3rd Session, 38th Parliament
November 15, 2007
The Budget 2008 Consultation Process
Analysis of the Public Consultations
Meeting British Columbia's Climate Change Goals
Encouraging Environmentally Responsible Choices
Discouraging Greenhouse Gas Emissions
November 15, 2007
To the Honourable
Legislative Assembly of the
Province of British Columbia
Victoria, British Columbia
Honourable Members:
I have the honour to present herewith the First Report of the Select Standing Committee on Finance and Government Services for the Third Session of the 38th Parliament.
The First Report covers the work of the Committee on the Budget 2007 Consultations.
Respectfully submitted on behalf of the Committee,
Bill Bennett, MLA
Chair
Bill Bennett, MLA |
Chair |
East Kootenay |
Bruce Ralston, MLA |
Deputy Chair |
Surrey-Whalley |
Iain Black, MLA |
|
Port Moody-Westwood |
Harry Bloy, MLA |
|
Burquitlam |
Randy Hawes, MLA |
|
Maple Ridge-Mission |
Dave S. Hayer, MLA |
|
Surrey-Tynehead |
John Horgan, MLA |
|
Malahat-Juan de Fuca |
Jenny Wai Ching Kwan, MLA |
|
Vancouver-Mount Pleasant |
Richard T. Lee, MLA |
|
Burnaby North |
Bob Simpson, MLA |
|
Cariboo North |
CLERKS TO THE COMMITTEE
Craig James, Clerk Assistant and Clerk of Committees
Leslie Gönye, Clerk Assistant (Committees), Parliament of New South Wales, Australia
Katch Koch, Committee Clerk, Legislative Assembly of Ontario
COMMITTEE RESEARCHERS
Jonathan Fershau, Committee Research Analyst
Naomi Adams, Committee Researcher
Erin Bett, Committee Researcher
Lindsay Gardner, Committee Researcher
Jeremy Wood, Committee Researcher
On April 19, 2007, the Legislative Assembly agreed that the Select Standing Committee on Finance and Government Services be empowered:
to examine, inquire into and make recommendations with respect to the pre-budget consultation report prepared by the Minister of Finance in accordance with section 2 of the Budget Transparency and Accountability Act and, in particular, to:
In addition to the powers previously conferred upon the Select Standing Committee on Finance and Government Services, the Committee shall be empowered:
and shall report to the House as soon as possible, or following any adjournment, or at the next following Session, as the case may be; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.
The Select Standing Committee on Finance and Government Services would like to express its gratitude and appreciation to the 5,800-plus British Columbians who took part in this year's process. The ongoing public interest in the budgetary process is unprecedented, not only in Canada , but likely throughout the entire Commonwealth. The ideas and suggestions we read and heard play a vital role in shaping our response to the Minister of Finance's budget consultation process.
The Committee is supported in its task by the dedicated staff of the Legislative Assembly of British Columbia — in particular, the Office of the Clerk of Committees and Hansard Services. We would like to acknowledge their important contributions to this process — both at our public hearings throughout the province and working behind the scenes in Victoria.
We would also like to thank Katch Koch, Committee Clerk with the Legislative Assembly of Ontario and Leslie Gönye, Clerk Assistant (Committees) with the Parliament of New South Wales, Australia. Messrs. Koch and Gönye provided procedural advice to the Committee during our public hearings.
On April 19, 2007, the Legislative Assembly of British Columbia approved a motion instructing the Select Standing Committee on Finance and Government Services to conduct public consultations on the Budget 2008 Consultation Paper. The Committee's terms of reference specified that the Finance Committee was to receive proposals and recommendations regarding the provincial budget for the upcoming fiscal year and to make its report public no later than November 15, 2007.
On September 4, 2007, the Committee announced the locations of 13 public hearings across British Columbia. Due to strong demand, the Victoria public hearing was extended in length; a public hearing was added in Abbotsford; and the submission deadline was extended by one week (from October 19 to October 26, 2007). The Committee also accepted and reviewed written submissions, on-line responses to the budget consultation questionnaire, and responses returned using the budget consultation flyer. In total, more than 5,800 British Columbians participated in this year's budget consultation process.
