Second Session, 41st Parliament

(2017) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Tuesday, November 21, 2017

Afternoon Sitting

Issue No. 63

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Statements

Dave McMurray

B. Ma

Orders of the Day

Committee of Supply

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

T. Shypitka

T. Redies

Hon. M. Mungall

M. Bernier

A. Olsen

Committee of the Whole House

Bill 15 — Local Elections Campaign Financing Amendment Act, 2017

Hon. S. Robinson

T. Stone

A. Weaver

P. Milobar

D. Barnett

S. Furstenau

A. Olsen

S. Bond

D. Davies

S. Thomson

M. Bernier

M. Hunt

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Citizens’ Services

Hon. J. Sims

S. Thomson

J. Thornthwaite

D. Barnett

C. Oakes

Estimates: Ministry of Tourism, Arts and Culture

Hon. L. Beare

D. Clovechok

T. Wat

J. Thornthwaite

TUESDAY, NOVEMBER 21, 2017

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Statements

DAVE M c MURRAY

B. Ma: This morning I had the opportunity to introduce two veterans from

North Vancouver who were awarded France’s highest award for military

merit since the days of Napoleon Bonaparte, including one humble and

private man who had preferred not to be named in the media.

Well, I’m very pleased to be able to share that my constituency

assistants in North Vancouver have informed me that we do, in fact, have

his permission to share his name with the members of this House. The

veteran’s name is Mr. Dave McMurray of the 6th Field Company Canadian

Engineers, North Vancouver. He has been awarded the National Order of

the Legion of Honour in recognition of his participation in the 1944

campaign to liberate France, an honour much befitting a man of his

calibre.

I know that all of us in this House are very grateful for Mr. Dave

McMurray’s service.

Orders of the Day

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

of Energy, Mines and Petroleum Resources. In Committee A,

I call the estimates debate for the Ministry of Citizens’

Services.

[1:35 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 1:36 p.m.

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

(continued) .

T. Shypitka: I’d like to try to wrap the estimates up today. I see the staff

from B.C. Hydro here, so we’ll start with the B.C. Hydro questions. Then

we’ll move to just a couple of last questions on mining at the end. That

should do it.

I’ll introduce my colleague.

T. Redies: I’d like to pick up on the impact of the potential Site C

termination on the rates plan.

First, before we go there, under the balance of the current rates

plan, how much are rates expected to increase? Will the rate freeze that

B.C. Hydro has applied for with the BCUC require higher rates in the

balance of the rate plans period? I’m speaking to the ten-year rates

plan.

[1:40 p.m.]

Hon. M. Mungall: Just to let the member know…. I’m sure she knows this, but let’s

just make sure it’s on the record for clarity. The rates for the last

five years of the ten-year rate plan that was put forward by the

previous government are not, in fact, established. They are merely

models.

They would be established if the B.C. Utilities Commission had

already approved those rate increases, which it had not. The previous

government had not received approval for those future rate increases

from the B.C. Utilities Commission. Rather, that 2.6 percent that goes

up every year in the last five years of the ten-year rate plan has not

actually been approved by BCUC. It has just been modelled by B.C. Hydro.

I hope I said that clearly.

Of course, the review that we are doing in relationship, which is

part and parcel of a rate freeze, is intended to look at that long-term

rate planning and to make sure that we can improve affordability for

British Columbians so that we are able to reduce rates as much as

possible. It’s not just about this year. It’s about looking forward into

the future and ensuring that we have affordability for British

Columbians.

T. Redies: Does the minister expect that the current forecast of 2.6 percent

for the balance of the ten-year rate plan — that the rates will be lower

than what they’re currently projected to be in the ten-year

plan?

Hon. M. Mungall: I don’t have a crystal ball, so I can’t say definitively what will

happen in the future, but our goal, no doubt, is to improve

affordability for British Columbians. So if we can reduce that 2.6

percent rate increase per year in the five-year back end of that

ten-year rate plan, absolutely, that’s our goal.

T. Redies: How can you possibly deliver lower rate increases in a scenario

where you’re freezing rates and you’re potentially terminating Site C?

We talked about this. It’s a $4 billion, at least, expense that has to

be amortized. It would seem to be inconceivable. The company has already

said, and gone on record, that in the event that there was a

termination, there would be a 10 percent rate hike necessary to keep the

company whole, which we attribute to be about $400 million to $450

million a year.

I must admit that’s very confusing to me. They must have a really,

really skookum person working on the review for Hydro to be able to find

that amount of money and keep the company whole. How is that possibly

going to be achieved?

Hon. M. Mungall: I believe I have heard this question in different iterations many

times, and I believe I’ve answered it. It’s all part of the

review.

T. Redies: Well, I would say that the minister has actually not answered the

question, which is why we keep having to ask it again.

Perhaps the minister or her staff can confirm what rate increases

are projected after the completion of Site C, assuming that it does go

ahead.

[1:45 p.m.]

Hon. M. Mungall: Presently B.C. Hydro has not forecasted rates beyond that ten-year

rate plan. So that 2.6 percent per year rate increase that I already

mentioned, in the back end of the ten-year rate plan, is what is

projected.

The member asked specifically in reference to Site C, should it go

forward. That is what is there, should it go forward. That being said,

whether Site C proceeds or is terminated, BCUC always oversees rates.

Should Site C go forward, BCUC will ultimately determine how the costs

associated with building the dam will be brought into rates, whether

it’s over a ten-, 30-, 70-year amortization or if there’s another

mechanism as well.

T. Redies: My mistake, Minister. I thought that B.C. Hydro had done some

net-present-value analysis with respect to the value of Site C. Wouldn’t

they need to have done some work around the rates and the revenue that

they would be expecting? Perhaps they could give us some indication of

what that looked like. How much revenue were they expecting to bring in

with Site C on an annual basis?

[1:50 p.m.]

Hon. M. Mungall: The member is talking about the net-present-value calculations

around Site C. What B.C. Hydro did is provide the B.C. Utilities

Commission with several scenarios around the net-present-value

calculations, but they are not tied to rates. They’re entirely separate.

So to be able to give the member opposite an answer in terms of how Site

C would impact rates, those calculations are separate. They’re just not

associated.

T. Redies: In the interest of time, I’ll move on, but it would seem that to

calculate the net present value, you’d need revenues. Revenues in

Hydro’s case would require, I think, recovery through some sort of rate

mechanism. So I find it kind of odd that that information is not

available.

I guess what I’d like to do now is summarize sort of what we’ve

been talking about in terms of the financial implications of Site C over

the last several days. I’d like to summarize that and summarize what

we’ve heard on this side of the House with respect to what a termination

of Site C might involve.

A termination of Site C would result in a write-off of the $2.1

billion in sunk costs and trigger, potentially, $1.8 billion in

remediation costs. It could force the company to carry a

$400-million-or-more amortization expense over ten years. It could give

pink slips to over 2,300 workers and their families at Christmas and put

at risk tens of millions of dollars in impact-and-benefit agreements

with First Nations and communities.

It could require the company to pay back, potentially, $4 billion

in debt for the sunk costs and for the remediation costs, with no

offsetting revenue from any asset. It could potentially cripple the

company’s income statement and balance sheet for many years to come and

put at risk the day-to-day operations and the ability of the company to

carry out its highly necessary non–Site C capital investment

programs.

It could put at risk B.C. Hydro’s ability to pay back debt and

reduce its debt-to-equity to 60-40, as currently planned. It could

result in the company having to balloon its deferral accounts by more

than $4 billion, thereby, essentially deferring paydown of the deferral

accounts by many, many years.

It could also potentially lead to a downgrade in B.C. Hydro’s

credit rating and potentially even the province’s. And it could force

the company to fork out billions of dollars to find alternative energy

sources at uncertain cost, effectiveness and timing.

Would the minister say that about captures the financial issues

associated with the termination? Is there anything we might have missed

in terms of potential impacts?

[1:55 p.m.]

Hon. M. Mungall: The member is obviously entitled to interpret the results of her

questions however she wishes, but I would point out that there’s another

list. She provided a list. Well, there are other lists of concerns

associated with proceeding as well.

I said this yesterday in question period. There is just no

consensus amongst the experts or in this province in terms of the

implications of going forward or not going forward. There’s a variety of

opinions. There’s a variety of information, absolutely. No scenario is

without risk. No scenario is an easy solution. That’s the

reality.

I would have preferred — and I don’t want to make this a partisan

issue, but this is true — if we’d had the opportunity to go through the

BCUC before shovel hit the ground. I think it would have brought in a

lot of public concerns in a formal manner and been able to address a lot

of those, and every step of the process to get to Site C would have been

appropriately ticked off. That’s not what happened. So we ended up with

a very controversial project that still is controversial. As I said,

none of the scenarios around it lack risk. They all do.

Going forward, we’re taking all of that into consideration, as

I’ve said before. All of the information that I’ve shared with the

member is part of our decision-making process, and we’re in that process

as we speak.

M. Bernier: With that answer from the minister — and she does have

representatives from B.C. Hydro right next to her — is she now saying,

then, that the 9½ years, 8½ years of studies, consultation with local

First Nations communities and expert panels that were consulted before a

decision was made…? Is she now saying to this House, in front of their

B.C. Hydro representatives, that all that work was done for

nothing?

Hon. M. Mungall: I think I made it very clear repeatedly now that all of that

information is part of our decision-making process.

M. Bernier: Actually, what the minister said was she was very politically

accusatory of the fact that a decision might have been made differently

if it had gone to the Utilities Commission prior to government making a

decision.

The point I’m trying to make is that eight years, approximately,

of work and studies — 46 binders, at last count…. I’m assuming and

hoping that the minister has read all those because she has to help make

a decision on this file and this important issue. So with the minister’s

comments — and she’s trying to make it a political one, and I’m trying

not to — the Utilities Commission was asked, on 90 days, to make a

decision and give some feedback back to government.

B.C. Hydro, which I have a huge amount of respect for, and the

staff have spent dang near a decade going through this and doing

consultations. Somehow the minister is trying to put it on the record

that almost ten years of studies equates to zero as far as

decision-making because it’s all about whether it should have gone to

the Utilities Commission or not.

Again to the minister: can she confirm, then, that all that work

that B.C. Hydro did actually validated and was good information put

forward for government to make a decision?

Hon. M. Mungall: I’ve answered this question.

M. Bernier: Well, actually, the minister hasn’t, with all due respect. The

minister continues to say that a different decision might have been made

if it had gone to the Utilities Commission. What I’m trying to get the

minister to acknowledge is the fact that B.C. Hydro did a lot of work.

B.C. Hydro did a lot of consultation. It’s been held up in the courts,

the consultation that’s been done.

All I’m trying to do is get the minister to acknowledge the fact

that B.C. Hydro did a lot of work prior to the past government making a

decision to move forward on the Site C project. Whether it went to the

Utilities Commission or not, this is a grandstanding stunt, I would

argue, that she and the government are doing right now, because she

should be able to acknowledge the fact that all of that work had been

previously done by B.C. Hydro. Will she do that?

Hon. M. Mungall: I am hearing the exact same question repeatedly. I will say again

that I’ve answered it.

[2:00 p.m.]

The Chair: Maybe today the committee Chair can assist. It seems like the

opposition has made valid points, and the minister has answered. She

believes she has. Let’s move on.

M. Bernier: Thank you, hon. Chair, for that advice.

I will ask the minister, though, this then, which hopefully will

rectify the situation: does she trust the work that B.C. Hydro does and

the advice they give government?

Hon. M. Mungall: As I’ve let members opposite know before, this government is doing

its due diligence. It is doing its analysis. The BCUC also did its

analysis of B.C. Hydro, as it is actually mandated to do, and all of

that information is part of our decision-making process.

