2011 Legislative Session: Fourth Session, 39th Parliament

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly


Tuesday, February 21, 2012

Afternoon Sitting

Volume 29, Number 9

ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)


Routine Business

Statements (Standing Order 25B)


Dave Chitty and environmental education in Alberni Valley

S. Fraser

Emergency responders at Vernon recreation centre

E. Foster

Resident Awareness Day

M. Farnworth

Paws for Hope Animal Foundation

J. Thornthwaite


D. Routley

B.C. Lions and Grey Cup tour

D. Barnett

Oral Questions


Forest management and status of forest lands

N. Macdonald

Hon. S. Thomson

Forest industry jobs and log export policy

C. Trevena

Hon. S. Thomson

B. Routley

Forest practices and ranching industry water issues

L. Popham

Hon. C. Clark

Silviculture contractors and conditions for workers

R. Chouhan

Hon. M. MacDiarmid

Delays in court proceedings in Chilliwack

L. Krog

Hon. C. Clark

Orders of the Day

Presentation of Estimates


Budget Debate


Hon. K. Falcon

B. Ralston

Introduction and First Reading of Bills


Bill 21 — Budget Measures Implementation Act, 2012

Hon. K. Falcon

Tabling Documents


Budget and Fiscal Plan 2012/13-2014/15

[ Page 9323 ]


The House met at 1:40 p.m.

[Mr. Speaker in the chair.]

Routine Business

Mr. Speaker: Hon. Members, considering the amount of guests that we have here today, if we allowed introduction of guests, we might be here for some time, and the Minister of Finance might not get to deliver his speech today. So on behalf of all the members, I want to welcome you here today. And all those special guests that are sitting on the floor: welcome.

(Standing Order 25B)


S. Fraser: I rise today to honour the amazing work of one of my constituents in the Alberni Valley. A couple of years ago David Chitty retired as an educational coordinator for school district 70 in Port Alberni, but his legacy continues. In the mid-1980s, Dave became an educational coordinator, feeling strongly that school programs were a vital part of environmental stewardship. He was so right.

We are talking salmon here, hon. Speaker, a topic that I know is near and dear to you also. Dave involves students in enhancement projects in the Alberni Valley. Hundreds of elementary students have experienced everything from opening salmon smolt traps to riparian planning to riparian enhancement. When I first got elected as MLA, Dave Chitty helped educate me about the important role that we can all play to ensure our rivers and streams remain healthy.

Dave says his first involvement with salmon enhancement was back in the '70s. "We raised salmon in garbage cans. Primitive but fun," is the way Dave described it. In 1992 and 1993 things were a bit different. Those were the years when Japanese students studying salmon came to Port Alberni, and 20 students from Port Alberni got to go to Japan. Dave Chitty has helped educate a generation that spans the globe.

He blended his work as coordinator with his own volunteer work at local fish hatcheries. Dave should be so proud of his holistic approach, an approach that some of the program's many supporters have adopted also. He has helped to bring a deep and intimate understanding of the importance of our environment, of our fish, to so many people young and old.

For the salmon, for the kids, for the environment, for the future — Dave Chitty, for all of that, I salute you.


E. Foster: It's a pleasure today to rise and recognize heroes. The word "hero" sometimes gets used too much, but I think the ultimate definition of the word is someone who saves a life.

In January three employees of the Vernon recreation centre did just that. On January 24 a 36-year-old woman was running on a treadmill at the rec centre above the pool, waving down at her brother and nephew swimming below. The next minute, she recalled seeing a snowy, blurred vision and then complete blackness, falling to her side off the treadmill. Her heart had stopped. She was, for all intents and purposes, dead.

Lifeguard Gary Lefebvre quickly rushed to her side and began CPR. Less than two minutes later, Norlene Keller arrived with an automated external defibrillator and restarted the woman's heart. A third lifeguard, Laura Hitchen, arrived shortly after to help and monitor her breathing.

They responded calmly and efficiently and professionally, and they saved the life of a wife and mother of three. She was quickly admitted to the Vernon Jubilee Hospital before being flown to Victoria's Royal Jubilee. Her family, needless to say, is incredibly grateful for the quick work of these three people.

One could not ask for a better example of pure heroism and inspiring individuals. One could not ask for a better example of the importance of CPR training. I'm proud to have the opportunity to thank and recognize Gary Lefebvre, Norlene Keller and Laura Hitchen. Because of them, a wife and mother is still with her family. I hope my fellow members will join me in thanking them.


M. Farnworth: Today is a very important day, and I'm not talking about the budget. I'm talking about a national celebration of Resident Awareness Day. Today is Resident Awareness Day. It's a national celebration designed to spread awareness of the very important and necessary work of resident physicians: medical professionals who are a vital part of our health care system and its future. Resident Awareness Day is a national celebration supported by the Professional Association of Residents of British Columbia.

[1345] Jump to this time in the webcast

Residency is a stage of graduate medical training. Medical school teaches physicians a broad range of medical knowledge, basic clinical skills and limited experience, though, in practising medicine. Medical residency gives in-depth training within a specific branch of medicine. Residents have graduated from an accredited medical school and hold a medical degree.

This is not something that's new. Residency has been
[ Page 9324 ]
around for a long time, but it has evolved over the years. It started as a brief, limited opportunity in the late 19th century — as an opportunity to advance training in less formal programs and provide more training in areas of special interest.

It became formalized and institutionalized for principal specialties in the early 20th century, but even by mid-century residency was not seen as necessary for general practice, unlike today, and only a minority of primary care physicians participated.

However, by the end of the 20th century in North America very few doctors went directly from medical school into independent, unsupervised medical practice, and more and more provincial governments began requiring one or more years of post-graduate medical training for a licence.

In Canada residency training leads to eligibility for certification by, and fellowship of, the Royal College of Physicians and Surgeons of Canada or the College of Family Physicians of Canada.

Recently the British Columbia Medical Association has called for more residency positions. The reason is because they are part of the future of medicare. Celebrate Resident Awareness Day in British Columbia.


J. Thornthwaite: The Paws for Hope Animal Foundation is a non-profit society based in Vancouver that was established last year. Their vision is for a society that treats all animals with respect and compassion. Their mission is to improve the overall welfare of animals through education and awareness campaigns, community programming and support, rescue and rehabilitation.

Kathy Powelson is the founder and the executive director of the Paws for Hope Animal Foundation. With her strong background in community and organizational development, Kathy leads an incredible team of volunteers who have come together with a common purpose and an unwavering commitment to helping animals in need.

One of the organization's biggest projects is Roxy's Fund, which was established to help people who are homeless who keep animals for companionship. Pets on the street are no different from the ones we have in our homes; they need food, proper care and love just as much.

The Paws for Hope Foundation is partnering this month with agencies who serve the homeless and street-involved populations such as Watari, RainCity Housing and Directions Youth Services. Working hand in hand with other concerned groups, they collect donations of pet food and warm jackets for animals that are on the streets.

I encourage all British Columbians to find out more about this amazing non-profit organization at pawsforhope.org, and how to get involved in helping to improve the lives and well-being of animals in our province.


D. Routley: I'd like to share with the members the story of COCO Cafe, operated by the Cedar Opportunities Cooperative. Its vision is full inclusion of people with developmental disabilities in all aspects of community life in the Cedar, Yellow Point and Cassidy area.

They enhance quality of life through meaningful work, skill-building, economic growth and social connection. COCO insists upon inclusion, respect for all and fosters experiences that build positive self-esteem and a sense of belonging. They strive to create long-lasting relationships among members, customers and neighbours. They believe that fair trade, fair work and fair business practices are the building blocks of a self-sustaining business and community.

COCO was founded by a group of five families from the community, all of whom have a family member with a developmental disability, whether it's Sarah or Rachel at the till, or Dustin going home with his mom, saying how much he loves working at COCO, the café is succeeding in elevating the lives of our community and its most vulnerable members.

As a rural community, children with developmental disabilities receive services in school and can ride school buses to those services. However, once students graduate or age out of the public school system, families are faced with a loss of service, the need to move or the demand to drive to programs or services in larger communities. These families started COCO in order to meet these challenges and provide opportunities to their children.