This year, the Committee's report addresses the three themes contained in the budget consultation paper: meeting B.C.'s climate change goals, sustaining health care for future generations, and reviewing additional housing initiatives for British Columbians. It also contains several suggestions we heard on British Columbians' other budgetary priorities.
Having identified the budgetary choices British Columbians are prepared to make to reduce B.C.'s greenhouse gases by at least 33 percent by 2020, the Committee makes five recommendations. We emphasise that government, must maintain a growing economy and pay down the provincial debt regardless of any policy shifts to address climate change. Furthermore we believe that the government should take decisive action on climate change by providing clear and concise information on programs and measures available to individuals and businesses to change behaviours; continue to address a broad range of environmental and conservation issues; and expedite the construction of rapid transit.
With respect to encouraging environmentally responsible choices, we recommend that the government consider incentives to promote energy-efficient households; support for British Columbia's agricultural industry and local food production; provide incentives to support B.C.'s growing biofuels industry; support the trucking industry's green transition; and review measures to promote environmentally-friendly packaging for consumer goods.
We heard a strong message for the government to recognize that there is a clear urban/rural divide with respect to transportation-related taxation. The Committee also believes that new taxation to discourage activities that create greenhouse gases should be a second choice to positive, incentive-based programs. We recommend that the government participate in a carbon trading system that benefits B.C. businesses and taxpayers. However, acknowledging the potential for government to implement a carbon tax, we also recommend that the government mitigate the impacts of such as tax on lower- and middle-income families.
The Committee was surprised by how few suggestions the public made on how to make our health care system sustainable for future generations. However, we do make several recommendations such as expanding the role for ActNow BC; proposing a new fitness tax credit; increasing tobacco taxes; and encouraging the government to consider using tax policy to encourage a shift in sales to beverages with lower alcohol content.
With respect to housing options for British Columbians, the Committee makes several suggestions including: raising the threshold for first-time home buyers under the property transfer tax, and continuing to take steps to promote the development of affordable housing.
The Committee also puts forward recommendations on a variety of other budget priorities raised by British Columbians: arts funding; child care spaces; transportation infrastructure; post-secondary education; and the need for increased immigration to address looming labour shortages; taxation levels and restorative justice programs.
On April 19, 2007, the Legislative Assembly of British Columbia approved a motion instructing the Select Standing Committee on Finance and Government Services (the Finance Committee/the Committee) to conduct public consultations across British Columbia, and to make recommendations with respect to the budget consultation paper prepared by the Minister of Finance in accordance with sections 2 and 3 of the Budget Transparency and Accountability Act.
This year marks the eighth consecutive year in which the all-party Finance Committee has conducted province-wide consultations on the province's budget and fiscal priorities.
The Committee held 14 public hearings attended by 222 witnesses; received 477 written submissions; and reviewed 3,863 on-line and 1,241 flyer responses. The Committee is committed to providing all British Columbians — whether they represent a non-profit organization, a private business, or themselves as individuals — the opportunity to be heard.
This year, the Committee held an organizational meeting on May 29, 2007. Bill Bennett, MLA was elected the new Chair of the Committee, replacing Blair Lekstrom, MLA. Bruce Ralston, MLA, was re-elected as the Committee's Deputy Chair. The Committee also discussed travel logistics and its preliminary budget consultation plan.
What we are asking, as a real key note on this particular paper to the people of B.C., is for their suggestions, opinions, advice, warnings on what we might do as a government when we look at climate change initiatives. The climate change agenda will certainly be a part of this coming budget. We're really looking to the people of B.C. to see what their ideas are. (Hon. Carole Taylor, Minister of Finance, September 14, 2007).
This year, the Minister of Finance, Hon. Carole Taylor, released both the first quarter update for 2007/08 and the Budget 2008 Consultation Paper on September 14, 2007. Highlights of this year's Quarterly Report include:
The Minister of Finance met with the Committee on September 14 to elaborate on her chosen theme for this year's consultation process, as well as to respond to questions by committee members. Several Members queried the Minister on the process by which the Ministry of Finance considers the Committee's report in preparation of the upcoming provincial budget. In particular, they requested the Minister's assurance that all of the Committee's recommendations are given due consideration — particularly given the Committee's report is not issued until mid-November.