T. Redies: I’d like to now turn back to the BCUC report and its findings with

respect to the comparable alternative portfolio. I think it’s really

important we talk about that portfolio’s true viability with respect to

B.C. Hydro and whether or not it’s actually realistic.

The alternative portfolio put forward by the BCUC, which is…. The

portfolio I’m speaking about is the one that’s most comparable to hydro.

It suggests that we would need 440 megawatts of wind power. Does the

minister or her staff know how much land is required to generate that

amount of power?

Hon. M. Mungall: That’s a great question. We don’t have the answer for you in the

binders that we have with us today, but if the member would indulge us,

we’ll get it to her as soon as we possibly can — whether today or at a

later date.

T. Redies: I actually have done a little bit of research around that. It’s

quite interesting, actually.

Wind power only has a capacity of 32 percent to 47 percent, so the

number of wind turbines that would be required to generate 440 megawatts

of power would need, apparently, 114 square miles or 72,000 acres at the

higher-capacity range and 158 square miles or 101,000 acres at the

low-capacity range.

Does the minister or her staff know where we would put that many

wind turbines?

[L. Reid in the chair.]

Hon. M. Mungall: That the member knows…. I do commit to getting her those

calculations around land and how we’ve been doing it here in British

Columbia. I think that would be the best way to have analysis around

what’s viable.

Right now we already do have 700 megawatts of wind power — those

turbines going here in B.C. We also have many more proponents who are

stepping forward with potential projects. So from our perspective, being

able to build another 440 megawatts is actually very

possible.

Where you would see that, for the most…. You would not see it in

Nelson-Creston, for example, where we don’t have rich wind resources

whatsoever, but where we do have those rich wind resources is in the

Peace valley as well as Vancouver Island.

[2:05 p.m.]

T. Redies: Thank you, Minister, for that answer. I was aware that we do have

wind power in place. I guess I was wondering where we would put the

incremental turbines. Also, could the minister speak to the

environmental impact of having to use that many acres? Has that ever

been an issue, as far as Hydro and its IPPs are concerned, in terms of

deploying wind turbines?

Hon. M. Mungall: To date, in terms of that 700 megawatts of wind that B.C. already

has, there hasn’t been any controversy in terms of siting it and the

land use and so on. Going forward, though, if there was a larger wind

project producing, I believe…. I did not get this number from my staff

before I stood up. I know the 440 megawatts, but in terms of what would

trigger an environmental assessment. Once you get to a certain amount of

megawatts, it automatically triggers an environmental

assessment.

As the member would know, that process would then look at any

potential effects of land use and any other environmental effects of a

large-scale wind project. To date, in those environmental assessment

processes, there hasn’t been any controversy.

T. Redies: Just turning to another energy alternative that was put forward by

the BCUC. That was geothermal power. I wonder if the minister could tell

us where geothermal power has been used in Canada to date and what she

understands about the viability of geothermal in the province of

B.C.

Hon. M. Mungall: Earlier we canvassed this issue a little bit with the member for

Prince George–Valemount and the Leader of the Third Party in reference

to a company, Borealis, that’s doing some exploratory work for

geothermal near the Prince George and Valemount area. To date, all the

geothermal exploration has not yet been able to establish geothermal

electrical production.

I want to state for anybody who might be watching at home that

when we talk about geothermal electrical production, that’s different

than the geothermal that could heat your home, which many people in my

area actually do.

Where geothermal is at, from our perspective, is that it’s very

much in its early development phase. We do see potential in B.C. It’s

believed there’s actually considerable potential in B.C. As of yet,

though, it has not been established.

T. Redies: Thank you to the minister for that very candid answer.

[2:10 p.m.]

Geothermal has not actually had a tremendous amount of history in

Canada, although in other jurisdictions, it has. I think for the

Borealis geothermal plant that they’re looking at, they’re looking at,

potentially, if they take the standing order issue away, 50 to 100

megawatts of power, far short of what we would need to replace Site

One other point, I guess, with the geothermal issues. I don’t know

if the minister is aware that Iceland — which is one of the larger

producers of geothermal energy, for obvious reasons — has only about 660

megawatts of installed capacity, which, of course, is much smaller than

the 1,100 that we’re talking about.

I’d like to turn now to the IPP financing that is also included in

the alternative portfolio put forward by the BCUC report. In that

report, it assumes that B.C. Hydro will finance all new resources —

presumably, I guess, from IPPs — to offset Site C.

Why would BCUC do this? B.C. Hydro, as far as I am aware, has

never financed IPPs in the 30 years of sourcing new energy

supply.

Hon. M. Mungall: I think the member’s question is a good question. Technically, I

am not able to speak on behalf of the B.C. Utilities Commission unless

they have been upfront or have said publicly…. I could repeat what they

said publicly about any particular issue. But the reason I think the

member’s question is a good one is because our deputy ministers are

asking that very question, as well, in their letter to the B.C.

Utilities Commission, seeking further clarification on their

report.

T. Redies: I understand this is…. BCUC has put this in. I think, perhaps,

it’s because they were asked to find a comparable alternative portfolio

to Site C, and the only way they could do that was to use a low load

forecast and IPP financing to make Site C more comparable with the

higher-cost alternative portfolio that they were looking at. But that’s

just my supposition.

Can the minister or B.C. Hydro confirm the relative costs of IPP

power to the hydro power produced by the heritage assets?

Hon. M. Mungall: I appreciate the member’s question. I had to giggle a little bit,

because I think for several years when the NDP was in opposition, we

asked this very question of the former Minister of Energy, Bill Bennett,

particularly around the time when that government in 2009, 2008, was

changing legislation and opening up the floodgates, so to speak, for

independent power projects. The costs that B.C. ratepayers were having

to pay through these IPP contracts was quite concerning.

The average cost per megawatt hour for an IPP is $100, and the

average cost per megawatt hour for our heritage assets is

$32.

[2:15 p.m.]

T. Redies: Thank you to the minister for being so candid in that answer. It’s

quite a big difference.

Just going back to the suggestion that B.C. Hydro would finance

the IPPs. How would that affect Hydro’s debt position? And could we

possibly be in a situation, with a termination of Site C, where we would

see $4 billion in sunk costs and $1.8 billion in remediation costs go

onto…? I guess it’s a contingent liability. But then we would be looking

at potentially putting the debt of the IPPs onto Hydro’s balance sheet.

How would that work?

Hon. M. Mungall: I just want to preface this. Again, no decision has been made

regarding Site C. No decision has been made in terms of if we terminate

and then move with an alternative portfolio, exactly how we would do

that.

The BCUC did presuppose, I’m guessing, that somehow it would be

B.C. Hydro that would take on development of that portfolio. Like the

member, we also have the same question of: why did they presuppose that?

It has not been done like that for well over 30 years. So why? And

hopefully we’ll get those answers. Actually, I’m sure that we’ll get

those answers from BCUC. I do respect their strong

professionalism.

The member is curious. If B.C. Hydro did have to finance the

development of an alternative portfolio, would they incur debt on their

balance sheet? And yes, if they were financing it, absolutely. Any debt

incurred as a result of that financing would be on B.C. Hydro’s balance

sheet.

T. Redies: The past practice, of course, has been negotiating contracts with

IPPs. They pay for their own capital costs, and they recover a price

from B.C. Hydro for the energy they produce. In this circumstance, the

IPP…. The total cost of that replacement power would go onto Hydro’s

balance sheet as debt. So wouldn’t that significantly impede Hydro’s

ability to get to a 60-40 debt-to-equity, which is the current

plan?

[2:20 p.m.]

Hon. M. Mungall: If B.C. Hydro had to take on the financing of any alternative

portfolio, would it impact the debt-to-equity ratio that’s currently in

place to meet the target that’s in place of 60-40? The answer, in short,

is yes. I want to reassure the member, though, that there has been no

decision that that would be the way forward. In fact, we are exactly

where I said earlier, which is that BCUC has made an assumption, we are

seeking further clarification on that assumption, and we’ll be doing

analysis accordingly.

T. Redies: Thank you, Minister, for that. I think, again, we all understand

that you have not made a decision yet. What we’re trying to get to is

sort of what the level of due diligence is and the questions that are

being asked, before that decision is made.

My learned colleague from Saanich North and the Islands would like

to ask a question, so I’ll pass it over to him.

A. Olsen: In listening to the line of questioning…. Perhaps I’m not quite as

learned but curious — curious to maybe the other aspects from the line

of questioning that the member for Surrey–White Rock has been

asking.

The suggestions that these investments in alternatives would be

something that B.C. Hydro would take on a loan is something that I’d

like to challenge. In my time around here, and in my time as the interim

leader of my party, I met with a number of investors whose money and

capital was literally locked at the border. It wasn’t able to be spent

in our province because B.C. Hydro and the former government, the

apparent free-enterprise coalition, were not allowing that money to be

spent in here because they had other ideas.

The number of meetings that I had…. Frustration was expressed with

respect to the fact that they couldn’t invest in our province and

exploit the resources, the alternatives, that we had — so $1 billion in

one case, or $800 million in one case, for projects here. There are

multiple billions of dollars that want to invest in the north Island, in

a storage facility that hasn’t been able to be invested in.

I just want to know. I guess I would like to hear your philosophy

or, going forward, the different approach that you might take from the

others to say that maybe this is not going to be entirely an investment

that B.C. Hydro makes, but perhaps there are other investors in this

province that we want to welcome in. By using the call for power, maybe

we don’t need to pay the amount that was suggested, $100, but we could

put it out to the marketplace to see if they would come in at a

competitive rate.

[2:25 p.m.]

Hon. M. Mungall: Absolutely. I mean, government and B.C. Hydro, regardless of which

party is in power…. Government is aware of the high level of interest of

investors in renewable energy for this province. We have tremendous

opportunity, and that’s why part of my mandate letter is all about

building that road map. What is the future in terms of our renewable

resources when it comes to energy production?

That being said, the member asked what our philosophy is.

Generally, a particular philosophy might be outside the scope of an

estimates debate, but I think we can be quite clear on that, as we

committed to making life more affordable for British Columbians. So

whatever we do going forward in terms of building that road map, we are

going to be making sure that it’s through the frame of what is

affordable for British Columbians.

At the end of the day, I know that the seniors on fixed incomes in

my riding have been telling me for years that they’re seeing their hydro

bills go up, and they’re really struggling to afford that, along with

increased costs of food, increased costs of car insurance, and so on. We

have to always keep in mind that affordability for British Columbians is

a top priority.

T. Redies: Just if I can also add in here, we’re actually not supporting the

idea that B.C. Hydro would take on the financing for independent power

producers. In fact, we’re challenging the BCUC comparable portfolio that

has this in as a way of making B.C. Hydro power more expensive through

Site C, more expensive than the comparable alternative that they’re

putting forward. So I think we’re on the same page.

I think what was also interesting is the minister’s last statement

about affordability, given that the IPP costs of power relative to

heritage hydro costs are about three times more expensive with the

numbers that she gave me. In opening up our energy needs to other

independent power producers and potentially financing them, how is that

going to be more cost-effective than a hydro dam that we can amortize

over 70 years?

Hon. M. Mungall: The member is absolutely correct to point out that we have to do

our due diligence in analyzing the difference in costs — to meet our

future generation requirements — between an IPP or an alternative

portfolio and the existing Site C, as well as heritage assets. We are

definitely doing that.

[2:30 p.m.]

To be honest, being aware of what IPPs have historically cost, we

also need to keep in mind that prices for some of those technologies are

coming down. So to say that they are still at $100 perhaps isn’t quite

fair, especially if we’re looking at maybe five, ten, 15, 30 or 70 years

into the future. What is our forecasting for that? But as it stands, we

are doing that due diligence to ensure that we are comparing those

costs, because we need to make sure that rates are affordable for

British Columbians.