The café is supported through a grant from co-op development initiative, the Vancouver Foundation for training and salaries of support worker, The Co-operators to partially fund the salary of a manager and a grant from Mid-Island Co-op for start-up costs.

[1350] Jump to this time in the webcast

COCO Cafe also depends on the co-op memberships it has, volunteers and amazing support from our community. Emanuel Homes built the café voluntarily. Slegg Lumber, Rolmar Manufacturing, Cloverdale Paint, Friesen Hardware, Aztec Appliances, Kleinholz Painting, local coffee shops, Cedar Lions and Island Savings, among too many others to list here, also provided products and services to the startup of COCO Cafe. COCO Cafe offers coffee and light meals to consumers.

I love the COCO Cafe, and I recommend it to anyone visiting Cedar — especially the cinnamon buns.


D. Barnett: After their big win against the Winnipeg Blue Bombers last November in Vancouver, the B.C. Lions shared their victory with the entire province. In the 99-year history of the Grey Cup this was only the fourth time that the home team won the cup. Our B.C. Lions
[ Page 9325 ]
have actually claimed this success not once but twice. So British Columbia football fans had a lot to celebrate and be proud of, which made this month's Grey Cup tour that much more exciting.

I had the privilege to have the cup come to communities in my riding — first, Peter Skene Ogden in 100 Mile House. The school's leadership class, under the guidance of their teachers, organized a welcome for the cup and B.C. Lions stars J.R. LaRose, Angus Reid and Geroy Simon. From there to Williams Lake, where the city staff at the Cariboo Memorial Complex organized the enthusiastic welcome…. From orange, black and white pompoms to shirts, hats and memorabilia from the '60s, the excitement was in the air, with crowds to full capacity.

What a great inspiration this event brought to my communities and to B.C. Angus Reid said it all when he said: "Follow your dreams, and be the best you can be."

Oral Questions


N. Macdonald: Yesterday the Association of B.C. Forest Professionals issued a follow-up on their 2006 assessment of the status of forest inventories. Their concerns about a lack of accurate forest inventory echo what we heard last week from the Auditor General in his condemnation of B.C. Liberal forest policies.

A lack of investment in inventories since B.C. Liberals took over means a predictable lack of information. We do not know what is happening on the land, and 74 percent of the information is outdated. What the Auditor General said is that without accurate data the government cannot know what it is doing, whether it is effective or not. Forest professionals, the Forest Practices Board and the Auditor General all say that action is needed.

To the minister responsible: what steps is he taking so that this ministry finally has some clue about what is happening on the land base that he is responsible for?

Hon. S. Thomson: As we said last week in response to the Auditor General's report and we'll say in response to this report from the professional foresters, firstly, we acknowledge their input. One of the points the professional foresters made is that our forest inventory analysis branch is doing an admirable job of providing the information that we need to make the inventory decisions and to look at the plans, going forward, for inventory and reforestation.

Again, to make it clear: $6.1 million in inventory work, $236 million in the Forests for Tomorrow program in reforestation in this province. We will continue to work, to do the analysis, to do the inventory. That work is underway, and we'll make sure that we meet the obligations under the forest legislation that we are responsible for.

Mr. Speaker: The member has a supplemental.

[1355] Jump to this time in the webcast

N. Macdonald: Let's be clear. The figure that the minister used is the $6 million. That is less than half of what B.C. forest professionals say is bare minimum for inventory, and it is year after year that this has happened. So what the minister is doing is what B.C. Liberals do every single time there is a report that condemns what they have done. It is clear that the policy they have is to deny, deny, deny.

The Forest Practices Board said in November: "We do not have confidence that the Forests Ministry can adequately describe the current conditions of the managed forests or track changes in its conditions into the future." So that is the state that we are talking about.

The Forest Practices Board says the Liberals are failing. The forest professionals say the Liberals are failing. The Auditor General says the Liberals are failing. The only people deluded enough to think that their policies are successful are those that sit on the government benches across the aisle. That's all.

How can the minister stand with a straight face and say that he's taking action when everyone who understands the issue knows that the Liberals have put before us a complete and utter failure as part of their forestry policy?


N. Macdonald: Well, the minister should have been….


Mr. Speaker: Members.


Hon. S. Thomson: I'm not sure I heard a question there. I think I heard a statement. But it's just another example of the members on the opposite simply saying: "Just put more money towards it; just throw more money at it." That's the approach they've taken in many more other areas.

What we're saying on this side of the House is that we're doing the inventory work. We're making sure that the money that we're spending, both in the inventory work and in the reforestation work, is targeted on the high-priority areas to make sure that we can meet the obligations, to make sure that we can assist in doing the annual allowable cut determinations and to make sure that we can address the issues around midterm timber supply, going forward, in the industry.

Mr. Speaker: The member has a further supplemental.

N. Macdonald: The minister would have done well to listen to the question rather than taking notes from the….
[ Page 9326 ]


N. Macdonald: What we are….


Mr. Speaker: Member, just sit down. Just take your seat for a second, Member.

Continue, Member.

N. Macdonald: What a ridiculous assertion that the minister made. It's the Auditor General who reminded this government that this is our most valuable asset. It's worth one-third of a trillion dollars. What the Auditor General is saying — it's not me who's asserting it; it's the Auditor General and every other professional body — is that that most valuable asset is being squandered by this government.

The minister can do all he wants to deny the truth, but the fact is that he throws around numbers that…. Even if he managed with the numbers that he is talking about, even if he did the work that he said he was doing on the land base, it would take 100 years to get up to this place. It would take 100 years to get the work done that needs to be done.

Why are the B.C. Liberals, in their response to what is a clear indictment, choosing to do absolutely nothing?

Hon. S. Thomson: Just to be clear, the assertion that we are doing nothing is completely wrong. What we are doing is investing in inventory work — as I said, $6.1 million. We're investing in reforestation through the Forests for Tomorrow program. We're planting over 200 million trees year after year in the program. We're continuing to do the inventory work to make sure that the money we invest in the program, and in those programs, is targeted at the high-priority areas and continues to provide the long-term timber supply for the future.


C. Trevena: To the Forests Minister: what he is citing has been spoken about by independent professionals is absolutely inadequate. Last year 5½ million cubic metres of raw logs were shipped offshore to be processed; 15 years ago it was less than a million.

[1400] Jump to this time in the webcast

A cubic metre is the length of a telephone pole, so picture this: 5½ million telephone poles laid end to end would circle the globe 1½ times. That's what left our province last year alone.

This minister has displayed the government's gross mismanagement of our major resource and the foundation of our economy. I'd like to know. What is the minister's plan to get those logs used for jobs in B.C.?

Hon. S. Thomson: It's very interesting. This question is coming from the members opposite whose positions previously have been to ban log exports in British Columbia. Now they've got a more ambiguous position that talks about significant restrictions on exports — restrictions that would cost British Columbia jobs, put jobs at risk.

What happens now is the policy allows that logs that are for export are also harvested along with logs that are bound for domestic mills. There's a surplus test in place. It's less than 10 percent of the total harvest in British Columbia. The log exports are creating jobs in British Columbia.

The policy being advocated by the members opposite is a policy that would risk jobs and cause unemployment. It would reduce economic activity in communities across the province.

Mr. Speaker: The member has a supplemental.

C. Trevena: Mr. Speaker, 75,000 jobs have gone. This minister has absolutely no understanding of what 5½ million cubic metres of wood leaving our province in one year really means. It means desolate industrial ghost sites like Elk Falls in my community. And 32 other mills in communities on the Island and the coast have shut down. It means repeated mill shutdowns. Dick Jones, the president of Teal-Jones, said they are always short of logs. When you go to mill after mill — those that are still open — you'll hear the same thing.

The B.C. Liberals say that they've got some sort of a jobs plan, but where is the Minister of Forests' plan to keep jobs in B.C. using our resources and our logs?

Hon. S. Thomson: Maybe I'll remind the member opposite of some of the numbers and the results of the policy. Harvest levels are up in British Columbia. Forest product exports up: $9.95 billion, up from $9.1 billion. Lumber exports to China, 7.3 million cubic metres. That's lumber exports to China, 7.3 million cubic metres — over $1 billion in sales, 18 mills producing lumber destined for China and the Asia-Pacific markets, over two dozen mills opened or reopened as a result of the diversifications of market.


