I’d like

to understand what the thinking is in this particular area. Typically,

under this situation, the government would park the $2.1 billion in sunk

costs and the remediation costs into a deferral account and amortize it

over a period of time. In the last estimates briefing we went round, I

think it was intimated by B.C. Hydro that that would be ten

years.

Can the minister confirm that the amortization

schedule for the

write-off of Site C through the deferral accounts would be ten

years?

Hon. M. Mungall: The very short yes-or-no answer to the member’s question is no.

When B.C. Hydro was meeting with her, and in their submissions, they

gave a scenario of a ten-year amortization. BCUC, for example, gave a

scenario around a 30-year amortization. In our letter, in the fourth

question, we asked for clarification from BCUC in terms of a ten-year, a

30-year or a 70-year scenario — in terms of amortizing those costs,

paying that bill, so to speak.

[4:40 p.m.]

As of yet, there’s been no decision, again, on termination or, if

termination did take place, how long that amortization of that bill

would be.

T. Redies: Thank you for that answer, Minister. I was also looking at that

letter. The specific question seems to suggest that anything other than

ten years would fly in the face of “fair and appropriate rate-setting

principles for rate-regulated utilities typically aim to avoid causing

future generations to pay for investments from which they will derive no

benefit.” So how, on that basis, could the government or B.C. Hydro

justify anything higher than ten years in terms of amortizing those

costs?

Hon. M. Mungall: The situation we have before us is whether it would be a ten-, a

30- or maybe even a 70-year amortization. Ultimately, the B.C. Utilities

Commission would be making that decision. We want further clarity on how

they view that amortization to take place so that we can include that

into our decision-making process, as suggested in the letter.

T. Redies: With respect to past deferral accounts, what has been the typical

amortization period used by B.C. Hydro?

Hon. M. Mungall: In terms of a period for a deferral account, the member was asking

what is the typical period. Basically, there really isn’t a typical

period. It really depends on the nature of the account.

[4:45 p.m.]

For example, there are some smaller accounts that are longer than

the 15 years that is the demand-side management account, which is a

larger account, obviously. There’s no real typical, but for larger

accounts, 15 years, in terms of a deferral, I would say, at B.C. Hydro,

is considered a higher amount. But that being said, there are accounts

that are longer.

T. Redies: Just to confirm what the minister said, there are deferral

accounts on B.C. Hydro’s books today that are higher than 15 years? Are

any of those assets actually not producing for B.C. Hydro?

Hon. M. Mungall: My understanding is that all of the longer-term deferral accounts

are tied to assets that are in use.

T. Redies: It would seem rather unusual for Hydro to amortize a terminated

asset for more than, say, 15 years, given the fact that the asset would

not be revenue producing.

I’d like to move on from here and talk a little bit about Hydro’s

debt position and the impact of Site C. Could the minister confirm what

is the outstanding debt associated with Site C that B.C. Hydro has

borrowed to date, and what are the terms of that debt?

Hon. M. Mungall: Unfortunately, we’re not able to give the member an exact number,

because that debt is not separated out from the overall debt at B.C.

Hydro.

T. Redies: To the minister: can the B.C. Hydro staff beside her ballpark how

much they have borrowed for Site C?

Hon. M. Mungall: No. It would be inappropriate to ballpark. Sorry about

that.

T. Redies: I would suspect, given Hydro’s position, that they have actually

borrowed $2 billion, because that’s about the amount of the sunk costs

that have gone into this project.

Let’s move on. What about the remediation costs? Will B.C. Hydro

have to borrow for the $1.8 billion in remediation costs?

Hon. M. Mungall: Some part of it will have to be borrowed.

T. Redies: Could the minister be more specific?

[4:50 p.m.]

Hon. M. Mungall: We have come up against the exact same issue that we had in

answering the member’s previous question about Site C debt to date. B.C.

Hydro does not separate out any one project’s debt. They use a mixture

of cash and debt financing for projects, so they would do the same for

the remediation.

T. Redies: That seems a bit curious, particularly if they were setting up a

deferral account. Wouldn’t they have to know what the total costs were

of that remediation, including borrowed debt and interest costs? It

seems a little bit odd that they can’t kind of separate that out now.

Are they planning to separate it out when they set up the deferral

account?

Hon. M. Mungall: The deferral account will account for the total cost. What I

understand, in talking to B.C. Hydro’s CFO here, and B.C. Hydro’s

president, is that…. Or COO. I give you all kinds of new titles. So

sorry about that.

The deferral account will account for total cost but not,

ultimately, what will be funded by debt financing because of that very

issue that some of that cost will be financed by debt and some of it

will be financed by cash payments. Trying to separate it out at this

stage is just getting ahead of ourselves.

T. Redies: I don’t know if it’s getting ahead of yourselves. It’s more about

trying to think through the consequences of the decision on Hydro from a

financial perspective.

Now, Hydro has a debt management strategy in place that would see

the Crown work towards a 60-40 debt-to-equity ratio. I’d have to ask

Hydro to remind me as to when that was supposed to be

achieved.