T. Redies: Thank you for that, Minister.

The alternative portfolio put forward by the BCUC also suggests

that B.C. Hydro could use aggressive conservation tactics to reduce

energy consumption. Are the minister and B.C. Hydro comfortable that

they can deliver this much energy through conservation? I think it would

be around 700 megawatts.

Hon. M. Mungall: The 700 megawatts of demand-side management that was assumed by

the B.C. Utilities Commission in their review of Site C is aggressive.

It is an aggressive assumption, and it’s based primarily on involving

load curtailment at peak hours.

They would, day to day, I guess, see more people, perhaps, turning

their dishwashers on at midnight or at 10 p.m. rather than at 8 p.m. Or

they would see, maybe, people cooking at 6 p.m. but not turning the TV

on, or something like that — some type of broader, very aggressive

educational program that would have people turning more power off at

those peak hours in the day. Essentially, they would see their

demand-side management really having a massive shift in human

behaviour.

T. Redies: Yes, that would be a massive shift, and I doubt it could be just

an education program in order to get behaviour to shift. I suspect that

B.C. Hydro would have to implement some aggressive differential pricing

strategies, intraday pricing strategies, in order to shift that

behaviour.

Can the minister or B.C. Hydro provide some indication as to the

extent to which they think prices would have to rise in order to curtail

demand, based on their empirical price elasticity modelling?

I know there has been a little bit of dispute back and forth with

B.C. Hydro and BCUC on the validity of their price elasticity modelling,

but it is empirical, and I would like to understand how much prices

would have to rise in order to achieve that curtailment of demand and

also, perhaps, some comment from the minister as to how that would work,

given the government’s desire to produce more affordability for British

Columbians.

[2:35 p.m.]

Hon. M. Mungall: I understand that the member opposite is getting to the issue

around time-of-use pricing, which is a scenario that the BCUC did put

forward in terms of how you could meet that demand-side

management.

First, I’d like to say that governments of any level always look

at types of incentive programs that can alter behavior to do something

that would be beneficial. For example, when I was on Nelson city

council, we wanted people to recycle more, so not only did we institute

door-to-door pickup, which incentivized people to recycle more, but we

actually started charging for garbage. It was $1 a bag, and it was free

to put out recycling. We actually saw a reduction of recyclables in the

waste stream by 95 percent. So that’s a good example of a program that

can incentivize behavior change.

B.C. Hydro actually has done some pilots, some experimenting to

determine whether time-of-use pricing can incentivize demand-side

management. What they’ve found is that it’s actually extremely

difficult. They didn’t see a tremendous amount of behavior change,

because people come home from work and they make dinner at six o’clock.

I’m hungry at that time, and I’m sure the member opposite is, as well,

when she gets home. When you start cooking, that is what requires a

large load of electricity in the home.

BCUC, when it talked about time-of-use pricing, looked at both

industrial and residential, doing some work around that. We have

actually asked further questions around the industrial side — if they

could illuminate for us more of what they were thinking on the

industrial side.

When it comes to time-of-use pricing, overall what B.C. Hydro has

on that issue right now is that they don’t have a policy. They did a few

pilots, a few experiments on this issue, and found that if we are going

to use that type of policy mechanism to alter behavior so that — rather

than have such high peak loading at certain points of the day but

actually try to level it off throughout the day, it’s very, very

difficult.

T. Redies: Thank you, Minister, for that very candid answer. I think that’s

why they say electricity is very price inelastic.

[2:40 p.m.]

It’s because people need the electricity at certain times of the

day. I would have been surprised if you had been able to model a

scenario where prices were high enough that people stop cooking at six

o’clock in the evening.

With all due respect to the BCUC, they were asked to find a

comparable portfolio to Site C, but it kind of debunks the validity of

that portfolio if the empirical evidence suggests that you can’t price

electricity high enough to actually curtail demand at the peak

periods.

From my perspective — and again, I’m not trying to be

disrespectful to BCUC — it calls into question the whole purpose of the

BCUC report, because it seems increasingly that Hydro can’t use the

comparable portfolio. They won’t be financing IPP producers — at least

they’ll try not to, I’m sure.

It just seemed to be a very…. I’m not sure if it’s been as helpful

an exercise. I think what we are seeing here, what has happened, is that

the BCUC has essentially tried to put a square peg into a round hole in

order to come up with a comparable unit energy cost. It was only by

using somewhat unrealistic assumptions that they could do

that.

I do want to talk a little more about this conservation and its

impact on energy, because if it’s hard to get people to reduce using

energy, then perhaps it’s easier to get industries to stop using

energy.

I wonder if the minister could speak to industry curtailment in

that context and what that would mean for industry in our province,

potentially. What would it mean for the competitiveness of our

energy-intensive industries in this province?

Hon. M. Mungall: In the BCUC proceedings, the Association of Major Power Customers,

which are primarily the pulp mills and some of our major mines, did

actually propose industry curtailment — so demand-side management from

the industry side. They saw that as a possibility to address some of the

future capacity that would be needed.

[2:45 p.m.]

That being said, B.C. Hydro has also done pilots with industry

over the years, and not surprisingly, industry has been very, very keen,

as you would expect, based on that submission to the B.C. Utilities

Commission. Those pilots, for the member’s information, have typically

focused on offering industry savings, particularly when rates were high,

looking at ways to offer them savings to their bottom line.

I would say, overall, that industry has been quite keen on seeing

opportunities for curtailment.

T. Redies: Could the minister speak to what it cost Hydro to do that type of

incentive for industry?

Hon. M. Mungall: I’m just going to answer a previous question that the member asked

while we’re searching for that information that she just asked for. This

is about the wind farms and the amount of land that they would

use.

To give you an example of what’s actually happening here in B.C. —

I’m hoping I’m pronouncing this correctly because it can be pronounced a

few different ways by its spelling — the Meikle wind farm up in the

Peace region near Tumbler Ridge is 400 megawatts, generated by 61 towers

on 750 acres of land.

T. Redies: Thank you for that information. I guess in B.C. we’ve been able to

do things much more cost-effectively than perhaps some places in the

United States.

Today, Minister, we heard from Governor Inslee. He spoke to the

successful $200 million and soon to be $300 million carbon fibre plant

in Washington — the largest in the world. It might be interesting for

you to hear why the company located in Washington. In fact, when asked,

the German executive who’s leading the project said that in respect to

the additional $100 million that was announced just recently by early

next year — drawn by the cheap and renewable hydroelectricity of eastern

Washington — this state will have the largest carbon fibre plant on

earth.

Would the minister agree that access to cheap, reliable power is

important to not just traditional industries but also to the industries

of the future? And how will we attract industries like this in the

future if we go down the path suggested with the comparable alternative

energy portfolio by the BCUC?

Hon. M. Mungall: I mean, absolutely, this government wants to ensure that B.C.

always remains competitive for our traditional industries as well as

emerging industries, and making sure that we’re competitive in terms of

price of power as well as a variety of other issues that do impact

investment decisions we are very aware of.

T. Redies: In estimates the week before last, the minister clearly indicated

that the cost of electricity was very important in terms of the

viability of mines in our province. The minister also mentioned the

challenges of carbon tax on the viability of mines, as they are with

other energy-intensive industries.

[2:50 p.m.]

Would the minister agree that B.C.’s low-cost power has been a

comparative advantage to the province in terms of attracting and

supporting energy-intensive industries? And if yes, are you not

concerned about another potential policy decision that ratchets up

electricity costs on the viability of mines and the communities they

operate in?

Hon. M. Mungall: Again, absolutely this government is aware of the value of pricing

for energy when it comes to attracting investment from existing

industry, new emerging industries. Just to give an example of that, when

commodity prices were low in the mining sector, for our major mines, we

actually did put in a special plan for them so that we could retain

them.

T. Redies: It reminds me now that the minister didn’t get a chance to answer

my last question, which was: how much does it cost for these incentives

to get industries to curtail their use of power?

Hon. M. Mungall: Perfect timing for coming back to that question because we

actually just got the numbers for her. It was $14 million for two years

for those pilot projects with industry in terms of curtailing their

load. In fiscal ’16, we were able to reduce their load by 126 megawatts

and in fiscal ’17, by 83 megawatts, for the total cost of $14

million.

T. Redies: I think that we’d pretty much established, unless I’m mistaken,

and I believe that B.C. Hydro and the minister last week, or the week

before last…. The BCUC portfolio is not a portfolio that they would feel

comfortable pursuing. Is that still the case?

[2:55 p.m.]

Hon. M. Mungall: I would have to go back in Hansard to double-check, but

I’m fairly certain that I did not say that this government wouldn’t

pursue that particular portfolio that BCUC has put forward. Rather,

should Site C be terminated, what would B.C. Hydro be doing in terms of

pursuing alternatives? Would it pursue that illustrative portfolio that

BCUC has suggested?

Again, BCUC is very clear in its report that it is merely

illustrative. It’s not definitive. It’s not final, by any stretch, from

their perspective either. What would B.C. Hydro do in that scenario,

should Site C be terminated in terms of looking at other alternatives

for generating power? They would not likely go with the exact mix

suggested by BCUC. They would likely be looking at a different type of

portfolio.

T. Redies: Thank you, Minister. I think you’ve confirmed what we were

saying.

Yesterday the minister spoke that they were looking at these

alternative portfolios of power and that they could probably, through

these alternative portfolios, deliver the same power needs for B.C.

Hydro in a time that suited B.C. Hydro. Could the minister, or B.C.

Hydro staff, explain what type of alternative energy that they’re using?

Is it wind? Is it solar? Is it geothermal or pumped-up storage? Just

give us a flavour of what they are looking at.

Hon. M. Mungall: In B.C. Hydro’s submission to the B.C. Utilities Commission, their

alternative portfolio was wind, plus pump-storage. I would add that

conservation measures were included in that portfolio as well as their

Site C portfolio, so conservation is included in all of B.C. Hydro’s

portfolios.

Wind and pump-storage. The reason why B.C. Hydro has gone with

wind and pump-storage as opposed to, say, solar, is that this is the

most economical at this time. We’ll see what maybe happens to solar in

the future, several years down the road, but wind, at this time, would

be the better alternative according to B.C. Hydro.

T. Redies: Thank you for that answer, Minister. If wind power and pumped-up

storage was a better alternative to Site C, why did B.C. Hydro put Site

C forward and not a combination of wind power and pumped-up storage and

conservation?

[3:00 p.m.]

Hon. M. Mungall: The process under BCUC required B.C. Hydro to look at alternative

portfolios, so they did. They looked at the best alternative to Site C.

From their calculations and from their analysis, it was a wind and pump

storage.

T. Redies: Sorry. I probably wasn’t clear enough in my question. If that’s a

better alternative to Site C, then why did they not put that forward to

government back in 2014, when this decision was initially recommended

forward to government?

Hon. M. Mungall: This particular portfolio was put before government in 2014 for

consideration.

T. Redies: Why was it not chosen?

Hon. M. Mungall: Unfortunately, I don’t see anything anybody in the House right now

who may have been involved with that government in 2014. You would need

to ask them.

T. Redies: I’m sorry, but there is a B.C. Hydro executive sitting next to the

minister who I think knows the answer to this question.

Hon. M. Mungall: I understand that the member opposite expects that the executives

here from B.C. Hydro are able to give an answer to the particular

question. Maybe she wants to rephrase it. What I’m hearing from her is

why government in 2014 made a decision the way that they did. B.C. Hydro

is just not able to comment or to speak for that government at that

time. That government made that decision at that time. I mean, I don’t

know why they did that. Only they do.

M. Bernier: I was one of the people that was around when this discussion was

happening, so I’m very aware of the comments that were made. Maybe the

minister, then, could ask again a bit more directly, since she has the

members, albeit not the original president at the time but was

definitely involved with the discussions. What was the final advice that

was given from B.C. Hydro to government as the best

alternative?