Hon. S. Thomson: That's what the policy does. As I said, the surplus test is there. This is enabling and protecting jobs in British Columbia.

B. Routley: B.C. mills have closed and reduced shifts for the want of logs as B.C. log exports have increased to 5.5 million cubic metres of logs off to foreign mills. Make no mistake. Too many raw log exports kill jobs. They kill jobs by eliminating manufacturing. They kill jobs by re-
[ Page 9327 ]
ducing the value of the forest products that we export. They kill jobs by reducing the revenue we receive for our own resources. Why has the minister not taken action for B.C. communities and for value-added B.C. jobs?

[1405] Jump to this time in the webcast

Hon. S. Thomson: Again, to reiterate. Lumber exports are at $9.95 billion, up from $9.1 billion in 2010. It's 7.3 million cubic metres of lumber, the equivalent of 18 mills — 9,000 jobs — producing for that market. That is resulting in investment in our industry.

Western Forest Products: $200 million in investment in mill capacity on Vancouver Island. We were with them when they announced that $16 million of the first $40 million is going to be spent at the Saltair mill.

It's very interesting, Mr. Speaker. Darrel Wong, president of the United Steelworkers and representing approximately 120 workers at the Saltair mill, said that this gives him the most hope for the long-suffering industry that he has felt for years. That's what the policy is doing — allowing investment in the industry.

Mr. Speaker: The member has a supplemental.

B. Routley: When B.C. forest workers lose jobs, everyone else in the community is hit as well. Last week Hans De Visser, president of Coastland Wood mill in Nanaimo, said that he would put on another shift if he could get the fibre. But the logs are rolling right past the mill to be loaded on a ship. "We don't want any special favour," Hans said to local media. "We're willing to compete for logs in an open market. But let's just have some opportunity to keep some logs behind in B.C."

When will this minister finally listen to B.C. mill operators so that B.C. logs can support B.C. jobs?

Hon. S. Thomson: When we see companies like Western Forest Products investing in mill capacity in British Columbia and making those investments that are protecting jobs here in British Columbia — 120 jobs at that mill, $40 million out of a $200 million investment in the industry and the coastal industry on Vancouver Island — that shows the economic policy of having log exports balanced with logs that are destined for the domestic mills. We have a surplus test in place in order to ensure that logs are available for domestic mills. There's a TEAC committee that oversees and administers that. Where the logs are needed for domestic mills, those are made available.


L. Popham: This government's mismanagement of forestry is impacting other industries. In the Twinflower Creek watershed that surrounds a Big Creek ranch, the Forest Practices Board recommended that a hydrological assessment be done before any further logging begins. Yet the Liberals are ignoring these recommendations, and logging is about to start up again.

To the Minister of Forests and Lands, will he stop mismanaging our resources and commit to conducting a proper hydrological study of this area before more logging begins?

Hon. C. Clark: Mr. Speaker, we have all sat here for about 15 minutes and listened to the members opposite get up again and again and say that they want to see the plan. They want to know where the government is going. They want to know why government isn't spending more money.

I think it's important that we ask the opposition some questions today. I think it's important that we find out exactly where it is that they have their plan.


Mr. Speaker: It's your time, Members.

Continue, Premier.

[1410] Jump to this time in the webcast

Hon. C. Clark: I am delighted that after a year in office I can still elicit such excitement from the members opposite.

Here's the thing. The NDP are promising $6½ billion in new spending. They say that they've produced a budget in anticipation of a possible fall election. But they are hiding that budget from British Columbians. They won't produce that budget, even though they have it somewhere, hidden in the Leader of the Opposition's office, perhaps. Perhaps it's in a filing cabinet, waiting to be pulled out at just the right moment now that he's got it cooked up.

I want to find out from the members opposite…. We want to see that plan, because you know what? They're going to see our plan in about ten minutes. And you can't have a debate about a budget in British Columbia when only one side of the House will come clean.

Mr. Speaker: The member has a supplemental.

L. Popham: So the Forests Minister decided to dodge responsibility for my question. The Premier decided to showboat in the House because she's got an audience. Let's hope that the Minister of Agriculture has an answer for B.C. ranchers and farmers.

For more than a century a creek ran through the lands of Big Creek ranch, until last year when the creek ran dry. Now the rancher is forced to truck in 1,500 gallons of water a day for his 150 head of cattle. It's not hard to see that the water needs of farmers and ranchers come last with the B.C. Liberals.
[ Page 9328 ]

Will the Minister of Agriculture stand up for ranchers in B.C. and comply with the Forest Practices Board recommendation to bring a dispute resolution mechanism in place so that ranchers have somewhere to turn when this government abandons them yet again?

Hon. C. Clark: I think it's fair to say we know what ranchers and farmers want in British Columbia. They want to know that they will have a government that will control spending, as opposed to one that will raise taxes. They want a government that will tell them what they intend to do with their money, as opposed to hiding their agenda from the public. They want a government that is going to make sure that we are managing tax dollars prudently. They want to know they have a responsible government, one that's looking after their tax dollars. They want to know it's one that's not taking risks with their money and hiding their agenda from the public.

Ranchers, farmers, small business people, people all across this province, people who are concerned about jobs, people who want to put food on the table for their kids — they want to know that in tough economic times they have a government that's going to look after their money well. If there is something, very clearly, that will be made very clear today in the budget that's coming up, it's what differentiates this side of the House from that. It's that rather than thinking we can grow the economy by raising and spending taxes, we believe the way you grow the economy is by lowering taxes.


R. Chouhan: The Liberal mismanagement of forestry in B.C. extends to the very workers in the silviculture industry. B.C. Timber Sales hands off contracts to the lowest bidder with little regard for worker safety and employment standards. Khaira Enterprises, known for their poor employment standards record, operated several silviculture camps in B.C., including one near Golden where workers lived in squalid conditions. After an investigation into these conditions and the death of one of their tree planters, the company was fined and declared bankruptcy, leaving workers unpaid for the last 15 months.

To the minister responsible: why did your government grant Khaira a contract, knowing their past?

[1415] Jump to this time in the webcast

Hon. M. MacDiarmid: Certainly, all of us on both sides of the House deeply regret what happened here. My heart definitely goes out to the employees of Khaira Enterprises, and we don't want to see anything like this happen again in British Columbia. The workers were subjected to obviously unacceptable conditions.

Action has been taken. There were a number of recommendations made by the forest safety ombudsman, and there are a number of actions that were taken over this matter. I'm pleased to say that approximately $125,000 has been disbursed amongst these workers, and another amount of money is being held in trust.

Mr. Speaker: The member has a supplemental.

R. Chouhan: It's good to hear that the minister's heart is going to the workers, but the reality is those workers have not received that money — a recommendation maybe. So the Liberal mismanagement of employment standards has resulted in a lack of rules and regulations to ensure that workers are properly protected and paid what they are owed.

Workers in camps like Khaira now face increased vulnerability because of limited employment standards. In other jurisdictions forestry contractors are required to pay 10 percent of the total contract in a bond to protect workers from situations where a company is unable or unwilling to pay.

To the Minister of Labour: why hasn't the government been proactive in enforcing employment standard requirements, and what steps are being taken to help these employees so that they can be compensated in the future?

Hon. M. MacDiarmid: Certainly, again, the conditions that these workers were subjected to were unacceptable. I would like to point out to the member opposite, though, that we have very high employment standards in this province. We believe in them, I'm sure, on both sides of the House. There is a strong act, and it is enforced in this province.

With respect to this particular company, unfortunately, the company is out of business, and there are not any known assets further that can be used in order to compensate these workers. But money has gone to these workers; $125,000 has been disbursed. The matter was pursued to the utmost.


L. Krog: While growing backlogs in B.C. courtrooms continue to keep families apart and allow criminals to walk free, nowhere are delays worse than in Chilliwack. Chilliwack currently has the longest delays in B.C. for child protection hearings, family trials and adult criminal two-day trials. On average there is a 16-month delay to find the next available court date in Chilliwack. Yet the Liberals' own candidate in Chilliwack-Hope is downplaying the seriousness of the situation, saying: "We don't want to overblow the problem."