In response, the Minister of Finance indicated that the timing of the budget consultation process (September 15 to November 15) is set within the Budget Transparency and Accountability Act, with the current timelines for the Committee's work having been in place since 2001. The Minister further explained that while the process for reviewing budgetary estimates does go on for several months, her ministry does not “put together our final recommendations to Treasury Board until after we've heard from your report, as well as other sources.”
This year, the Minister of Finance's annual budget consultation paper asked British Columbians to consider what choices they would make to meet the provinces's goal of reducing greenhouse gas emissions by one-third below current levels by 2020. The consultation paper provided the reader with basic information on: the main causes of household greenhouse gas emissions; the province's fiscal and economic forecasts for the next three years; and an overview of infrastructure expenditures undertaken by the province in 2006/07.
Copies of the budget consultation paper were also prepared in Chinese and Punjabi and made available on the Committee's website: leg.bc.ca/budgetconsultations.
The Ministry of Finance's budget 2008 consultation paper included six questions to be considered by British Columbians. In keeping with the theme of promoting a greener future for British Columbia, the public was requested to provide responses on three questions on options for reducing greenhouse gases:
The fourth question sought the public's opinions on how government can make the health care system sustainable while also addressing other priorities. The question posed is as follows:
The fifth question posed by the Minister of Finance asked for ideas on additional programs to address homelessness and home affordability:
Finally, the public was given the opportunity to comment on any other issues related to the next provincial budget.
To encourage an open and inclusive public debate on British Columbia 's budget and fiscal priorities, the Finance Committee employed four distinct methods of public consultation: public hearings, written submissions, on-line responses, as well as budget consultation flyers. The variety of options available to the public to provide input on the provincial budget and the high volume of submissions received makes this parliamentary budget consultation process unique in Canada.
As required by the Budget Transparency and Accountability Act, the Committee commenced its annual public consultations on the upcoming provincial budget immediately following the release of the budget consultation paper on September 14, 2007. The consultation period was scheduled to last until October 19; however, due to both unanticipated difficulties in distributing the consultation paper to communities outside the lower mainland and strong public demand, the deadline for submissions was extended to October 26, 2007. We attribute this modest year-over-year decline in submissions mainly to the fact that this year's questionnaire asked respondents to provide more thorough written replies — rather than simply checking off priorities from a pre-determined list. This gave us more thoughtful and detailed, but fewer, submissions.
The Committee received significant support in promoting the budget consultation process from the Ministry of Finance. In addition to distributing the budget consultation paper to households across British Columbia , the Ministry ran advertisements alerting the public to the Committee's consultation process in the province's community and regional newspapers.
As per the Committee's practice, all submissions received — oral testimony, written submissions, on-line submissions, and flyers — were reviewed and considered in our deliberations. More detailed information on the submissions by type and by region may be found in Appendix A.
In order to meet its statutory obligations, the Committee released its public consultation schedule on September 4, 2007 — ten days prior to the release of the budget consultation paper. The Committee publicized these hearings through advertisements in community and regional newspapers. Hearing notices were also posted on the Committee's website: leg.bc.ca/budgetconsultations.
From September 18 to October 19, 2007, the Committee held a total of 14 public hearings in the province's major regional centres. To accommodate strong demand, the hearing in Abbotsford was added and additional witnesses were scheduled for our public hearing in Victoria . In addition, an open mike session took place at the end of each hearing to accommodate citizens who were unable to pre-register with the Office of the Clerk of Committees. In total, the Committee heard 222 witnesses at the various public hearings (See Figure 1). A complete list of the groups and individuals appearing before the Committee may be found in Appendix B.
This year, 477 written submissions pertaining to the budget consultation process were received by mail, fax, or e-mail. As is the practice of the Committee, advertisements announcing the call for written submissions were placed in community papers across the province. This year, most of the written submissions came from individuals rather than from private businesses or community organizations. Figure 2 provides an overview of the submissions received by region. A complete list of written submissions received is provided in Appendix C.
The Finance Committee again offered the public the opportunity to respond to the budget consultation questionnaire using the Committee's innovative on-line response form. This year, the Committee received 3,863 responses through the Committee's secure website. This year's questionnaire asked respondents to provide more thorough written replies — rather than simply checking off priorities from a pre-determined list. The Committee is pleased in this change of format as it affords the opportunity to provide a more in-depth response to the questions posed.