Hon. M. Mungall: The recommendation of B.C. Hydro at the time, under its leadership

at the time, was to move forward with Site C.

T. Redies: Why was Site C recommended forward over the other alternative

energy portfolio that B.C. Hydro is now currently looking at?

[3:05 p.m.]

Hon. M. Mungall: B.C. Hydro, at the time, believed that Site C was a more

cost-effective project.

T. Redies: Thank you for the candour in that answer, Minister.

Is the minister aware that under the Clean Energy Act, one of

B.C.’s energy objectives is to achieve electricity self-efficiency? With

the alternative portfolio that B.C. Hydro is considering — alternative

to Site C, rather — could we be guaranteed that B.C., the province,

would be self-sufficient in electricity in years to come?

Hon. M. Mungall: The answer is very short for the time we took. I apologize for

that. The answer is yes. The alternative portfolio does comply with the

current Clean Energy Act.

T. Redies: The fact that Site C was more cost-effective in 2014. Does it

remain more cost-effective in the current environment, from B.C. Hydro’s

perspective?

Hon. M. Mungall: I do believe that I’ve answered this several times. That is

precisely something that we’re looking at as part of our decision-making

process — is if it does remain cost-effective.

T. Redies: So if it remains cost effective, does that mean that the

government…? If Site C proves to be the most affordable solution for

B.C. ratepayers, will the government proceed with Site C?

Hon. M. Mungall: I just can’t pre-empt a cabinet decision like that.

T. Redies: I’m surprised. I think that I heard from both the Premier and

yourself, Minister, that affordability was the most important criteria

for British Columbians. So one would think that it would be a relatively

straightforward answer — that if Site C is more cost-effective than any

other alternative, that would be the decision that the government would

make. But I see that the minister does not want to answer

that.

[3:10 p.m.]

I will move on, just briefly, to the opportunities for our energy

in other markets. B.C. Hydro has a subsidiary called Powerex, which, as

we probably know, trades power with other energy jurisdictions. Can the

minister or B.C. Hydro staff inform us as to how much Powerex has

contributed to the bottom line over the last five years? Ballpark is

fine. And on average, can you also provide us with how much power they

do sell to other jurisdictions?

Hon. M. Mungall: The amount of power sold varies by year. It’s not as

straightforward as we might think. We’re going to get you those numbers,

and if we don’t get them to you by the end of today, we’ll definitely

send you a letter with that detail. In terms of the profit, though, it’s

around $120 million each year. I hope that answers the member’s

questions.

T. Redies: That does. So $600 million a year. Would the minister or B.C.

Hydro confirm that that actually helps British Columbia in terms of

keeping rates low?

Hon. M. Mungall: Yeah, absolutely. Powerex’s income is consolidated into B.C. Hydro

for that very purpose — keeping rates low.

T. Redies: On that basis, would it not be beneficial to have surplus power to

sell to other jurisdictions through Powerex?

Hon. M. Mungall: The question from the member, I feel, is a little bit simplifying

an issue that is extremely complex. Having been a board member at B.C.

Hydro, I think she knows that selling and buying power is actually a

very complex endeavour. Just because you generate more power, it doesn’t

necessarily mean that you’re going to be able to sell it at a profit for

ratepayers.

No surprise that there is some difference of opinion between B.C.

Hydro and BCUC as well as experts around the province in terms of: “If

we just generate more power in B.C., well, can’t we just sell it at a

profit and reduce rates for ratepayers?”

[3:15 p.m.]

Because there are those differing views in terms of price, in

terms of market, we’re taking all of that into consideration as part of

our broader decision-making process around Site C.

T. Redies: All right. California is going 50 percent plus solar. Of course,

one of the challenges with that is that the sun goes down at night, as

we know. Can the minister or B.C. Hydro speak to the opportunities for

B.C. Hydro and Powerex with the California policy? Also, could they

speak to what they think the potential is with Alberta’s new policy to

close down the coal-fired plants?

Hon. M. Mungall: We have the answer to the member’s previous question around the

amount of power that’s typically sold by Powerex. Last year, in fiscal

’17, the surplus sales were 5,756 gigawatt hours and $133 million. Those

are the exact numbers.

In terms of the member’s question about selling power to

California and Alberta as they move to embrace more renewables, I’m

happy to talk a little bit about that, actually. Obviously, both

California and Alberta are important markets, where flexibility will be

needed, especially as we go to renewables that are intermittent, and

Powerex absolutely does view that.

In Alberta, though…. The member opposite will know, because I

learned in a conversation with her that she spent some years in my

hometown of St. Albert, Alberta. Alberta is actually presently moving

their electrical generation, not to more intermittent power as much as

they are moving to natural gas. As they shut down coal, they’re actually

bringing on more natural gas. Alberta has hundreds of years of natural

gas available to them. They are also ramping up wind power. She’ll know,

from living in Alberta herself, that the wind certainly blows almost

everywhere in that province, so they have ample wind

resources.

Interjection.

[3:20 p.m.]

Hon. M. Mungall: I see one member disagrees with that. I lived there for 23 years

of my life, travelled the entire province to all of my family members.

The wind was very, very ample throughout the year. That, of course, is

the Alberta government’s analysis, as well, and the reason why they’re

moving to wind.

Interjection.

Hon. M. Mungall: I assure the member, who is adamant, that that’s not the case —

that I’m not making up that information at all.

That’s what they’re doing, and California is moving to solar. But

if we generate more power in B.C., can we just start shipping it

elsewhere? There are other factors involved with that, including power

lines and inter-ties, and so on. Would they be able to handle the

capacity and the load?

Those are all questions that have to be involved with that type of

analysis. As we want to build B.C.’s energy resources, are we going to

be able to get it to other jurisdictions, and what would that take to do

so? I wouldn’t want to leave her with the impression that it is just a

matter of: “Great, we build more power, and we send it off through the

lines.” We need to make sure that those lines can handle the load, as

well, and that other jurisdictions are wanting our power.

T. Redies: I’m very glad that you brought that up, Minister. Actually, in the

B.C. Hydro submission, I believe, to BCUC, they indicated that they had

an operational capacity of export lines from B.C. to Alberta and the

U.S. that allows approximately 26,000 gigawatt hours of annual surplus

to be exported. Site C’s energy averages about 5,300 gigawatts, so it

would seem that there is a lot of surplus, unless those lines are not

operating properly. It seems, by B.C. Hydro’s own admission, that they

do have capacity.

I’m conscious of the hour, and I’m sure the minister would be very

happy if I came to some conclusion on my questions. I will do that, but

I do still have a lot of questions that I would like to submit to the

minister in writing and ask respectfully that she and her staff come

back with written answers prior to the decision around Site

We’d also like to see the answers to the questions that were sent

to BCUC. I imagine that they’re going to be public, but I just want to

make sure that we also see the answers to those questions. We’re asking

all of these questions not to be difficult but to just show the amount

of due diligence that is involved in making this decision.

I want to say that from this side of the House, obviously, we’re

supportive of Site C, and we would like to see it go ahead. I would just

like to read into the record the joint review panel’s findings about

Site C. After 3½ years of researching this, both environmentally,

economically and financially, the joint review panel found that the

benefits are clear.

“Despite high initial costs and some uncertainty about when the

power would be needed, the project would provide a large and long-term

increment of firm energy and capacity at a price that would benefit

future generations. It would do this in a way that would produce a

vastly smaller burden of greenhouse gases than any alternatives, save

nuclear power, which B.C. has prohibited.

“The project would improve the foundation for the integration of

other renewable, low-carbon energy sources as the need arises. The

project would also entail a number of local and regional economic

benefits, though many of these would be transfers from other parts of

the province or country. Among them would be opportunities for jobs and

small businesses of all kinds, including those accruing to Aboriginal

people.”

Minister, on that note, I would like to request again that we be

able to submit the balance of our questions and that they be returned to

us in writing before the Site C decision is made.

I would like to thank the minister and the B.C. Hydro staff and

the minister’s staff for this opportunity to discuss Site C at

length.

[3:25 p.m.]

Hon. M. Mungall: Without seeing any of the questions or the volume of questions,

all I can commit to is that we’ll get the answers to her as soon as we

possibly can.

In terms of what BCUC’s answers are to the deputy minister’s

questions to them, they will be posting them on their website. They’ll

be able to access it as soon as, likely, we will as well.

T. Shypitka: I don’t really want to call a recess right now, but I’ve just got

maybe one or two questions on compliance and enforcement with mining. So

if the minister could bring her staff in for that, that would be great.

Appreciate it.

I guess I started this marathon; I might as well finish it off

here today. Thank you once again, Minister, and thank you to her staff

for all the time that they have put into this. It’s been a little longer

than we thought, but lots of valuable information has come out of

it.

A couple of weeks ago I asked the minister a question on

goal-setting, because the former government set some fairly aggressive

goals in mining. I wanted to know if the minister and the ministry had

set any goals of their own. The minister stated that the industry wasn’t

interested in hard numbers and hard goals, that they’re interested more

in sustainability and being competitive is what their priority is. I

think that’s great. I think we all understand that sustainability is

part of the industry.

She also mentioned that commodity prices are the determining

factor for industry, which is very apparent. If commodity prices are a

determining factor for industry and sustainability is the government’s

primary objective, how does the minister propose to bring sustainability

to the mining industry when commodity prices are obviously out of her

control?

Hon. M. Mungall: The member’s point is exactly the type of conversation that would

be had at the mining jobs task force. By no means do I think that I know

everything. In fact, bringing a group of people together who live and

breathe this industry every day is exactly why we want…. To answer these

questions, we want to bring them together to do just that.

We’re just working on the terms of reference for the mining jobs

task force. We’re in very initial conversations with industry

associations. We’re all very excited to get this task force up and

running in the new year so that we can start answering these very

questions.

T. Shypitka: Last time, when I asked about roadblocks, hurdles — i.e., on the

opposite side, what makes the industry more sustainable — the minister

told me to check with MABC and the AME, which I told her I’d already

done. I did go back. I took the minister’s advice, and I did check with

some of the industry.

I’ve been a business person my entire life. I know a lot of

business people, and some of them are actually in the mining industry,

so I have gone back. The minister stated that she goes and sees the

industry on a regular basis. I have found out what are two issues on

sustainability in the mining industry. I would just like to ask the

minister if she knows what those two points would be.

Hon. M. Mungall: I would hope we don’t need to really do this type of quiz time in

estimates. If the member wants to share what his conversations were, I’m

happy to hear it.

T. Shypitka: Well, not so much of a quiz. The minister said that she’s in touch

with industry all the time. She’s mentioned that sustainability is the

number one priority and objective, and she talks to industry quite a

bit. So I would think that those answers would come to her. But I’ll lay

it out.

[3:30 p.m.]

The first one was time. We’ve all heard the expression that time

is money, and it’s no different in mining. As a matter of fact, the

MMPO, the major mines permitting office, mandate is to bring clear

accountability to both industry and government to ensure that timely and

durable decisions are made with respect to permitting major mines of

B.C. So we need a streamlined process — that’s one of the issues of

sustainability I heard — and we need it from start to finish, from

exploration right to reclamation.

The second one I heard was a consistent framework on

decision-making. Industry is okay with compliance and enforcement. It

serves us all well, as long as it’s consistent with the projects they

have been permitted with.

Would the minister agree that these two points would assist

industry in sustainability?

Hon. M. Mungall: I would say that if the member has had an opportunity to read my

mandate letter, he would see that both of those issues are actually in

the mandate letter.

We want to ensure that we’re getting projects to fruition in a

timely manner. We want to make sure that compliance and enforcement are

also working with industry, as well as an appropriate regulator for

communities, so that it’s consistent across the board and so that

everybody understands exactly what to expect.