The Premier is the leader of the B.C. Liberal Party. Does she agree with her candidate's comments? Are 109 judicial stays due to trial delays overblown?
[ Page 9329 ]

Hon. C. Clark: I will say this, and I've said this a number of times in the House. The situation is as follows — and the member understands this, I think: we are at a 30-year low for crime rates in British Columbia. The number of cases that are going to court is also down substantially. The length of time it takes to hear a case has stayed absolutely stable or close to stable in British Columbia, and yet we are seeing an increase in delays and stays.

There is something in this that doesn't add up. Now, nonetheless, we have done this: we have added nine new judges very recently. We are doubling prison capacity in the Interior. We are hiring new sheriffs, and we're making sure police have the resources that they need to do their jobs. But there is more that needs to be understood about the problem here.

When we have one of the most expensive per-capita court systems in Canada, when we have a crime rate that's going down and delays that are going up, and we are putting more money into the system, clearly it takes more than just the typical NDP answer. The NDP would say: "Well, just throw more money at it." I don't think that is going to be enough in this case. Clearly, it hasn't been. We need to discover the depth of the problem, and then we can do more than put a band-aid on it.

[1420] Jump to this time in the webcast

Mr. Speaker: The member has a supplemental.

L. Krog: Well, I can tell you what doesn't add up: when you've been in power for 11 years, acknowledge an enormous problem and aren't doing anything about it. So 109 stays last year; 2,500 cases on the verge of being stayed; and another 5,000 cases, as of five months ago, that were between 12 and 18 months old.

While the Liberals' own candidate may be out downplaying the problem, Chilliwack took top spot for court delays. The community expects better than that. They expect justice issues to be taken seriously by this government. I remind, once again, that this government has been in power for 11 years.

My question to the Premier is very simple. When will the government start taking this issue seriously in Chilliwack and communities across this province and ensure that the next wave of 5,000 cases won't be tossed?

Hon. C. Clark: I think I answered the substance of the question just a moment ago, but I'll add this to it as well. I think it was a former NDP Premier who came out recently and said: "Gee, this is a problem that's existed for quite a long time." It was a former NDP Premier who came out recently and said: "You know, the government's position on this actually seems to make some sense." It was a former NDP Premier that came out and said something exactly the opposite of the current NDP, but we're used to that. We're used to that on this side of the House. On that side of the House, though….


Mr. Speaker: Members.

Hon. C. Clark: Here's what we want to know….


Mr. Speaker: Stop for a second.


Continue, Premier.

Hon. C. Clark: On this side of the House we are curious about how the member, in his apparent desire to throw money at the problem without trying to understand it first, intends to get the money. On the other side of the House we are led to believe, for example, that they support a $2 billion raise for teachers, that they support the $1.36 billion that would be incurred as a result of that decision to go toward collective agreements that have already been settled.

This is what we're led to believe, but they won't come clean on any of these issues. They won't tell us where they stand on things like zero-zero. They won't tell us where they stand on getting money for the court system. I believe we need to have a debate on these issues, and I look forward to the members opposite finally coming clean on their agenda.

[End of question period.]

Orders of the Day

Hon. K. Falcon: Mr. Speaker, I move that this House at its next sitting resolve itself for this session into a committee to consider the supply to be granted to Her Majesty.

Motion approved.

Presentation of Estimates


Hon. K. Falcon presented a message from His Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 2013, and a supplement to the estimates for the fiscal year ending March 31, 2013, recommending the same to the Legislative Assembly.

Hon. K. Falcon moved that the said message and the estimates accompanying the same be referred to the Committee of Supply.
[ Page 9330 ]

Motion approved.

Hon. K. Falcon: Mr. Speaker, I move, seconded by the Premier of British Columbia, that the Speaker do now leave the chair for the House to go into Committee of Supply.

Budget Debate

Hon. K. Falcon: Hon. Speaker, I'm pleased to introduce Budget 2012, a budget that responds to a new paradigm for governments in the world today. It is built on fiscal discipline, and it lays a firm foundation for the future we all want in British Columbia.

[1425] Jump to this time in the webcast

First and foremost, it sets out a plan to eliminate the deficit as required by our balanced-budget legislation. This is especially important now, when around the world the landscape is littered with governments that have forgotten the importance of managing spending and taxation prudently. Now they find themselves in very dire situations. No one is immune to what's happening in the world today.

We've entered a period of slower economic growth affecting governments and citizens everywhere. Investors are nervous. Consumers are cautious, and rightly so. They're concerned about their futures, and now more than ever they're concerned about rising debt — not just their own but government's debt.

The days of markets tolerating government overspending are finished. That's the new paradigm. That's the new reality. And that is the context in which we prepared this three-year budget and fiscal plan.

Some people may not agree with our decisions. Some will say we should disregard the bigger picture, pay no attention to the turmoil around us and simply spend more, tax more and pass the bill to the next generation. But British Columbians can see for themselves that that is the wrong direction.

Look at what's happening today in Europe. Look at what's happening south of the border. Look at our own experience here in British Columbia in the 1990s. The lesson is clear. The tax-spend-and-borrow approach is not just wrong; it is potentially catastrophic. And now with so many economies struggling, those of us who exercise fiscal discipline, not just in words but in actions, have a clear, competitive advantage in today's uncertain global economy.

Our record of fiscal discipline gives us an edge in attracting investment. It gives us an edge in protecting and creating jobs. It gives us an edge in generating revenues that we can then invest in important public services. It instils confidence and reinforces the growing awareness of British Columbia and Canada as a safe harbour for investment and investors.

So fiscal discipline is at the very core of Budget 2012. It puts us on the right path to eliminate the deficit, protect public services and build a more competitive economy.

Like almost every economy around the world, ours was affected by the economic meltdown that started in late 2008. The collapse of Lehman Brothers triggered an international financial crisis, driven in large part by the U.S. sub-prime mortgage mess. In 2009, after delivering five consecutive balanced budgets, we experienced a dramatic decline in revenues.

Rather than significantly increase taxes or reduce spending on priority programs like health and education, we incurred a temporary deficit, and that was the right decision at the time. We worked closely with the federal government to stimulate economic activity through the largest-ever capital program in B.C. history because we were facing an unprecedented worldwide crisis.

The worst of that crisis appears to be behind us, but we remain at risk from the impacts of global economic uncertainty. With this budget we are projecting very modest economic growth of 1.8 percent in 2012, 2.2 percent the following year and 2.5 percent in 2014.

These estimates are lower than the average of private sector forecasts, consistent with our always prudent approach, but they tell the same story. The B.C. economy is slowly, steadily picking up steam. With that growth, we expect our revenues to increase, but that alone will not be enough to bring our budget into balance.

As you know, our second quarterly report projected a deficit of $3.1 billion, dramatically increased by our legal obligation to repay $1.6 billion in federal HST transition funding as a result of the HST referendum. Under generally accepted accounting principles, we are required to book the full amount in the current fiscal year, as we have done.

Faced with that kind of major, one-time hit to their bottom line, some governments might choose to keep on running deficits. But as I've said, this budget is about fiscal discipline. We made a commitment to the people of British Columbia to return to balanced budgets by '13-14, and today I can reiterate that we will honour that commitment.

[1430] Jump to this time in the webcast

We will do it in part by continuing to hold the line on spending. It will increase by just 2 percent per year over the term of our three-year fiscal plan.

We're able to achieve this, in part, by maintaining our disciplined approach to public sector wages, which account for over 50 percent of government spending. Although we are still negotiating settlements on the 2010 wage mandate, most public sector unions have now completed two years of net zero compensation increases. Had we negotiated wage increases of 2 percent per year instead of that net zero, we would be facing nearly $3 billion of additional debt in this fiscal plan, and there is no way we would be balancing the budget in 2013-14.

The unions that have accepted net zero deserve full
[ Page 9331 ]
credit for accepting the challenge of helping the province to keep spending in check.

We are now moving to the 2012 round of bargaining under what we're calling the cooperative gains mandate. It allows public sector employers to negotiate modest compensation increases if they can find equivalent savings within existing budgets. That could mean efficiencies or productivity improvements. It will not mean off-loading costs onto the public.

Let me be perfectly clear. We are not prepared to borrow money to pay for a public sector wage increase today and send the bill to our children tomorrow.