Internet-based consultations provide exciting, yet challenging opportunities for the work of parliamentary committees. With respect to our web-based consultations, we observed the following:
These three observations suggest that advocacy groups are organizing and encouraging support for their positions through the Committee process. We also noted that the number of on-line responses received from largely urban ridings greatly outnumber submissions from more rural or remote locations in British Columbia.
Figure 3 provides an overview of the on-line responses received by region, with participants providing verifiable contact information listed in Appendix D.
Again this year, the Ministry of Finance mailed a copy of the Budget 2008 Consultation Paper to households across British Columbia. On October 16, 2007, the Committee was informed that there was a delay in distributing the consultation paper to some regions. To accommodate those British Columbians who may not have received their consultation paper until late in the process, the Committee extended its consultation deadline for on-line and household mailers by one week to October 26, 2007. In total, the Committee received 1,241 flyer responses. A regional breakdown is provided in Figure 4. Participants providing complete and verifiable contact information on the household flyer are listed in Appendix E.
May 29, 2007 |
Organization meeting |
Victoria |
September 14, 2007 |
Briefing |
Victoria |
September 18, 2007 |
Public Hearing |
Prince George |
September 18, 2007 |
Public Hearing |
Quesnel |
September 19, 2007 |
Public Hearing |
Terrace |
September 20, 2007 |
Public Hearing |
Campbell River |
September 21, 2007 |
Public Hearing |
Vancouver |
October 3, 2007 |
Public Hearing |
Victoria |
October 5, 2007 |
Public Hearing |
Mission |
October 5, 2007 |
Public Hearing |
Coquitlam |
October 9, 2007 |
Public Hearing |
Cranbrook |
October 10, 2007 |
Public Hearing |
Kelowna |
October 10, 2007 |
Public Hearing |
Kamloops |
October 11, 2007 |
Public Hearing |
Surrey |
October 12, 2007 |
Public Hearing |
Abbotsford |
October 19, 2007 |
Public Hearing |
Dawson Creek |
October 29, 2007 |
Deliberations |
Victoria |
October 31, 2007 |
Deliberations |
Victoria |
November 6, 2007 |
Deliberations and Adoption of the Report |
Victoria |
Increased surpluses provide choices for British Columbians. These include ways to encourage environmentally responsible choices for consumers, businesses and government; increased spending for health care and other government programs; and lower taxes and reduced debt. However, commitments to these areas must be affordable today as well as being sustainable in years ahead. (Ministry of Finance, Quarterly Report: First Quarter, April to June 2007, page 4).
The responses the Committee received from our four methods of public consultation yielded a diversity of opinions on the province's future fiscal and economic priorities. While the Committee annually faces the daunting challenge of reviewing the thousands of submissions received, never before has the Committee confronted such a stark difference between what we heard at our 14 public hearings and what we read in the written, on-line, and flyer responses.
In reviewing the transcripts and briefing materials prepared by witnesses at the public hearings, few opted to propose recommendations to address climate change, the delivery of sustainable health care, or housing initiatives. Rather, the overwhelming majority of organizations appearing before the Committee opted to use their time to promote issues such as post-secondary education, child care, arts funding, and other topics commonly raised with this Committee.
In contrast, we received thousands of on-line and flyer submissions articulating a wide array of possible solutions for a greener future in response to the budget consultation questionnaire. We have concerns that the openness of the Committee's on-line consultation process may lend itself to an over-representation of responses from advocacy organizations capable of mobilizing small, yet highly-motivated, sub-sections of the population. The Committee highlights this observation — not to diminish the important contributions made by the individuals who took the time to complete the on-line survey — but rather to recognize the challenges faced by committee members when making recommendations on the province's budget priorities.
It is clear to committee members that the province's sound fiscal framework and surplus budget projections are raising the expectations of British Columbians for additional resources for on-going programs and services. However, the potential for declining natural resource revenues and a slowing U.S. economy may challenge the government's revenue projections. Therefore, we have strong reservations about recommending that government increase spending in programs that result in significant ongoing expenses to the provincial treasury. It is this Committee's opinion that surplus revenues should, for the most part, be directed to one-time capital projects, or to paying down the provincial debt.