T. Shypitka: Thanks, Minister, for that.

Would the minister also agree that the people that work in

permitting have literally hundreds of issues to deal with in the

permitting process?

Hon. M. Mungall: Permitting is a complex process, as it has been for many, many,

many years. It’s one of the reasons that industry is able to boast that

products mined here in B.C. have better standards than mines in other

jurisdictions as well.

T. Shypitka: The minister stated that her ministry was going to act on all 17

recommendations that were set out by the Auditor General. The overall

recommendation that the Auditor General laid out was to “create an

integrated and independent compliance and enforcement unit for mining

activities, with a mandate to ensure the protection of the environment.”

The expectation is that this new unit would not reside within the

ministry.

Based on the minister saying that she was going to follow through

with all of the Auditor General’s recommendations, when does she expect

to see the independent unit separated from Energy and Mines?

Hon. M. Mungall: We’re working on that very issue in terms of what that independent

oversight is going to look like. We have not made a decision as of

yet.

T. Shypitka: That’s where it gets a little bit muddy for me. You were quoted as

saying in the House, in reference to compliance and enforcement…. The

last time we were here you said: “What we are looking at are different

models around the country. Most other jurisdictions don’t have the

people who are permitting also doing compliance and enforcement.” You

also went on to say: “That’s what B.C. has done for quite some time, and

that’s exactly the issue that we’re trying to deal with so that people

who are doing the permitting are not the same who are doing the

compliance and enforcement.”

It’s clear to me that the minister wants compliance and

enforcement removed from the ministry. The Auditor General’s

recommendation is to remove it as well, which the minister

supports.

A two-part question here. What other different models in Canada

are you looking at that don’t have the same people who are permitting

and those that are in compliance and enforcement?

[3:35 p.m.]

Hon. M. Mungall: Just on the member’s question, I heard him read back what I said.

I did hear him start to extrapolate in terms of what the decision would

be. As I said, there is no decision that has been made. So where a

compliance and enforcement unit would lie is a decision that has yet to

be made. It has not been made.

Some of the models that we are looking at…. We’re looking at how

things are done at the Oil and Gas Commission. We’re looking at how

things are done in Ontario and in Quebec. Just as some examples in terms

of other models that he’s interested in.

T. Shypitka: So you’re saying that in Ontario and Quebec, compliance and

enforcement are separated from the permitting. The people that do

permitting are separated from the people that are doing compliance and

enforcement in Quebec and Ontario.

Hon. M. Mungall: In Ontario and Quebec, those who do permitting are not the same

people who do compliance and enforcement. Those people are not the same.

They are reporting to different supervisors and up the chain.

T. Shypitka: They’re within the ministry. All right. Are there any others in

Canada? You said most jurisdictions in Canada. So that’s two of 14, I

guess.

Hon. M. Mungall: We don’t have all the jurisdictions that we’re looking at right

now. Obviously, there are provincial and territorial, but how each one

does it is different.

We’re happy to get the member those answers and that information

at a later date.

T. Shypitka: The previous government acted on 16 of the 17 recommendations by

the Auditor General. The one recommendation the previous government

questioned was taking compliance and enforcement out of the ministry as

an independent unit.

Senior ministry officials have been on the record. They’ve argued

that it makes a lot of sense to keep permitting and enforcement

in-house, as it requires specific knowledge gained working within the

ministry. Does the minister disagree with these senior ministry

officials?

Hon. M. Mungall: Again, no decisions have been made in terms of the exact model

that we’re going to be doing. What the two most senior officials may

have said in the past, in my mind, is not what’s relevant today. What

they are doing is working on this issue. They’re providing cabinet with

very good information, and no decision has been made yet.

T. Shypitka: What the minister is saying is there has been change in attitude,

I guess, in senior officials within mining in B.C. — that perhaps they

want to separate it. If the minister is suggesting that compliance and

enforcement be separated within the ministry, then it affects what it

does, really. It creates a silo. It creates separation.

Those who know…. You’ve said, just earlier, that people that are

in permitting deal with literally hundreds of issues. Very complex, as a

matter of fact, is what you said. I couldn’t agree more. It is very

complex. Therefore, there’s an integrating system in place that provides

information. The people that do the permitting understand what the

compliance side and the enforcement side should look like because

they’re the ones that permitted it in the first place. To separate it

creates this division, this non-integration of

decision-making.

[3:40 p.m.]

To the minister, what would be so terribly wrong with having a

board of senior officials from the Environment and Mines ministries as

well as the environmental assessment office to oversee compliance and

enforcement?

Hon. M. Mungall: Thanks to the member for the suggestion. Again, we are working on

this issue.

T. Shypitka: All right. Final question. Why are we considering adding costs? If

we’re going through this special task force, some of this seems to be a

foregone conclusion. Why are we considering adding costs, timely delays,

which we have already stated and already decided are part of

sustainability — time is money — and disconnected information? Why are

we considering that?

Hon. M. Mungall: These are very important recommendations by the Auditor General.

It looks at very serious compliance issues that have happened over the

years, such as Mount Polley. And we all know what happened

there.

In terms of adding time and cost and reducing sustainability,

reducing competitiveness, when we have a clear process and strong

compliance and enforcement that allow the sustainability of our mines,

we are not adding problems to the industry. We are building the industry

up.

T. Shypitka: Well, noting the time, I don’t want to get into the Mount Polley

thing. We would like to conclude. This side of the House would like to

thank the minister and her staff for all the time that they’ve put in

place. I’d like to thank my side, as well, for doing all the work they

did. I know this took a little bit longer than we’d thought, but we

appreciate it and thank the other side very much.

Hon. M. Mungall: Just some closing comments. This has been quite the marathon of

budget estimates. I don’t think, in my time, I’ve ever seen estimates

for one particular ministry go on as long as this has, but I appreciate

that there is a lot of detail. I really want to thank the member for

Surrey–White Rock, who has done a tremendous job in terms of asking very

detail-oriented questions about a major decision that impacts all

British Columbians. I appreciate the questions that she brought forward

on that issue.

I want to thank all the members of the opposition, as well, for

their questions. This is an important process in government and to

ensure that we are able to drill down and understand what happens in the

ministries. I especially want to thank all of the staff who have

supported answers for the members opposite over the last several days. I

also want to thank my ministry office staff and my constituency office

staff, who I know are also watching and supporting this process any

which way possible that they can.

With huge thanks to everybody, I now move the vote.

Vote 21: ministry operations, $95,006,000 — approved.

Hon. M. Mungall: I move that the committee rise, report resolution and completion

of the estimates of the Ministry of Energy, Mines and Petroleum

Resources and ask leave to sit again.

Motion approved.

The committee rose at 3:44 p.m.

The House resumed; Mr. Speaker in the chair.

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

granted leave to sit again.

[3:45 p.m.]

Hon. M. Farnworth: I call committee stage on Bill 15, the Local Elections Campaign

Financing Act.

Committee of the Whole House

BILL 15 — LOCAL ELECTIONS

CAMPAIGN FINANCING

AMENDMENT ACT, 2017

The House in Committee of the Whole (Section

B) on Bill 15; R.

Chouhan in the chair.

The committee met at 3:47 p.m.

Hon. S. Robinson: Before we start, I just want to give kudos and thanks to my staff

who are here with me today in the House. I have, to my left, Tara

Faganello, the ADM, local government. I have Lesley Scowcroft and Nicola

Marotz, who have been stellar in helping us develop this bill to this

stage.

Section 1 approved.

section 2.

T. Stone: I, too, will start off by acknowledging the good work of the

minister’s staff and again thank the minister’s staff for the time that

they made available to me and some colleagues ahead of time in

preparation for going through this bill.

Section 2, if I understand correctly, removes a

section that

specifies that election advertising that does not fit into the other

subsections counts the sponsor as the individual or organization that

transmits the communication. I’m not absolutely certain that that’s the

reason for this section. I’m wondering if the minister could just

elaborate briefly for the benefit of the House as to exactly what the

purpose of this particular

section is.

[3:50 p.m.]

Hon. S. Robinson: The intention of this amendment is to ensure that small-scale

advertisers, like those who make a handmade election sign and choose to

display it in their window, can engage in political self-expression and

are not captured as third-party advertisers to ensure consistency with a

Supreme Court of Canada decision made in January of this year. It also

provides some consistency with the approach that we’re taking in the

provincial act.

Section 2 approved.

section 3.

T. Stone: With respect to

section 3, I’m wondering if the minister could

describe in a little bit of detail what sort of non-monetary services

would now be exempted as contributions.

D. Routley: I seek leave to make an introduction.

Leave granted.

Introductions by Members

D. Routley: I’d like to introduce a family that I just met in the building. As I

like to do from time to time, I like to tour tourists through the building

and show them what we do, how we do it and the back end of the building.

This family were particularly interested.

I’d like to introduce Edward Corallo. He’s a retired money manager.

Don’t you think all good money managers end up retired at a young age? He’s

pretty young. Tracy Corallo, his wife, is a substitute teacher — the

dangerous profession of substituting in a class you don’t know. Their

daughter, Alexandria, is a student, a grade 11 junior in high school.

They’re all from Moraga, California. Can the House please make them welcome,

and we’ll send them a copy of this.

Debate Continued

Hon. S. Robinson: In this section, there is no policy change here. It’s really for

clarity, and it’s a consequential amendment. So for example, if you’re

running your campaign and you wanted to use your own printer, that would

be fine. It was just about making sure what was understood about

non-monetary, and that your own equipment that you would normally have

was not considered a campaign contribution.

T. Stone: Again, just to be absolutely clear, this is if the individual in

question has a piece of equipment or something that they own themselves

that they want to use in their campaign. However, this would not include

another person saying, “Hey, I have a computer for you. You can use it

during the campaign,” or: “I have a car that you can use for the period

of the campaign.” Can the minister just be absolutely clear with me that

I’ve got that right?

Hon. S. Robinson: The member is correct. It’s about your own use of your own

equipment.

Section 3 approved.

section 4.

T. Stone:

Section 4, again, if I understand correctly, creates rules that

only an eligible individual may pay for a fundraiser, and any ticket

greater than $50 becomes a campaign contribution. I see the staff

nodding, so that’s good.

It also creates the loan framework where permissible loans are not

contributions, but loans from individuals count towards their annual

limit. I’m just wondering, under this section…. I want to be absolutely

clear. So one person could buy any number of tickets to a fundraiser as

long as the total cost of those tickets does not exceed $50. Is that

correct?

[3:55 p.m.]

Hon. S. Robinson: I think it’s important to be clear on this point. It’s not about

the number of tickets. It’s just about the payment. So as soon as you

spend more than $50, the rest of whatever you’ve purchased is considered

a campaign contribution.

T. Stone: Again, part of what I’m trying to do through this, as well, is

just reconcile the approach that’s being taken with this piece of

legislation and the other legislation that’s before the House with

respect to the provincial campaign finance limits. There are a lot of

similarities — the banning of union and corporate donations. Lots of the

details are the same, but there are some differences, and I just want to

understand the difference in approach.

My understanding is that

whereas with this bill…. Again, the limit

is $50, but a person could purchase any number of tickets up to the $50.

On the provincial side of the equation, one contribution of any amount

under $50 is the maximum that can be made.

I’m just wondering if indeed I’ve got that correct. It’s a slight

difference between the two approaches. If there is a difference in

approaches, I’m wondering if the minister could provide some insight as

to why a slightly different approach is being followed here, with the

local government campaign finance reform, in comparison to the approach

being taken with the provincial campaign finance reform.

Hon. S. Robinson: I think it’s really important to recognize that while there are

some similar principles that are being shared right across these two

pieces of legislation, they’re very, very different, given that there

are over 200 different elections that occur for local governments and

the scale is very significantly different right across the many

different local elections that will take place next October. They’re all

very, very unique and very different.