Spending is, of course, only part of the equation. We're also taking action on the revenue side. As I indicated previously in a speech to the Vancouver Board of Trade, we are preparing to sell some surplus assets that sit on government's books costing money with no return to taxpayers. Our goal is to take those surplus assets and turn them into economic generators across British Columbia.

As an example, the province owns a 15-acre site in Surrey just off Highway 10. We were holding on to it in the event the new Surrey Memorial Hospital expansion required it. With the almost $600 million expansion of Surrey Memorial now underway at its current location, the land is surplus. Rather than letting it sit there, costing taxpayers money, we intend to sell it and let the private sector use it to generate economic activity.

There's a similar example now in the Okanagan, where the province owns a piece of land north of Kelowna. We were holding on to it for possible use as the site for a new corrections facility. Now that that project is going ahead on the Osoyoos Indian band land, the site near Kelowna is surplus and could be sold to the private sector.

School districts, health authorities and post-secondary institutions also have surplus assets. We may allow them to sell those assets and use the proceeds to support future services that meet their priorities. We will only consider selling properties that are not currently in use, that are not earmarked for future use and are of no strategic benefit for the government to own.

In total the sales will affect less than 2 percent of the province's holdings, and we expect they will raise more than $700 million over the next three years.

We will also see a small lift in revenues from MSP premiums. They will increase by 4 percent beginning in 2013. The impact on a family of three or more is about $5 a month, but the increase will generate $87 million a year in revenues to support health care services.

Because our commitment to balance the budget is integral to our economic plan, we are also making a temporary 1 percentage point increase in the general corporate income tax rate in 2014-15 to be triggered only if our fiscal situation worsens. We do this with some reluctance after seeing the benefits of going from one of the highest-taxed jurisdictions in the 1990s to one of the lowest taxed today, resulting in the creation of nearly 400,000 new jobs since 2001.

Let us not forget that we have reduced the general corporate income tax rate five times, for a total reduction of almost 40 percent since 2001. Our combined corporate income taxes are now amongst the lowest in the country, and combined with the federal tax reductions, the corporate income tax in B.C. is among the lowest of the G7 group of nations.

Business owners understand, as we do, the importance of government balancing its budget. Given the uncertain fiscal environment, there will be no further reductions to the small business corporate income tax rate. At 2.5 percent it's already amongst the lowest in Canada, and we will revisit that only after our fiscal situation has improved and allows.

Together these actions on the revenue side and continued prudence on the spending side will help ensure we meet our balanced-budget targets.

[1435] Jump to this time in the webcast

Here's how the numbers look going forward. Revenues for the next three years are projected to rise by 2.9 percent annually, and as I've already stated, we will manage spending so that it will rise by an average of just 2 percent per year.

Because we've managed prudently, we expect to beat our previous target and end '11-12 fiscal year with a deficit of $2½ billion. It is projected to decline to $968 million by the end of 2012-13, and we are projecting surpluses of $154 million in 2013-14, increasing to $250 million the following year.

To mitigate risks to the fiscal plan, we have three main levels of prudence: conservative forecasts for real GDP growth which are below the average of the private sector economic forecasts; contingencies of $300 million in '12-13 and $250 million in the each of the following years to help manage unexpected pressures and fund priority initiatives; and a forecast allowance of $200 million, increasing to $250 million in '13-14 and $350 million the following year, to guard against revenue volatility.

Capital spending for the next three years will continue at a robust pace as we continue to strategically invest in schools, health facilities, post-secondary institutions, social housing, highways and other provincial infrastructure. These investments create jobs. They also have a broader value, underpinning B.C.'s economic and export goals and furthering our reputation as a safe, stable place to do business.

Total capital spending for the next three years will be $19.2 billion. The taxpayer-supported portion will be $10.7 billion, of which $2.7 billion is newly provided through Budget 2012. This includes, for the next three years, $1.3 billion for new and expanded infrastructure including schools, health facilities, social housing and highways; $1.1 billion for maintenance and upgrading; and $300 million to support innovation, technological transformation and ministry operations. Even with
[ Page 9332 ]
these new investments, taxpayer-supported debt will remain affordable.

Our debt-to-GDP ratio, widely considered a key measure of debt affordability, will peak at 18.3 percent by 2014-15 and return to a downward track thereafter. To put that in context, the U.S. ratio is currently 73 percent. In France it's over 80 percent. In Greece it's 166 percent. Canada's debt-to-GDP ratio is 35 percent. So as you can see, at 18.3 percent B.C. is doing extremely well.

That is no accident. We've worked hard to keep our fiscal house in order through the ups and downs of the last decade, not just meeting but outperforming our budget targets in nine out of ten years. When our economy was going full steam, we used the higher revenues to pay down debt and reduce income taxes on most individuals and families by 37 percent and on businesses by a comparable amount.

That's why we've achieved seven successive credit rating upgrades, and that's why today we enjoy a triple-A credit rating, the highest possible and something that very few jurisdictions can claim. Why is that important? Because it saves taxpayers millions of dollars a year on government borrowing costs, and every dollar we don't pay in interest is one that we can invest in public services or paying down debt.

A triple-A credit rating also sends a powerful message to investors. It tells them that we're a safe harbour in the ongoing economic storm. Around the world investors make decisions worth billions of dollars every single day. They can put those dollars anywhere they want.

Our triple-A credit rating gives them confidence that British Columbia is a safe, secure place to invest, and new investment is the key to protecting and creating jobs for families and communities in every region of the province. It generates revenues that will help us pay for needed public services without putting an undue burden on taxpayers.

We are always seeking ways to lighten the load on families. That's why we increased the minimum wage. That's why our income taxes are amongst the lowest in the country.

That's why we're reviewing every major provincial Crown corporation with an eye to keeping costs down. Just like everyone else in the B.C. public sector, they have to do their part to control spending, and that includes looking at the salaries and bonuses paid to senior executives.

[1440] Jump to this time in the webcast

We're encouraging local governments to do their part too. That's why we have the new auditor general for local government to make sure fiscal prudence is the order of the day in every level of government. When it comes to public services, that means making careful strategic investments, and it's not just about spending more. If money alone was the answer, we'd have solved our health care challenges a long time ago.

Protecting the interests of taxpayers means driving innovation, encouraging efficiencies and focusing on outcomes. That is the approach that we're continuing with this budget and fiscal plan.

Funding for the Ministry of Health will increase, as it has every year since 2001. In 2014-15 the ministry budget will be $1.5 billion higher than it is today, but Budget 2012 also marks a turning point. Although the amount we're investing is significant, we are bending the cost curve down.

Before the worldwide economic crisis, health care funding in B.C. was rising by an average of about 7 percent a year. Since 2009 the rate of increase has declined to about 5 percent. Now, going forward, we're looking at lifts closer to just over 3 percent per year.

Even with this modest growth, health care is projected to account for more than 42 percent of total government spending by 2014-15. We can't just keep pouring more and more dollars in. We have to find creative ways to minimize expenses, and we are.

For example, in 2009 the health authorities launched a shared services program, leveraging their buying power, consolidating supply chains and working together to increase efficiency and improve outcomes. They're now projecting savings of $200 million by 2014.

We pioneered patient-focused funding to ensure the system focuses first not on institutional needs but rather on the needs of patients. We're also moving forward with initiatives to help reduce future demand, including the most comprehensive health promotion campaign in the country aimed at reducing the incidence of heart disease, diabetes and other often largely preventable chronic illnesses that currently account for much of the growing pressure on the system.

In British Columbia we have shown that it is possible to manage health care expenditures and still deliver excellent outcomes. Our per-capita spending is the second lowest among Canadian provinces, but our health outcomes are consistently among the best. We have the nation's highest life expectancy, the lowest death rate from cancer and the second-lowest mortality rate from heart disease. These are successes that we can build upon. We will continue to seek out efficiencies and administrative savings to maintain health outcomes while limiting, to the extent possible, the cost pressure on taxpayers.