Committee members acknowledge that there is a great diversity of opinions concerning the province's budget priorities. Our report is required to not only address the questions contained in the budget 2008 consultation paper — namely reducing greenhouse gases, sustaining health care, and providing housing options — but also to reflect on the other budgetary priorities identified by British Columbians. To this end, our report follows the following format.
This report begins by reviewing the responses received on three questions pertaining to climate change. This analysis includes a review of the large-scale programs and policy themes suggested by the public in Question 1; the public's suggestions for positive tax incentive-based programs requested for Question 2; and a review of the public's proposals for tax changes to discourage greenhouse gas emissions as per Question 3. These summaries are intended to highlight the range of possibilities available to the government for action on climate change.
However, the Committee does not possess the capacity to assess the financial implications or effectiveness of the various and often conflicting recommendations presented by witnesses throughout the consultation process. We therefore make only a few specific recommendations on the climate change portion of the paper, but have tried to provide the Minister of Finance — and the public at large — with a fair representation of what we heard from the public as potential options to address climate change. In our view, the responsibility to conduct comprehensive technical reviews on these recommendations must reside with government.
Second, although Question 4 in the budget consultation paper focused on the sustainability of the health care system, British Columbians obviously are more focused on ways to enhance service delivery. Out of respect for those members of the public who did give us their ideas on health care, we have included the major ideas we heard. However, the Committee also provides a caution to government that British Columbians may not yet fully appreciate the daunting challenge to the sustainability of health care in B.C. that changing demographics represents.
Third, we address the question concerning other housing initiatives that government should consider. While the majority of responses to this question came from the on-line and flyer responses, we also highlight several submissions that emerged from the public hearings.
Fourth, our Committee examines the myriad of other priorities raised at the 14 public hearings, and through the written submissions and on-line and flyer responses. It is always a challenge for the Committee to decide which issues in this “catch-all” section to highlight. This year we tried to err on the side of covering too many issues, as opposed to too few.
Question 1: What budget choices would you make to help reduce B.C.'s greenhouse gases by at least 33 percent below current levels by 2020?
The first question of the budget 2008 consultation paper asked British Columbians to identify potential investments or non-tax related projects that the government can adopt to reduce greenhouse gas emissions.
There are diverse perspectives on how to best achieve B.C.'s climate change goals, but it is clear that British Columbians want government to take action on climate change. In this section, we identify the prominent themes we heard during the consultation process. The key themes for government action we heard include:
The Committee wishes to also highlight some of the other themes contained in the thousands of submissions received: increased subsidies for public transit and cycling infrastructure; the need for the government to lead by example with respect to green building standards; and the potential for the adoption of Leadership in Energy and Environmental Design (LEED) building standards.
A clear and unsolicited message the Committee heard was that British Columbia 's measures to reduce greenhouse gases must neither adversely affect the B.C.'s strong economic position nor increase the province's debt-to-GDP ratio. Indeed, there is strong demand from British Columbians for the government to adopt a more rigorous approach to eliminate the province's debt. This message was reiterated time and time again in the on-line consultations.
Many British Columbians believe it is possible to achieve the reduction of greenhouse gases by 33 percent by 2020, but that this target can only be met if supported by a strong and growing economy.
The Committee concurs with the presentation made by the Canadian Federation of Independent Business that it is possible to grow the economy and protect the environment at the same time. Without a robust economy, meeting the government's climate change goals will be a significant challenge.
Below is a sample of the comments we heard concerning the need to carefully balance sound fiscal policies with government policies to address climate change.
“The Chamber believes that these choices should focus on a vibrant, prosperous and sustainable economy. The choices that are made to achieve a greener future must balance economic concerns with the need to reduce our greenhouse gas emissions. It is only if we have a strong economy will be able to square the circle of tackling the challenge of climate change with the imperative of continued economic growth for all British Columbians.” (B.C. Chamber of Commerce).
“We have to be very careful in dealing with greenhouse gases, because there are unintended economic consequences that may arise from them. The caution that I would provide is that yes, we can say we want to reduce greenhouse gases, but we must look at the unintended consequences as well, especially some of the economic impacts. The cost of putting in some measures for greenhouse gases may far outweigh the economic benefit of spending that money in other areas.” (Vancouver Board of Trade).