What we’ve done with local elections is we wanted to account for

the vast difference that you might have and recognizing that there’ll be

smaller-scale fundraisers in local elections. So making this a little

bit different than what you’ll see in the provincial legislation is what

we have here.

T. Stone: Fair enough. Because this bill allows loans from individuals to be

made — and this

section is structured, if I understand it correctly, so

as to make a loan a contribution once it is past due — what protections

are being put in place or potentially being contemplated to ensure that

individuals or candidates will make the efforts to actually collect on

those loans?

Hon. S. Robinson: I think it’s really clear to understand here that if you don’t

collect on the loan and someone makes another contribution, then, in

fact, you’ve now exceeded your contribution limit. It becomes an

offence, which will trigger action from Elections B.C.

[4:00 p.m.]

I think everyone is motivated to follow the rules and live within

the guidelines that are set out here.

T. Stone: I was trying to determine in this proposed legislation if there is

any time frame specified in which a loan from an individual must be

collected. I didn’t see anything, but I may have missed it. I’m just

wondering if the minister could point me in the right direction on that

particular point.

Hon. S. Robinson: It’s really important when you receive a loan that you record the

date that you’ve received the loan. There’s a requirement to pay back

that loan within six months. If it remains unpaid for six months and no

attempts to recover the loan have been made, the loan is actually

considered a contribution.

T. Stone: Just wondering if the minister could indicate the rationale in

this piece of legislation for why individual loans are provided for, why

they’re allowed, when that’s not provided for in the provincial campaign

finance reform approach that her government has brought forward as

well.

Hon. S. Robinson: This speaks to, again, another difference, given that we have over

200 different elections that occur during the local elections next

October. So it’s really important that we have enough flexibility built

in, given the different size and scope of these various elections that

occur right across our province.

We thought it was very important to provide flexibility for local

election participants who may rely on loans from friends or family

members to finance their campaigns. Once again, we’ve made sure that

we’ve captured it within the limits, so that it’s reasonable, should

someone choose to not pay back the loan, it becomes a

contribution.

We’ve put in all of these other pieces. Again, it’s about creating

a level playing field, and we’re doing our best to be as flexible as we

can in this legislation.

T. Stone: One last question on this section. Could an individual actually

make a loan, say a $1,200 loan, but consider the due date for that ten

years down the road, just as an example? At what point does that loan

then transfer over to a contribution?

If there is an agreement in place, for example, between the

individual and the candidate.... Here’s a loan, and you’re going to pay

it over ten years. Is that allowed under this proposed legislation, or

are there specified time frames after which the loan automatically is

deemed a contribution?

Hon. S. Robinson: A loan automatically becomes a campaign contribution six months

after it becomes due.

Sections 4 and 5 approved.

section 6.

[4:05 p.m.]

T. Stone: Again, a really quick question. I think I know the answer to this,

but I just wanted to clarify.

I presume that this

section is here to deal with the very rare

situation of an individual trying to run for office in multiple

jurisdictions. The minister is saying she’s actually seen that? That’s

interesting.

Perhaps she could stand and just maybe tell me about the situation

where she’s actually seen it. But I would assume it’s a very rare

circumstance. Nevertheless, if she could confirm that that’s why this

section is here, that would be great.

Hon. S. Robinson: I’ve just double-checked with staff. There were about 30 people in

the last local elections that ran in multiple. Yeah, 30. I do have one

in my constituency, before my time, who ran for both school board and

council, and won in both. So I do think it does happen, and we wanted to

make sure that we had legislation that would ensure that there was some

clarity about which campaign was using funds appropriately — making sure

that they were using funds for their respective campaigns

appropriately.

T. Stone: Again, has the minister seen individuals try to run for, say,

school board and municipal at the same time or between two

municipalities?

Hon. S. Robinson: Believe it or not, there was one candidate in the capital regional

district that ran for mayor in every single municipality in the region.

And certainly in my community — it was a number of years ago — there was

somebody who was on council and on school board simultaneously. It’s

absolutely possible.

Section 6 approved.

section 7.

T. Stone: If I understand this

section correctly, it removes the ability of

an elector organization from having separate campaigns in multiple

jurisdictions, and making transfers between campaign accounts for

different campaigns, and changes loan to permissible loan.

This was mentioned in the briefing that the minister’s staff were

all too kind to provide me. It was indicated that this would prevent

elector organizations from transferring money between the council

campaign and the school board campaign, for example, in the same

community. We’re talking about a small number of communities where there

are elector organizations. I think they’re all mostly in the Lower

Mainland.

I just wanted to confirm. Is that the intent of this particular

section, to prevent those transfers within an elector organization from

one campaign to another campaign — i.e., school board to municipal or

vice versa?

Hon. S. Robinson: Yes, that is the reason for this. It’s about keeping these

campaigns separate.

T. Stone: That’s what I thought. In the past, depending on the community in

question, one has simply donated money to an elector organization, and

the elector organization obviously allocated those funds as the elector

organization saw fit.

Just wondering if the minister anticipates that this

section is

actually going to cause some concern, frustration or consternation

within these electoral organizations in certain communities where they

exist. Certainly, I’ve heard from a number of these electoral

organizations that have expressed a high degree of concern that this is

really going to limit their ability to really advance the core values or

the core positions of their particular elector organizations.

Just wondering if the minister has had that feedback. Has the

minister received any of that kind of push-back or concerns or red flags

raised by elector organizations that this will really limit their

ability to function as they have in the past?

[4:10 p.m.]

Hon. S. Robinson: What we’re doing here, because we have contribution limits now, is

making sure that funds that are collected for a particular campaign are

used in that campaign. If you are collecting funds for a particular

campaign, you can’t choose to then shift those funds to a different

campaign. So the intent here is to provide clarity and to make sure that

funds are used appropriately.

T. Stone: I guess, to put a finer point on it, perhaps the most common

pushback that I’ve received or concern that’s been flagged by some of

these electoral organizations is that this

section really will serve to

make it difficult for the elector organization to perhaps support some

of their lesser-profile campaigns than the bigger-profile ones. For

example, in Vancouver, the parks board is a much lower-profile campaign

in comparison to the municipal campaign that’s going on. In other

communities, it would be the municipal campaign being much more

prominent than the school board campaign.

Again, did the minister have some thoughtful discussions with a

number of these elector organizations and hear concerns raised by them

insofar as their ability to adequately support these lesser or

lower-profile campaigns adequately as a result of the changes that are

being proposed with this legislation?

Hon. S. Robinson: I think it’s important to recognize that the intent here is to

level the playing field so that all candidates have the opportunity to

compete fairly. That’s what this bill is about. It’s making sure that

you can’t use your higher-profile candidates, as the member suggested,

as a fundraising mechanism that then gets diverted to a lesser-known

candidate and what that does for the playing field for candidates who

might not be so aligned. This is really about making sure we have a

level playing field.

T. Stone: I’m wondering if the minister could let the House know if this

legislation will essentially require an elector organization to present

a very clear choice as to how they want their funds donated. For

example, if you’re in Vancouver and you want to support Vision Vancouver

or the NPA — for on-line contributions, for example — do there have to

be totally separate donation mechanisms to separate these contributions?

Or can a donor just donate $1,200 to Vision Vancouver or NPA, and the

electoral organization can distribute that donation as they see

fit?

Does the donation have to be specified that it’s going to a

specific candidate that’s running for NPA, or a specific campaign, let’s

say the school board, and they want the contribution going to Vision and

it’s for the school board? Does it have to be specified? How exactly

would that be required, I guess, from an auditing and accounting

perspective?

[4:15 p.m.]

Hon. S. Robinson: Given that we have different campaigns, and you might have an

elector organization that is engaged in two or three campaigns, they

need to specify where they want the contributions to go.

They also have a reporting requirement. When they do their

disclosure, there is a requirement to make note of what campaign funds

were used for which campaign, so all of that needs to be taken into

consideration.

T. Stone: A final question on this section, to put a fine point on it then.

If an individual was to walk into a campaign office for, let’s say,

Vision Vancouver and say, “I would like to donate,” I suppose there are

two ways that that individual could do that, both of which would require

the same reporting requirements.

Either it’s done manually, in which case it’s tracked and then

reported out, as per the requirements…. That individual would have to

specify that this $1,200 is for the school board elector organization

campaign or it’s for an individual candidate who’s running as the Green

candidate or the NPA candidate in this community. Or the individual,

presumably…. If the elector organization has a website and allows for

electronic fundraising, then it would be the elector organization,

presumably, that would have to provide for a clear separation of those

contributions — i.e., require the individual to select which campaign he

or she wants to contribute to or a specific candidate.

Could the minister just confirm that the reporting requirements

will — whether it’s done electronically or whether it’s done manually —

require that very clearly stated intention of the donor as to where he

or she wants his or her contribution to actually go?

Hon. S. Robinson: The principle here is that contributions are connected to

campaigns. In this particular instance, you can give up to $1,200 to

each campaign. School board is one campaign. Local government is another

campaign. How the EOs choose to track is really up to them, but there is

a requirement that they track those contributions separately.

Sections 7 to 9 inclusive approved.

section 10.

[4:20 p.m.]

T. Stone: I believe we canvassed this earlier, but I just wanted to make

absolutely certain that I’m clear.

Under this section, my understanding is that the

section prohibits

an organization or an individual, other than an eligible individual,

from making a campaign contribution and prohibits an organization or an

individual from making campaign contributions indirectly.

Again, much like we talked about on an earlier section, could the

minister confirm that the intent of this

section is to allow individual

candidates to contribute to their own campaigns — a photocopier or a

printer or whatever — but not to accept those kinds of in-kind

contributions from third parties.

Hon. S. Robinson: The member is correct that, in this case, for the

self-contribution, there’s a limit applied. So this is a

self-contribution that’s permissible.

Again, to confirm what was earlier canvassed, if you are using

your own vehicle or your own computer or your own television, all of

those things are permissible. You just can’t accept that from a

corporation, and if another person is going to give it to you, then that

is considered a contribution to the campaign.

Sections 10 to 13 inclusive approved.

section 14.

T. Stone: I haven’t done this before. I would like to move an amendment to

this particular section. I’ve got a copy of it here that I would be

pleased to provide to the minister for her to take a quick look at, if

we could do that.

SECTION 14 by adding the underlined text as

shown

30.01

(3) Subject to any applicable regulations, in relation

to the 2018 general local election, for each of 2017 and 2018, the

campaign contribution limit is $5,000 for a candidate who is not

endorsed by an elector organization in relation to an election

campaign of the candidate as long as a candidate is contributing to

their own campaign. ]

On the amendment.

T. Stone: I’m proud to move an amendment to Bill 15, an amendment to

section

14. This is, perhaps, the piece of this legislation that we in the

opposition have heard more about from municipal elected representatives

across the province, local elected officials from across British

Columbia, than anything else.

[4:25 p.m.]

I have heard from all kinds of mayors and councillors, as have my

colleagues, particularly from small-town British Columbia, from rural

B.C., where it is and always has been a very common practice for someone

running to be mayor or to be councillor or to be a school board

representative in a small town of 500 or 1,000….

I think of communities like Barriere and Chase in my riding, or

Valemount in the member for Prince George–Valemount’s riding, and

communities like that all across the province where an individual steps

up, decides to run for office locally. Because it’s such a small

community and because you can’t really spend much money in that

community anyway, the individual running opts to just self-finance their

campaign. In doing so, the individual often will incur more than $1,200

in expenses but not a tremendous amount more.

I was hearing amounts from most of the mayors and councillors that

had reached out to me — and certainly this is the case for a number of

my colleagues in the opposition. Many of these individuals spend in and

around the $5,000 mark in terms of expenses on their own campaigns. They

simply…. In most of these cases, these individuals in small rural

communities don’t want to have to suddenly go out and engage in a

fundraising campaign.