We're taking much the same approach in education. Funding to school districts will increase again over the course of our fiscal plan in spite of declining enrolment trending downwards. School districts will receive $4.7 billion a year for the next three years, and we will invest an additional $165 million to establish a fund to deal directly with the issues of class composition. The funding will be targeted directly to the classrooms with the highest needs as determined by classroom teachers, Teachers Federation representatives and school administrators, all at the local level. It will help ensure they have the flex-
[ Page 9333 ]
ibility they need to efficiently direct resources to address issues of class composition.

At the same time, we're working on ways to make sure more of our education funding goes directly into the classroom. Districts currently spend hundreds of millions a year for administrative and other outside-the-classroom services. They expect to reduce those costs with a new shared services plan similar to the successful model pioneered by the health authorities.

As in the health sector, we can measure progress not by how much we spend in education but by the outcomes, and the outcomes are positive. The high school completion rate is now 81 percent, its highest level ever. In five districts the rate tops 90 percent. Perhaps most telling, we're seeing significant improvements in the high school completion rate for aboriginal students. It's up more than 11 percentage points since 2001, to 54 percent. But clearly, we still have room for improvement on that front, and schools are working closely with families and communities to make sure the progress of aboriginal students — indeed all students — continues to improve.

In advanced education we're challenging the sector to reduce its spending by about 1 percent by 2014-15. We're encouraging institutions to collaborate and target reductions in discretionary costs such as travel, administration and executive overhead. The province will work with universities, colleges and other institutions to help ensure that front-line programs are not affected, and we believe that a 1 percent cost reduction is very achievable.

[1445] Jump to this time in the webcast

High-quality, accessible post-secondary education continues to be a priority for this government. With student satisfaction rates holding steady in the range of 95 percent, we know our province and our education systems are on the right track.

B.C. stands out as a leader in the country in holding the line on spending while protecting vital services like health care and education. With this budget we're also putting more into ministries with growing caseload pressures, but we're funding those lifts primarily from contingencies. In other words, these are not new dollars. They are already in our fiscal plan.

At this time last year, British Columbia was on the verge of major change with a new Premier and a new opposition leader yet to be chosen. Rather than tie government's hands by allocating every last dollar available, my predecessor crafted a budget that allowed for maximum flexibility through the contingencies vote. Since then we've been tracking pressures in several key ministry areas, and now that we know clearly what the needs are, we're moving dollars from contingencies into base budget lifts.

Mr. Speaker, $237 million over three years will go to the Ministry of Justice. That includes $66 million a year to pay for the extra 168 police officers hired as part of the government's guns and gangs strategy.

As in other areas, we're not just providing more money. We're also delivering reforms. Crime rates are falling. In fact, they've declined by 33 percent in the past six years — faster than in any other province. Fewer criminal cases are going to court, but we're still seeing unacceptable delays even as we're spending over $1 billion a year on public safety and justice.

Our reform initiative will identify long-term, fiscally responsible solutions that improve outcomes and accountability. We've already merged the former ministries of Public Safety and the Attorney General into one consolidated Ministry of Justice, and that is only the beginning. British Columbians expect and deserve a justice system that deals with matters fairly and efficiently. We will be challenging the judiciary to work with us on broad systemic changes to achieve exactly that.

We are taking the same approach with Community Living B.C. Budget 2012 includes the $40 million previously announced to strengthen supports for individuals with developmental disabilities while also moving forward with the changes that were recommended by an internal audit and a rigorous review. Again, we're not just throwing dollars at a problem. We're targeting investments and at the same time taking steps to help ensure that individuals and families get the right supports to meet their needs.

The final area in which we're transferring dollars from contingencies is income assistance. We're providing $294 million over the next three years, partly to address a growing demand for disability benefits and also to respond to the relatively high numbers of single employable people now receiving assistance.

We recognize that some are feeling the effects of a slowing economy. We also know that given the chance, most people want to work. They want that sense of achievement that comes with earning a paycheque. We intend to find new ways to make that happen. In coming months the government will unveil a strategy to help connect people who are able to work with employers having difficulty filling job vacancies — for example, in the province's booming north. In some cases this may mean providing support for such things as transportation, accommodation and training to allow unemployed individuals to take full advantage of employment opportunities.

In total we are transferring $559 million from contingencies to ministries' base budgets over three years, thereby providing ministries the necessary dollars to deliver important services while reducing the requirement to carry such large contingencies.

Keeping spending under control continues to be a priority because, ultimately, it's taxpayers who foot the bill for public services. With more than a decade of sound fiscal management, we've been able to keep taxes affordable for families. We have the lowest provincial personal income taxes in Canada for individuals earning up to $120,000 a year. A family of four earning $70,000 now
[ Page 9334 ]
saves over $2,000 on their tax bill compared to 2001.

[1450] Jump to this time in the webcast

Even when you factor in consumption taxes, property taxes, health care premiums and payroll taxes, the overall tax burden in British Columbia is amongst the lowest in the country. We intend to keep it as low as possible as part of our broader economic plan.

Along with keeping taxes affordable, we're taking steps with Budget 2012 to make the cost of new homes a little more affordable. As we announced last week, British Columbia will be returning to the PST on April 1, 2013, consistent with the time frame identified by the independent panel. We are working with businesses throughout the province to make the transition as smooth as possible. We started by setting out transition rules and relief measures for the housing sector to increase certainty and fairness as we move away from the HST. Now we're building on those measures by introducing new relief for first-time buyers who are purchasing new homes.

Every young person out there today understands the challenges of getting into the housing market. As parents and grandparents, we worry about the struggles our children and grandchildren have in trying to save for their new first home. Even with the tax relief we provide to first-time buyers from the property transfer tax, it is still difficult for many British Columbians to save up enough to make a down payment and still have money left over to cover all their other costs.

That's why, as part of this budget, we are introducing the B.C. first-time new-home buyers bonus. It is a temporary refundable income tax credit for first-time buyers who purchase newly built homes, effective today until March 31, 2013. They will receive a cheque for up to $10,000. Just think of the difference that will make.

It complements the measures we announced last week, which included raising the threshold for the existing HST rebate to $850,000 and making a similar grant available for secondary homes outside the greater Vancouver and capital regional district. Over 90 percent of all new homes in the province are below this $850,000 threshold. Together these measures serve the dual purpose of giving consumers a break while supporting the new home construction sector.

But the home renovation sector is another important economic contributor, and it will benefit from a new B.C. seniors home-renovation tax credit. Like our housing measures, it serves a dual purpose. It will help reduce the costs of structural changes — such as the addition of handrails, ramps or walk-in bathtubs — to help seniors stay in their homes longer. It will also assist the construction renovation market, which will benefit from the millions of dollars of increased spending that this will spur. The credit will be worth up to $1,000 a year, and it will be available to seniors or family members sharing their home, regardless of whether they own or rent.

With this budget we are also providing for adjustments to the homeowner grant. These include creating a new supplement for low-income veterans under the age of 65 and extending eligibility for homeowners who have moved into a residential care facility but haven't yet sold their home. These measures for first-time buyers, homeowners and seniors will help make housing a little more affordable.

With this budget, as the Premier committed, we're also introducing two new tax credits for families with children. The children's fitness credit and children's arts credit complement existing credits offered by the federal government. Families will be able to claim up to $500 in eligible expenses per child, per credit, per year, for any eligible sports or arts program.

That means that a family of three children can claim up to $1,500 a year, assuming each child is involved in a sports or arts program outside of the school system. That will help to put a few dollars back into families' pockets, and we will continue seeking ways to make life a little easier for families as the climate of global economic uncertainty continues.

As we look at other jurisdictions struggling with debt and overspending, we know without a doubt that the plan we've created for British Columbia will keep us on the right track. Just as this government has always focused on keeping B.C.'s fiscal house in order, we have also been working since day one to build a stronger, more competitive economy. We recognized in 2001, as we do today, that our prosperity is tied in part to the fast-growing markets of the Asia-Pacific. That's why we've worked with the private sector and the federal government to build the Pacific Gateway and focused on expanding our export markets.

[1455] Jump to this time in the webcast

Now, with the strategy working, we are essentially accelerating it with the B.C. jobs plan, and we are seeing some remarkable results. Exports in 2011 were up 14.2 percent, bolstered by our growing relationships with Asia. Our markets are increasingly diversified. In 2001 almost 70 percent of our exports went to a single market — the United States. Today it's less than 50 percent. Given the state of the U.S. economy, that's a real advantage.