“Use surpluses to reduce the provincial debt. Do not use surpluses to initiate programs which have on-going yearly costs to maintain.” (Michael Hinman, Port Moody).
“When times are good, as they are now, surpluses must go to paying down the debt. The savings in interest costs on reducing the debt should be reinvested in health care and energy conservation.” (Michael A. Yusko, Chilliwack).
While British Columbians clearly want action to facilitate the reduction of greenhouse gas emissions, many are unaware of their own choices to reduce climate change impacts. They suggest that part of the government's leadership role should include providing detailed, accessible information on the choices available.
Witnesses identified a need for government to establish a comprehensive clearinghouse for all information to the effects of climate change on British Columbia and identify incentive programs currently in place for individuals and businesses. Currently, this information is not readily accessible as it is spread across government ministries, Crown agencies and the private sector.
Mirroring the government's ActNow BC initiative that informs British Columbians about healthier lifestyle choices, the Committee heard that a comprehensive strategy is needed to provide information on what businesses and individuals can do to change their behaviours to impact climate change. The Committee envisions the government developing a website that would include the following:
Here is a sample of the many submissions we received on this topic.
“It is important to invest in education with regards to the environment. We won't change our lifestyle without understanding why we must.” (Fraser Valley Conservancy).
“There would be a need for further education of the public on what they can do as individuals, or as organizations to be part of the solution. There is need for greater education of the relationship between particular actions and the impact on the generation of greenhouse gas.” (Janet Pattinson, Sorrento).
“I would spend money on education. If the population is not educated then it will not respond to any government incentives with respect to climate change.” (Claus Andrup, Maple Ridge).
“Fund education programs for children and adults to encourage energy-saving choices by the public.” (Marta Goodwin, Vancouver).
“Please provide more public education for awareness about the ways the average citizen can reduce greenhouse gases, especially pertaining to household waste, personal vehicles, heating/cooling.” (Holly Niebergal, Kelowna).
Another unsolicited theme we heard in our public hearings across the province, was that the government's emphasis on reducing greenhouse gas emissions should not overshadow other important environmental issues, such as air and water quality, parks, and conservation programs. For example:
The Finance Committee strongly endorses the government's goal of reducing greenhouse gases. However, we remind the government that environmental protection goes beyond the reduction of greenhouse gases: it must include provisions for safe drinking water, clean air, conservation officers, healthy lands, fish and wildlife, and recreational opportunities for all British Columbians. We provide some of the comments on the need for a broader environmental agenda below.
“The City of Prince George appreciates the funding that has been received in the past years for the wood stove exchange program, the Burn It Smart! information session, funding for the implementation committee and the research completed to date. …The City of Prince George, along with its partners in air quality improvement in the local Ministry of Environment are working to carry out the recommendations specific to the municipality but additional funding is necessary to complete these tasks.” (City of Prince George, Councillor Don Zurowski).
“Resources are very scarce. We all know that. The budget process has an ability to allocate resources, and they seem to be able to move resources around. We just want to keep the Committee aware that there are other health concerns out there that need to be considered while climate change is being put forward.” (Quesnel and District Chamber of Commerce).
“We are requesting that the Finance and Government Services Committee recommend that the provincial government undertake the following: review the proposed flood mitigation funding and recommend that it be substantially increased to meet the needs of our citizens, and make flood mitigation funds available over a shorter period of time and request the federal government provide matching funds.” (District of Maple Ridge, Mike Davies).
We also received several requests for the government to increase the Ministry's budget in order to make both significant improvements in park infrastructure and enhance conservation efforts.
Here are the submissions we received on this topic.
“Our expanded provincial parks system of 893 parks and protected areas needs an immediate infusion of funds in the amount of $30 million annually. This will provide the immediate care and attention necessary to restore ecological systems that function within parks and begin to create a management regime to manage our parks and protected areas, scientifically, to world class standards. This will ensure their long term health for the economic, environmental, and social benefit of current and future generations.” (Elders Council for Parks in British Columbia).
“We urge you to stand up for BC's parks and protected areas by supporting improved legislation and increased funding and staffing levels that will see our parks protected now and into the future.” (Western Canada Wilderness Committee).