We’re not talking about multi-millionaires and the Donald Trumps

of the world. We’re talking about hard-working men and women who are

putting their names forward and don’t want to bother their neighbours

and their friends and family in the community, asking for $50 donations.

They just want to write a cheque to their own campaign — in some cases

for $1,200, for $1,500, $2,000, $5,000.

I heard from a number of individuals that would have preferred to

see the number at $10,000 as a maximum contribution for self-funded

campaigns. We have tried to offer an amendment here that we think is

reasonable and balanced based on all of the feedback that we’ve received

and with what the majority of folks who have provided the feedback have

indeed told us. The most common number seems to be $5,000.

What we’re proposing in this amendment here, which we think is

eminently reasonable and is really driven from a place of common sense,

would be to add an additional subsection (3) to

section 30.01 of the

bill. This would provide for a third category of individual

contribution, which would be a $5,000 maximum contribution that an

individual can make to his or her own campaign.

We’ve specifically stipulated in this amendment that that

contribution cannot be made to an elector organization and a candidate

cannot donate to their own campaign if they’re a member of an elector

organization or they’ve been endorsed by an elector

organization.

Again, having had the opportunity over the last week, personally,

as the Municipal Affairs critic for the official opposition…. I have

racked a number of kilometres on my vehicle in the last week. Part of

that was talking to mayors and councillors. I have heard loud and clear

from a lot of these folks that they would really appreciate some serious

consideration of lifting what they view as an unnecessarily low cap for

a self-funded campaign. Again, this is particularly prevalent in

small-town, rural British Columbia.

We offer this amendment as a solution to what we are hearing from

a number of these communities. It’s something that they see as highly

problematic.

Hon. S. Robinson: I appreciate the work that has gone into looking at this issue. I

think it’s really important to address the principle that’s guiding this

legislation, recognizing that part of the work…. This work has also been

to recognize that as a large province, with various different-sized

communities, trying to find a place that we can settle on that addresses

both large and small communities is certainly quite challenging —

recognizing that there are certainly some challenges in smaller

communities that you don’t see in larger communities, and in larger

communities, there are different kinds of challenges that you don’t see

in smaller communities.

[4:30 p.m.]

In our approach here, we wanted to be very sensitive to the fact

that we are not creating an advantage for candidates who have access to

a greater pocketbook than those who don’t have access to that same

pocketbook. Again, it’s about that level playing field. Trying to find

where that is, is certainly always a significant challenge.

I’ve heard from some folks who are expressing those concerns that

the member is hearing, but I’m also hearing from others who are excited

about the opportunity to participate. They really feel now like they can

participate, because they don’t have the funds to write a significant

cheque, and they feel like it’s going to be a much more level playing

field.

I appreciate the proposed amendment, but I’m not going to accept

it at this point.

A. Weaver: I have a number of questions germane to this amendment, which I’d

like to pose to the member who’s brought the amendment forward in order

for us to think about this. My question to the member is: where did the

number $5,000 come from, what extent of consultation was done, and who

was consulted to come up with the number $5,000 for this

here?

The Chair: Please comment.

T. Stone: Okay. Thank you, Chair, and thank you to the Leader of the Third

Party.

Much like the $1,200 number is an arbitrary number, to be straight

up with the member, the $5,000 number is an arbitrary number. We

received a lot of feedback in the official opposition from communities —

again, particularly those small rural communities around the province —

who just felt that the $1,200 was far too limiting within a small

community, where it has been the practice….

You talk to some of these mayors and councillors who have been

elected three, four, five, six times. Not once have they asked their

friends or neighbours or families to contribute to their campaigns.

They’ve funded their own campaigns. But not campaigns in the tens of

thousands of dollars — campaigns, in some cases, of $3,000, $5,000,

$7,000, $2,000. The majority that I heard from were certainly well below

$10,000.

If we think of a community like Chase or Barriere or Cumberland,

there are very limited opportunities to incur costs for advertising. You

might purchase a few signs. You might photocopy a few leaflets to put up

and hand out around town. You might provide some food for some

volunteers who might be knocking on doors with you. We’re talking fairly

limited expenditures here. In small communities, it has typically been

the practice to just self-finance your own campaign.

There is no magic to the $5,000 number. We just wanted to reflect

a number that was much more in sync with the feedback that we have been

receiving from communities across British Columbia. That is why we are

suggesting that $5,000 be the maximum contribution limit for

self-funded, for a candidate to contribute to their own campaign,

assuming that candidate has not been endorsed by an elector

organization.

The Chair: The member for Oak Bay–Gordon Head has further comment or a

question to the minister? A comment.

A. Weaver: Further comments and questions.

I very much appreciate the spirit of this, and to be honest, I

support it. What I would like to do is get some more sense of this

number.

The $1,200 was justified. It’s a similar number…. It’s the same

number, essentially, that you can donate provincially. I get where

$1,200 comes from. I’m wondering if the member is open to some variant

from $5,000 and just discuss this now. Why I said that is…. We had a

discussion within our caucus. I understood, when speaking with your

colleague, the member from just south of you, that something like this

would come in. I told him that I would support this, and I

do.

What I have some difficulty with is the actual number, because I

had thought it might have come down lower than this. So again, I’m

wondering if there are any jurisdictions that the member can point to

where $5,000 is used, or some multiple of provincial amounts are used,

to justify…. We know that provincially it’s a $1,200 limit. We know

we’ve done it civically — $1,200.

[4:35 p.m.]

What I’m saying is: are there any other best practices out there

where the amount an individual can contribute is some multiple of that

$1,200? Say, do we know what Quebec does? Do we know what Ontario does?

Do we know what Manitoba does?

In fact, I’m going to address this question to the minister, who’s

got the experts sitting beside her who can provide the information for

that. So I ask the minister this question.

Hon. S. Robinson: Thank you very much for that. Again, I do appreciate that there is

some expression of concern. One of the things that we will be looking

at, because I, too, have heard some of these concerns, is regulation.

And putting in some…. There will be some opportunity for us to take a

look at the self-financing component.

I do think it’s important to get on the record where things are at

in other jurisdictions around self-funding. In Quebec, where a $100

contribution is the maximum, candidates have an $800 self-financing max.

We all know that Quebec has some significant very tiny, tiny, tiny

little communities as well.

In Newfoundland, it’s $1,000. And that’s it. If you’re

self-funding, you’re under the same limit. In Manitoba, it’s $1,500.

There are no additional rules for self-funding.

There’s certainly some variation across the nation around this. I

think that there’s some recognition that making sure that there’s a

level playing field…. Again, I want to point out that it’s really

important that the principle that we’re working on here is that anyone

can put their name forward, that finances and access to big bank

accounts that you can self-finance doesn’t give certain privilege to

certain candidates and potentially disqualify other candidates. That’s

why we’ve put in this limit.

A. Weaver: A supplemental question to the minister, then. I recognize it’s

odd to ask this question about the bill in general, but can she point,

in the bill, where regulatory powers would exist to grant cabinet the

rights to bring in changes to financing for self-funded

campaigns?

The reason why I’d like to see that is that…. I believe this is an

important issue. It’s something I do support. I have questions, as I

mentioned, about the number, but I’m open to hearing about where the

regulatory powers are granted within the existing bill.

Hon. S. Robinson: Thank you very much for the question.

It’s in existing legislation that provides us with the opportunity

to do that. That is

section 100(4) of the Local Elections Campaign

Financing Act. It says, and I can read it into the record, “Where this

act contemplates that a provision of the act may be subject to

regulations, the authority to make the contemplative regulations

includes authority to do any or all of the following:

a) provide

exceptions to the provision;

b) establish limits on the application of

the provision.” and so on.

P. Milobar: I rise to speak to the amendment and just to maybe clarify a

couple of points too. I had talked with the member for Oak Bay–Gordon

Head last week around this. I apologize for the last-minute nature. With

the unknown nature of the estimates, it kind of got away from us here

today.

But, really, the question around $5,000 or not, part of that is

just based on past experience. I know in my own situation…. I’ve run

twice as a city councillor. Both times it cost around $3,000 to run a

proper campaign in the city of Kamloops.

When I ran for mayor, this $5,000 limit would not do, and you

would be expected to still have to go out and fundraise to run a

full-scale campaign for mayor in a city the size of Kamloops. So that’s

all right, in my opinion, that people in certain positions that would be

expected to fundraise in certain size cities anyways would still be

expected to go out there and do that.

The reality, though…. When we hear about a level playing field at

$1,200, I would point out that’s only a level playing field if

everyone’s capped at spending $1,200. And there’s no cap at the spend of

$1,200. So if I’m a better fundraiser than my competitors, I can still

spend more money.

[4:40 p.m.]

What the bill does by capping it at $1,200 is actually encourage

people to go out and start fundraising, who might otherwise not have

gone out and fundraised, to run a campaign of $3,000 or $4,000 in a city

the size of Salmon Arm or Kamloops — even some of the areas down in the

Lower Mainland in terms of the Maple Ridges of the world.

So $5,000 is really a number, in practice, that tries to capture

cities from the size of a Kamloops and a Kelowna, all the way down to

the small towns, without having to get into population limits and making

it a very confusing piece of the legislation.

It’s really around just giving that flexibility for people to run

a reasonable campaign, if they choose to, out of their own bank

accounts, not creating a situation where those people then need to

actually have to start fundraising, who previously had never gone out to

fundraise before. I think that’s what we’re trying to avoid — the volume

of fundraising that needs to be done for an election.

That’s really where I think the $5,000 and the want to still have

that ability for people to self-finance come in. It should actually

reduce the number of asks in the communities for people to go out and

fundraise. It’s a number that, frankly…. If the $1,200 doesn’t work,

finding that out after an election is really doing a disservice to the

communities for a four-year term, in terms of how their local election

may run — versus setting it at $5,000 and letting the election run its

course, seeing if there are still any huge problems with

this.

It’s always easier to keep ratcheting it down, if need be, into

the next election, as opposed to playing with the municipal democratic

elections by arbitrarily saying: “Now you can only spend $1,200, unless

you’re prepared to go out and start fundraising.”

That’s really, I think, the underlying key tenet to all of this.

We wanted to make sure that we captured the spirit and the intent of

electoral organizations and not make this as a workaround for people in

communities that have political parties within municipal government. We

fully agree with that and with that piece of the legislation that’s been

brought in.

This is really around allowing that flexibility in smaller

communities, not having people feel the need to have to go out and

fundraise. They still can if they so choose. They don’t have to put any

of their own money in if they can fundraise enough dollars from private

citizens to run a campaign. That flexibility is still there. What this

really does is address those small to mid-size communities, allows

people to run a reasonable level of campaign if they so

choose.

As I say, the level playing field is a great concept, but the

problem is: if you’re not very adept at fundraising, you’re still

playing against the game. There are a lot of people that are not great

at fundraising, but they’re very good at being a local government

representative. And this gives them that ability.

I know you can put away, apparently, $1,200 a year if you wanted

to self-finance over the four years, but there are a couple problems

with that. My understanding is that it’s very tough to try to open a

campaign account ahead of an election — any time in advance of any

significance. The banks very much shy away from that. So it would be

very hard to even open a bank account for your election.

Secondly, you would have to know four years ahead of time that you

were actually running in an election. Lots of people, myself included….

I decided on the last day of nominations the first time I ran for

council and filed my papers with 15 minutes to go. I would not have had

that opportunity to bank money ahead of time for a campaign.

Thirdly, if you suddenly decide that you’re not going to run, and

you have put away three or four years’ worth of money, you also aren’t

allowed to get your money back if it’s an election account. That goes

into trust with the city. It gets held by the city, and there’s a whole

process around that. But you cannot personally get funds that have been

held for election purposes back to your own self.