I guess my question is: does the government plan to continue with

that plan? What would happen to the debt-to-equity of the company in the

event of a termination? How would that impact the plan to get B.C. Hydro

to a 60-40 debt-to-equity ratio?

[4:55 p.m.]

Hon. M. Mungall: The debt-equity ratio target of 60-40 is still in place. There has

been no change on that. How any scenario regarding Site C impacts that

is a part of our decision-making process.

T. Redies: The lack of specificity of that answer is quite troubling. Maybe

the minister could say…. Does she think a termination scenario might

cause a problem for Hydro in terms of meeting its debt-to-equity

obligations? It’s a yes-or-no answer.

Hon. M. Mungall: The member knows that there are considerable implications,

whatever decision is made around Site C — whether to proceed or whether

to terminate. This is one of the issues that we are considering in that

decision-making process. I appreciate that the member would like to have

some more specifics. I just don’t have those for her at this time, but I

do want to reassure her that it is part of our decision-making

process.

T. Redies: If it would be helpful, I did the calculation myself. Terminating

Site C would actually take B.C. Hydro’s debt to equity to close to 90 to

10, which is not going in the right direction.

All right. Let’s talk a little bit more about the credit-rating

implications for B.C. Hydro in the event of a termination. Can the

minister confirm what the current credit rating of B.C. Hydro is? What

would be the impact of a two- or three-notch fall in B.C. Hydro’s credit

rating on B.C. Hydro’s interest costs?

Hon. M. Mungall: Just referring to the member opposite’s previous accounting, her

view of the debt-to-equity.... I imagine that she’s made some

assumptions in there and so on. I can reassure her that we will not be

sending her a letter requesting some clarification or anything. She’s

entitled to do math as she likes. However, there are a variety of things

that we would have to consider in terms of doing those types of

calculations and in making our decision.

In terms of B.C. Hydro’s credit rating, they don’t have their own

credit rating. They use the province’s.

[5:00 p.m.]

[R. Chouhan in the chair.]

T. Redies: In the deliberations that the government and the minister are

currently going through now with respect to Site C, are they looking at

the potential for a termination of Site C to impact the province’s

credit rating?

Hon. M. Mungall: The member is correct to point out that these are large decisions

with serious financial implications. So absolutely, the Ministry of

Finance is doing their due diligence and putting their analysis towards

this in terms of, if Site C was terminated, what implications there

would be for B.C.’s credit rating, if any.

T. Redies: Has the minister or any B.C. Hydro staff discussed the impact of a

write-off of Site C with the bondholders of B.C. Hydro debt, and if so,

what was the nature of those discussions?

Hon. M. Mungall: In terms of any conversations with bondholders, that would be the

Ministry of Finance. I’m not able to answer on behalf of that minister.

I’m not too sure if they have or have not — not to our

knowledge.

T. Redies: Has B.C. Hydro had any conversations with their debt holders? Have

they been contacted by their debt holders? Have there been any concerns

expressed with respect to a termination of Site C by B.C. Hydro debt

holders?

Hon. M. Mungall: In short, no. But again, this would be a question better directed

to the Ministry of Finance, because the debt holder, or bondholder, for

B.C. Hydro is the province, and then the province acts on behalf of

them.

T. Redies: Can the minister confirm that cabinet is having discussions with

respect to the impact of a Site C termination on B.C.’s provincial

credit rating? And what were the nature of those discussions?

Hon. M. Mungall: As I said earlier, that issue is a part of our decision-making

process. The member, though, is asking if we’ve already had

conversations around that. Not at this stage.

[5:05 p.m.]

T. Redies: We’re talking about a multi-billion-dollar impact to the province,

and the minister…. I’m just clarifying what she just said, that cabinet

is not having any discussions about how that might impact the provincial

credit rating. That seems a bit surprising, given the impact. Could the

minister confirm that that’s the case — that cabinet has not had any

discussions about this?

Hon. M. Mungall: Just to be clear, our credit rating and if it should have…. I said

earlier that if terminating Site C — or proceeding with it, for that

matter — has any impact on our credit rating, absolutely that is part of

our decision-making process. But what I hear the member asking is if

we’ve already started having discussions about that particular item. To

be frank, actually, I’m not at liberty to disclose all that we discuss

at cabinet, but we have not started having the discussion on that

particular item at this stage. But will we? Yes.

T. Redies: It would be very interesting to find out what other conversations

cabinet is having when they’re not having discussions about

multi-billion-dollar impacts to the province’s financial

position.

Okay, we’ll move on, if I may, to today’s question period. The

minister made an interesting comment that they will not be ripping up

contracts relating to Site C. I’d just like to clarify what that means.

Does that mean that the $2 billion in additional contracts that have

already been signed with suppliers will not be ripped up, that they will

be honoured? If so, what’s the cost to B.C. taxpayers?

Hon. M. Mungall: Earlier today when I said, in response to a question in question

period…. I was specifically speaking to the fact that this side of the

House would be taking no lessons, in terms of dealing with contracts,

from the B.C. Liberals. That’s very important for this side of the House

because, of course, we all recall how they handled contracts when they

first came in as a government, in terms of the teachers, in terms of

Hospital Employees