Lumber sales to China in 2011 surpassed our target of four billion board feet, a target many critics had dismissed as being too ambitious. Mining is taking off. Exploration spending in 2011 was 1,500 times higher than a decade ago. New mines are opening, others are expanding, and we're on track to meet the B.C. jobs plan target of eight new mines and nine expansions by 2015.

Rio Tinto Alcan recently announced the largest private sector investment in B.C. history — $2.7 billion to modernize its Kitimat aluminum smelter. Seaspan has landed the largest shipbuilding contract in British Columbia history, and we are moving forward to develop a brand-new liquefied natural gas industry. The Kitimat LNG facility
[ Page 9335 ]
has secured a 20-year export licence, the first of its kind ever issued in Canada.

These are just a few examples of how our economic plan is helping us build a stronger, more competitive economy, protecting and creating jobs for families in every region. At a time when so many jurisdictions are looking inward as they struggle with huge financial challenges, we are turning our attention and our marketing focus outward.

With this budget we will invest up to $15 million to support an aggressive, targeted campaign to promote our competitive advantages in key markets around the world. We'll be telling B.C.'s story and inviting investors to be part of that success. We're also introducing a series of targeted tax changes to help ensure that we keep our economic momentum going.

First, effective April 1, 2012, we will eliminate the provincial jet fuel tax for international flights. This tax is set at two cents a litre, which may not sound like much. But taking it out of the cost equation will save airlines thousands of dollars a day on long-haul Asia flights, supporting the B.C. jobs plan target of at least one new international carrier per year at YVR for the next two years. Each daily international flight service added to our airports creates 150 to 200 new jobs at the airport, not to mention the spinoff jobs and the economic benefits. With our confirmation of this tax change today, YVR has secured commitments from 22 airlines to expand their service immediately.

Second, we are extending property tax relief for ports, which are vital to our transportation infrastructure, especially as we continue to expand our trade with Asia. We will introduce legislation to make the existing cap on municipal tax rates permanent at a later date. The cap was introduced in 2004 to help make our ports more competitive and spur new investment that would generate new jobs.

In 2007 we extended the cap out to 2018, and we saw investments of more than $1 billion in terminal expansions, which generated hundreds of new jobs in our ports. Now we're making the cap rate permanent, because it's working. We will continue to compensate affected local governments for the difference.

As we announced with the jobs plan, we're also providing new support for small business. This includes an additional $3 million for the small business venture capital program. It encourages, under this program, so-called angel investors to put their own capital directly into an eligible small business and offer strategic expertise to help it grow. The $3 million increase will allow for up to $10 million annually in additional equity financing for qualifying new businesses.

We're also extending the training tax credit program, which encourages employers and workers to get involved in apprenticeship programs. We're introducing new training tax credits for shipbuilding and ship repair industry employers, supporting jobs in this newly revitalized sector.

These tax changes will help spur new growth and investment in sectors where we have a competitive advantage. At the same time we continue seeking ways to make all our businesses and all our sectors more competitive. We're investing millions of dollars in training programs, recognizing just how essential skilled workers are to economic growth.

[1500] Jump to this time in the webcast

We've set up an aboriginal business and investment council to help ensure that aboriginal businesses and communities participate fully in the province's ongoing economic development.

We've appointed an expert panel to advise on business tax competitiveness, and with our climate action plan we continue taking steps to ensure that economic growth and job creation do not come at the expense of the long-term health of our environment.

We remain committed to addressing climate change. However, four years in, the revenue-neutral B.C. carbon tax remains the only one of its kind in North America. With this budget we are implementing the last in a series of scheduled rate increases.

No further increases have been scheduled beyond 2012, so this is a good time to pause and examine how the carbon tax is affecting our economic competitiveness, both on the positive side and on the negative side. To that end we will carry out a comprehensive review, examining the tax's impact, as I mentioned, both positive and negative on every economic sector.

We will pay particular attention to agriculture, recognizing its critical importance to our future. By 2030 Canada will be one of just a small handful of countries exporting more food than it imports, and B.C. is recognized around the world as a trusted supplier of safe and nutritious foods.

We have the most diverse agrifood sector in the country, but it will face significant challenge to its competitiveness and profitability with the return of the PST. This is due in part to the fact that the industry in many cases is export-driven. It sells to international markets where competitors with similar or lower-cost structures enjoy greater economies of scale and create downward pressure on prices.

In that kind of highly competitive environment the carbon tax is a concern, so in the months ahead we will work with the greenhouse sector in particular, initially, to provide relief to offset the cost of the carbon tax.

We will also continue moving forward with other components of our climate action plan. That includes the LiveSmart program, which serves the dual purpose of helping people make their homes more energy-efficient and supporting the home construction–renovation sector, and the program we announced in November to help B.C. drivers plug into clean cars while also sup-
[ Page 9336 ]
porting the province's growing green technology sector. It gives buyers up to $5,000 off the sticker price of qualifying new vehicles and provides up to $500 in rebates to offset the cost of installing vehicle charging stations in their own homes.

We're also moving forward with a plan to use natural gas to power heavy-duty fleets, and we will continue to develop clean energy.

The final element of this new budget and fiscal plan is a reaffirmed commitment to finding and eliminating the silent job killers: unnecessary regulations. They create frustration and discourage new investment, so we will act quickly in areas where they're strangling economic development. For example, in the natural resource sector we've invested $24 million in a targeted program to reduce the turnaround time for mineral exploration permits.

We're on track to meet our targets for reducing the backlog of notices of work for mining by 80 percent by the end of August 2012 and for water and land tenures by 50 percent by the end of December of this year.

We have extended our commitment to no net new regulations out to 2015, and in the months ahead we will move decisively in areas where we are not competitive, such as the arcane rules that now govern liquor sales in the hospitality sector. The Ministers of Energy and Finance will together lead an expedited liquor reform initiative to modernize liquor standards in our province and create even more opportunities for growth.

Since 2001 we have reduced the regulatory burden in this province by more than 42 percent, surpassing our original target of 33 percent. We are recognized by the Canadian Federation of Independent Business as Canada's top performer in this area. We remain committed to making it easier for business to do business, while at the same time protecting public health, safety and the environment.

This is an exciting time for British Columbia and Canada. Yes, we face challenges, but at the same time, we have tremendous opportunity ahead of us. Our low debt, our low taxes and triple-A credit rating set us apart and set B.C. up to be a magnet for global investment. That in turn drives job growth, income growth and revenue growth so that we can afford to invest in services for families and communities.

[1505] Jump to this time in the webcast

As government, our role is to foster an environment where business can grow, where families can thrive and where people from around the world can invest their dollars with a real sense of confidence, and confidence starts with exercising discipline and keeping the government's fiscal house in order.

To some of us, that's common sense. But let's remember back to 2001. When we were first elected and we got the province back on the road to balanced budgets, there were people who asked us why and questioned the need to meet, as they saw it, some kind of arbitrary target.

Well, as we look around the world today, we can see that balanced budgets are anything but arbitrary. They are an essential foundation for growth, and that's why our balanced-budget legislation mandates not just a time frame for balancing but, also, pay cuts for ministers every year the budget is in a deficit.

Keeping British Columbia's fiscal house in order does mean some tough decisions in the short term, but consider what's at stake here. It is our future — the future of our province and of our people.

We have one of the most diverse populations anywhere, with ties to countries and cultures from around the world. While we are all unique individuals, we all want the same basic things for our future. We want to be able to support ourselves and take care of our families. We want to know that important public services will be there when we need them. We want strong, secure communities where everyone contributes and everyone belongs, and we all want to share in the wide-open sense of opportunity that has for over 150 years been the hallmark of British Columbia.

That's what keeps on bringing people here. That's what generates confidence, growth and investment. And that's the kind of future we're building with this budget — a future of security, of growth and of opportunity. Thank you for being part of it. Now let's get to work.

B. Ralston: To begin, I'd like to thank the Finance Minister for deciding to present this budget here in the Legislature, instead of in the studio of a radio station. [Applause.] But that's where the applause ought to end when it comes to this budget. There was a lot of effort put in to downplay expectations for this budget, and the government certainly delivered in that regard.