Interjections.

P. Milobar: Okay, sorry. I’m getting a note that says keep talking and another

one that says to cede the floor.

The Chair: Members, we have to interrupt the proceedings of this House so

that we can provide new instructions to Committee A. So we are going

to ask the minister to move progress, and then we’ll continue after

that.

Hon. M. Farnworth: I move the committee rise, report progress and ask leave to sit

again.

Motion approved.

The committee rose at 4:44 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of the Whole (Section B), having reported progress, was

granted leave to sit again.

[4:45 p.m.]

Hon. M. Farnworth: Given the speedy resolution of the estimates of Citizens’

Services, much sooner than anticipated, I call the estimates for the

Ministry of Tourism, and Bill 15 in this chamber.

Committee of the Whole House

BILL 15 — LOCAL ELECTIONS

CAMPAIGN

FINANCING

AMENDMENT ACT, 2017

(continued)

The House in Committee of the Whole (Section

B) on Bill 15; R.

Chouhan in the chair.

The committee met at 4:46 p.m.

On the amendment to

section 14 (continued) .

P. Milobar: As I was saying before the short recess there, really, the spirit

and the intent of this amendment is not meant to undermine the spirit

and the intent of the overall bill. It’s meant to augment it. It’s meant

to make sure that there’s a way to see elections still run without the

influence of big money, corporate money, without a workaround for

electoral organizations in larger centres that have those in

existence.

This is really about those communities, a large portion of which….

People run. They run with their own kind of pride at stake, and they

want to just run with their own dollars at stake too. A lot of times,

they’re feeling…. It may be their first time into politics. They’re a

little unsure about maybe taking family’s and friends’ contributions.

They feel like that would add even more pressure to them in terms of

their performance, especially if they’re not successful in an

election.

I took the opportunity over the week that we were away to go

through with Elections B.C. filings. They’re all right there on line for

previous municipal campaigns. When you go in and just randomly select

other cities, you start seeing that there are a lot of campaigns that

are in that $3,000 range for an expense. There’s a great many of them

that have no donations whatsoever.

That’s where that $3,000 to $5,000 starts to make sense. It does

allow people to reasonably market themselves to the public to try to

present to the public what they would bring to municipal council or to a

school district, without creating such a high bar that it’s impossible

to meet.

That’s why, when you hear things like a $10,000 suggestion, we

dismissed that as well. We are trying to find that sweet spot of making

sure that municipal elections, which already suffer from chronically low

voter turnout — chronically low…. In fact, we have ten times as many

candidates run for local government as you do for a provincial election,

yet you get half the voter turnout in an election.

I would suggest that limiting the ability for people to properly

get their message out and let people know that there’s an election even

going on at the civic level could actually impair that even further and

see an even lower voter turnout happening with municipal elections. So

that’s really the key to all of this. How do you balance both out? How

do you say to communities that, by and large, already aren’t getting

large corporate donations anyway…? Trying to ban something that doesn’t

already exist in those communities doesn’t make a lot of

sense.

The large corporate donations I can totally understand, as you run

for mayor. I saw corporate donations myself, running for mayor. That I

can understand, and that I can accept happening in a larger city. It

doesn’t have to be just Vancouver. It can be the size of a Kamloops or a

Kelowna that that happens in, or a Prince George. So that’s

understandable, and that’s supportable.

However, there are a great many campaigns that really do rely on

the ability to self-fund, to self-finance, to run their campaign, to try

to get a reasonable amount of signage out, to try to get some reasonable

advertising out there. To try to do it with a $1,200 limit is very

problematic.

We have already seen, and it was supported…. We now see a spending

limit already in place. Depending on the size of the city, we have

spending caps in place for municipal campaigns. I think that’s a very

good thing, as well, because that will help contain things

further.

[4:50 p.m.]

When you look at it on balance, if we’re restricting corporate

donations and we’re restricting what can be done with party

organizations and third-party advertisers and we’re restricting the

overall spend limit that you can have in a campaign…. I think that all

of those are very good things. The problem is, though, if you’re telling

people that you can only spend $1,200 of your own money, you have

created a situation where you have now told those people: “You need to

go out, and you need to fundraise.”

There’s another practical reality of running a municipal campaign

that I don’t think was thought through, in terms of this bill. That’s to

say, I’ve run in five municipal campaigns. Well, a lot of times, what

happens in a municipal campaign is you don’t have a finance person.

You’re your own finance person, as a candidate, as well. You’re trying

to set a budget. You think you’ve figured out what you want to do for a

campaign.

If you budget, say, $4,000 for your campaign, and you have a

$1,200 personal donation limit, what happens when the donations don’t

roll in but you’ve already committed to advertising for that campaign?

You’ve then put a lot of extra stress and nervousness on somebody who is

trying to do the right thing for their community, trying to run for

office in their community.

Now they’re standing there feeling like: “Okay, now what do I do?

I’ve committed to advertising. I’m technically in breach if I have to

self-finance the $4,000. I have to get very creative with my family on

how I get that $4,000 back to my account so I can pay the bills, because

I’m capped at $1,200.” If you budgeted for way over the $5,000, as

proposed in this amendment, well, at a certain point there’s a bit of

self-responsibility. You are running for elected office. You should

share some of that self-responsibility.

Unlike running for provincial office, where you have this whole

other group of people that are there to support you behind the scenes….

You have accountants and lawyers that are looking through the legal side

of things for you. You have accountants working, generally, as your

finance people, making sure you’re not in contravention of Elections

B.C. acts and everything else like that.

The vast majority of local campaigns…. Again, they’re right on the

disclosure form. You can see who they list as their financial agents.

It’s the candidates themselves. They don’t have big fundraising

machines. They do not have a mechanism of accounting behind them to

figure out how to make all of this work. They’re, generally speaking,

full-time employees. They’re trying to fit in campaigning as they can,

and they’re trying to do the right thing within the legislative

framework that they are dealing with.

To have an unrealistic cap of $1,200 gives them zero margin of

error if their fundraising goals are not met. We see that all the time

in Kamloops, where people start out…. They have the GoFundMe pages now,

and they have all sorts of ways to try to raise funds. They get met very

quickly with how hard it is to try to get even $20 donations from

people, especially when there’s no tax receipt attached to

it.

That’s really what we’re trying to do here. We’re not trying to

create this class of self-funded campaign for the super elite. We’re not

trying to create something that would be so unworkable as to make it

seem like you’re buying your seat on council. The reality is that if

you’re popular enough, as you’re getting your message out, to get

elected in a campaign, you probably would be able to

fundraise.

In fact, the more unknown candidate, who might have something to

offer and be able to get that message out over the time of an election

but wouldn’t be well known enough to be able to start soliciting

donations of any serious form, would actually be left behind in this

process, where the people that are well connected through the Rotary

clubs or other service clubs or those types of situations would have a

much easier time collecting donations — having that kind of mechanism,

almost a provincial party, municipal party system behind them but not

officially called a party. They’re officially an independent person

running.

As much as I applaud the attempt at a level playing field, I don’t

think we can ever get it to a 100 percent level. I think we can get it

close. I think we can get it to a place where we’re making sure that

corporate interests are not putting undue money into an election. I

think we can make sure that electoral organizations aren’t playing fast

and loose with the rules, working around and all of those scenarios. I

think we can get it where we have spending caps, depending on the size

of the population, so you can’t spend at will to try to get yourself

elected. We have all those in place.

The only glitch in all of this…. We’ve gone through 13 sections of

this bill, previous to this, with no amendments. So it’s not a case of

trying to change, fundamentally, everything to do with this

bill.

[4:55 p.m.]

It’s about trying to make sure that this bill really reflects what

actually happens on the ground in a municipal campaign. I can tell you,

I’ve talked with a great many…. I’m not that far removed from municipal

government, as many of the newly elected in this House are as well, and

there are a lot of my former colleagues that are nervous about the

$1,200 limit.

I don’t think they fully realized that that was going to be

included in this. When they heard a $1,200 contribution limit, I think

they were under the impression, and rightfully so, that it would be for

donations you’re receiving. Because they’ve always had an ability to

donate an unlimited number of dollars to their own campaign, that’s

where I think it took them by a bit of surprise.

I would much rather err on the side of caution on this, in terms

of making sure that we give maximum flexibility in a municipal campaign,

knowing that the result of that campaign will result in four years

around the council table for who gets elected. We have seen examples

over this last 3½ years — three years now of the four-year term — of

cities that have worked remarkably well together as councils, and we’ve

seen a few notable examples where it has not gone quite so well, and

people can’t wait for the four years to come to get a new council in

place.

That doesn’t get helped if you have an election process where you

have people that aren’t able to run proper campaigns, get their proper

messaging out and make sure that people understand what it is they bring

to the table and offer for their community, to be a champion for their

community with.

If you’re an unknown person in a community, you could have great

ideas. If you have a $1,200 personal spend as a candidate, and you don’t

have deep enough connections in the community to try to seek out

donations, your voice will go totally unheard in a municipal campaign.

If you have a slightly higher personal campaign limit, your voice can be

heard, and you could be the change-maker around your council table or

your school district table that makes all of the difference moving

forward in a city.

I was fortunate the first time I ran to get elected the first time

out of the gate, but that doesn’t happen all the time. In fact, I came

in eighth out of eight possible seats. Now, there was a large margin

between me and nine, but nonetheless, there was no other place for me to

go if I didn’t come in eighth.

Interjection.

P. Milobar: Well, in terms of the ranking.

Interjection.

P. Milobar: The second time around I came in fourth. I was able to convey to

the public on the first time I ran, with the bare minimum to get in,

that I had something to offer the community. The next time I ran, I came

in fourth. The next time I ran, I was the mayor.

That’s how we develop leadership within our communities. That’s

how we get people to come out and run. The gentleman that I replaced in

this seat here…. The first time he ran for city council in Kamloops, he

came in ninth. He didn’t get on. He had to run the next time and got

elected at the same time I did, and I think he came second in that

election. One term later, he was mayor. One term later, he was an MLA,

and we know the rest of that resumé.

That’s how people get elected and are able to start moving through

the system. I self-financed both of my first two campaigns — well,

myself and my family did. Under these new rules, it would be much more

problematic trying to make those numbers work, and it wasn’t a huge,

huge campaign. It was a few thousand dollars. It was around $3,000 or

$3,500, I believe. The second time was around the same as well, so there

are those pieces that are in place.

There’s also the power of incumbency. If you’ve run once and you

keep your signs, you already have an ingrained advantage in terms of the

spend on your next election. Yes, you have to account for a depreciated

value of the signs, but it’s not dollar for dollar. So you can start to

have some built-in advantages, where the incumbents, because of the name

recognition and other factors, start to have even more of an advantage

than the non-incumbents.

When you look at typical council turnovers, there’s usually, out

of a council of eight, two to three that come in — whether it be by open

seats or by defeating an incumbent. In my case, I actually defeated an

incumbent the first time I got elected, so there was one empty seat and

one incumbent that was replaced. That’s not unusual. In the next

election, I think we had two incumbents that got defeated.

[5:00 p.m.]

The only way that new people are able to reasonably mount a

campaign to try to challenge an incumbent in local government is to try

to be able to get their message out. If we’re saying to them: “You can

go ahead and get your message out….” But this isn’t a bill designed to

limit fundraising in municipal elections. I see this as a bill trying to

limit corporate influence of the party structure in municipal elections.

Otherwise, what we’re really saying to people is that unless you’re

prepared to run a $1,200 self-financed campaign, you better go out and

start fundraising.

This bill, the way it stands, unless this amendment goes through,

is actually encouraging people to go out and start to fundraise. It’s

telling them that they need to go out and talk to their friends, talk to

their neighbours and try to figure out how t