People across this province have really been struggling, and this budget shows a government with no vision stumbling along and continuing to get its priorities completely wrong. This budget offers nothing to help middle-class and working families.

We have seen a government spending money on advertising for old-fashioned boosterism, whether it's the HST, the jobs plan, the education plan. Millions of dollars that have been spent provide no benefit or relief for most British Columbians — $600 million on a roof for B.C. Place, $100 million wasted on a student information system that doesn't work, millions in legal fees and payouts to Liberal insiders as part of the B.C. Rail scandal, an inflated $30 million payout to Boss Power because the government broke the law.

Today's budget shows that this government hasn't learned that it's past time to focus on solving the real problems facing our province.

[ Page 9337 ]

Mr. Speaker: Members.

B. Ralston: In addition, what we see is a government that freely admits it will spend $15 million more on jobs plan advertising but can't find another dime for student assistance. We see a government that will ask our colleges and universities to cut their spending over the next three years but will leave the Premier's office spending completely untouched. We see government communications spending being protected at more than $26 million, while families face yet another increase of 4 percent in medical service premiums, coming in on January 1, 2013.

On February 16 of this year we saw an Auditor General report on forest health in British Columbia. It is a dramatic indictment of the failure by the B.C. Liberals to address the growing crisis in forest health.

The Auditor General's report clearly confirms what independent experts and even the government's own ministry officials have been saying for years — that our publicly owned forests are in terrible shape and that the government has neither the plan nor the capacity to fix the problem. Since 2001 more than 70 mills have closed and the forest industry has shed more than 35,000 full-time, family-supporting jobs.

[1510] Jump to this time in the webcast

What is in this budget for the forest industry? Well, the budget speech does not even mention the word "forests." In fact, over the two years this government plans to cut the budget for forest health by $20 million.

Two days before the forest report, we had the Ombudsperson report on the state of care for seniors, with 143 findings and 176 specific recommendations to fix the problems created by the Liberal government. That report confirms that the government doesn't really know what is going on in the seniors care system. The report outlines some key problems in the way the government treats seniors but notes there are no standards in key areas of residential care, including things like bathing, dental care and call response time. We see little in this budget to really tackle the mismanagement facing B.C. seniors care.

What we were looking for in this budget were real solutions for middle-class and working families in British Columbia. The need for skills training has never been greater. We know that close to 80 percent of the jobs of the future will require some form of post-secondary education, but since the Liberals eliminated non-repayable needs-based grants, students have gone deeper into debt. British Columbia students now carry the second-highest average student debt west of the Maritimes, at $27,000, and students in British Columbia pay the highest provincial student loan interest rate in the country — prime plus 2.5 percent. There is nothing for these students.

Post-secondary institutions are being asked to cut their budgets. Apprenticeship training is facing a cut over the next few years. Yet income inequality continues to grow in British Columbia. A report released in late January by the B.C. government itself puts B.C. dead last in disparity between the highest and lowest income earners.

B.C. has had the worst child poverty record in the country for almost a full decade. One in four children lives below the poverty line. A budget that is supporting a meaningful families agenda must surely offer some assistance for these children and families. Where is any movement towards a real poverty reduction plan in this budget? Nowhere.

We have a government that has picked people's pockets with a slew of new or higher fees, premiums and taxes and has failed to invest in the services and programs that help the economy grow. Whether economic development was stalled due to government gutting the capacity to issue appropriate permits or because there has been no meaningful investment in workforce development, 11 years of missed opportunities and worse have come home to roost.

In addition to mismanagement across government, this government seems to be unable to stand up for British Columbia when it comes to costs that would be downloaded by the federal government, either through the crime bill, the health transfer or trade deals. We see no evidence that this government has undertaken their due diligence to protect B.C. taxpayers from significant costs that Ottawa is poised to add to future budgets.

Families were hoping for some HST relief, but instead we see yet another year of continued transfer of tax burden from corporations onto the backs of individuals and small business.

It's hard to know how much credence to give the statements that we heard today from the government on their fiscal forecast because, to be honest, the government's credibility is in tatters when it comes to budgets anyway. Remember the 2009 pre-election budget when this government said the deficit would be $495 million maximum? Well, it turned out that was four times that amount — $1.8 billion.

In addition to the real austerity in this budget, it is striking for its lack of ideas and vision. Today was supposed to be a defining moment for a new Premier. Instead, we saw a Premier running out the clock on the former Premier's mandate, more mismanagement for which middle-class and working families are still paying the price.

I'll have more to say about the budget tomorrow, but for now I move adjournment of the debate.

B. Ralston moved adjournment of debate.

Motion approved.
[ Page 9338 ]

Introduction and
First Reading of Bills


Hon. K. Falcon presented a message from His Honour the Lieutenant-Governor: a bill intituled Budget Measures Implementation Act, 2012.

Hon. K. Falcon: I move first reading of Bill 21, Budget Measures Implementation Act, 2012.

Motion approved.

Mr. Speaker: Continue, Minister.

Hon. K. Falcon: Bill 21 is divided into two parts. Part 1 contains the non-tax measures in the budget, and part 2 contains many of the tax measures.

[1515] Jump to this time in the webcast

Part 1 of Bill 21 amends the Gaming Control Act to clarify statutory responsibility for the administration and distribution of gaming grants. The bill also amends the Members' Remuneration and Pensions Act to extend the freeze on annual compensation for Members of the Legislative Assembly to the 2013-14 fiscal year.

Part 2 of Bill 21 amends the Income Tax Act to implement several personal income tax measures for individuals and families. These include a new children's fitness credit, a new children's art credit, an increase to the enhanced dividend credit and the removal of the medical expense expenditure limit for taxpayers claiming expenses for certain dependents.

The act is also amended to extend the B.C. training tax credits for an additional three years and to provide for new training tax credits for B.C.'s shipbuilding and ship repair industry.

The act is further amended to extend the book publishing tax credit for an additional five years and to provide the full Film Incentive B.C. tax credit for interprovincial co-productions.

Bill 21 amends the Small Business Venture Capital Act to allow for $3 million a year in tax credits targeted to direct investments in eligible new small businesses, supporting up to $10 million annually in equity financing for these businesses.

Bill 21 amends the Home Owner Grant Act to provide a grant supplement of up to $275 annually to low-income veterans and to extend the eligibility for homeowners moving into a residential facility.

The Land Tax Deferment Act is amended to remove the fire insurance requirement for homeowners with sufficient equity and to clarify the deferment eligibility criteria with respect to leaseholders.

The Taxation (Rural Area), School and Property Transfer Tax acts are amended to provide or clarify exemptions in certain situations.

The Carbon Tax Act is amended to clarify that carbon tax rates continue in future years at the July 1, 2012, rates.

Finally, the Carbon Tax, Motor Fuel Tax, Police and Property Transfer Tax acts are amended to make various streamlining and administrative changes.

I move that Bill 21 be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 21, Budget Measures Implementation Act, 2012, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Tabling Documents

Hon. K. Falcon: I have the pleasure to rise to table the Budget and Fiscal Plan 2012-2013–2014-2015, which fulfils the requirement of section 7 of the Budget Transparency and Accountability Act. I also table, on behalf of the Premier and the ministers responsible, the government's overall strategic plan and service plans required under the Budget Transparency and Accountability Act.

The service plan documents are presented in two binders. The first binder contains service plans for the Office of the Premier and 16 ministries. The second binder contains service plans for 27 Crown corporations.

The second binder includes a list of organizations that are exempted from the service plan requirements under section 13 of the Budget Transparency and Accountability Act. It also identifies an organization added to the government reporting entity by regulation, with an explanation for this addition. It also indicates that this organization will be exempt from service plan requirements and provides the reasons for this exemption.

Finally, it identifies two organizations that are being added to the Budget Transparency and Accountability Act's definition of education and health sector organizations, together with the reasons for this addition.

Hon. R. Coleman moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 1:30 tomorrow afternoon.

The House adjourned at 3:19 p.m.

[ Return to: Legislative Assembly Home Page ]

Hansard Services publishes transcripts both in print and on the Internet.
Chamber debates are broadcast on television and webcast on the Internet.
Question Period podcasts are available on the Internet.

TV channel guideBroadcast schedule