“We recommend that adequate funds from the surplus be used to fulfil the government's promise to maintain the Forest Service recreation sites, roads and trail in the heartlands and adequately manage our fish and wildlife resources on a scientific basis. To accomplish the latter we recommend restoring Ministry of Environment staff and budgets to at least the pre-2002 levels.” (Kamloops and District Fish and Game Association).
“(We need) more conservation officers to look after the fish & wildlife values of this province. (8000 sq km is just too much for one CO). Have more people in the field making sure there is not a problem with the fish or wildlife.” (J. Douglas Peck, Sparwood).
The Committee believes that the Ministry of Environment must play a central role not only in addressing B.C.'s climate change goals, but also a much stronger role in wildlife conservation, regulatory enforcement, and parks management.
A significant number of on-line responses asked the provincial government to consider providing additional resources, in partnership with the federal government, for public transit options. We heard calls for specific rapid transit projects for B.C.'s urban centres, as well as requests for expanded bus transit services throughout the province.
A common refrain we heard was the need for the government to make resources available to accommodate a significant expansion of rapid transit in B.C.'s urban centres. We heard a strong desire for the government to provide additional resources to TransLink for the construction of the Evergreen Line, as well as resources to provide commuter rail to connect the West Shore communities to the City of Victoria . Our on-line consultations, in particular, highlighted several options for rapid transit in the growing communities south of the Fraser River, including Skytrain extensions, a light-rail system following Highway 1, and commuter rail along the old interurban tracks in the Fraser Valley.
Some of the specific suggestions the Committee received on this topic are highlighted below.
Evergreen Line
The Committee heard requests from the Tri-Cities region that a rapid transit system is a top priority. The public is asking all levels of government — local, regional, provincial, and federal — to come to the table to fund this crucial transportation infrastructure project.
While the majority of submissions on this topic favoured any form of light rail to Coquitlam Centre, we also heard several concerns from the affected communities that the proposed light rail option connecting to Lougheed Town Centre would not provide an effective alternative to the automobile in terms of travel times.
Here are some of the comments we heard on this topic.
“Transportation infrastructure for the northeast sector deserves the highest priority. It is an urgent need that a forward-thinking government recognizes this and deals with the problem. Now is the time to spend the money on the future sustainability of the fifth-largest, and growing, community in B.C. We are experiencing traffic gridlock today; by tomorrow we will be fundamentally inaccessible. We need a guaranteed investment in our future.” (Tri-Cities Chamber of Commerce).
“Finance rapid transit — not slow mass transit such as the Evergreen Line.” (Andrew Kirk, Port Moody).
“Build the upcoming Evergreen Line so that it is compatible with the Millenium Line and so that one does not need to change trains at the Lougheed station.” (George Kovacic, Burnaby).
Greater Victoria Commuter Rail
The Committee received requests from Vancouver Island residents for a commuter rail system linking ex-urban communities — such as Duncan and the Cowichan Valley — to cities on the West Shore and downtown Victoria. Respondents explained that communities north of Victoria are growing due to their affordability, but the commute to Victoria as a consequence has become congested and time-consuming. They suggested that current rail systems are targeted for tourists, and should be expanded for daily commuters. Here is a sample of what we heard.
“It still puzzles me why there is no commuter train from Duncan to Victoria. The track exists. Lease some vehicles, put some cheap platforms up and just do it.” (Mark Waddington, Victoria).
“Better transit systems in Greater Victoria – provide light rail transit from western communities as Trans Canada is choked with cars trying to get into city.” (Cheryl Thorpe, Victoria).
Fraser Valley Light Rail
We also received many requests from individuals and advocacy groups in the Fraser Valley for light rail transit services to and from their communities. Many explained that this would not only ease traffic congestion, but it would also support the government initiative to reduce greenhouse gas emissions. However, there was no clear consensus as to which route would be preferable. Some submissions suggested that the twinned Port Mann Bridge and Highway 1 widening should have a light rail component constructed from the outset; others proposed a commuter rail system using the old interurban rail corridor or an expanded SkyTrain option to service Surrey and Langley.
Some of the comments we heard on this topic are presented below.
“For Budget 2008, we propose the government immediately plan rapid implementation of a modern clean-air interurban passenger rail service for the Fraser Valley, connecting South-of-Fraser communities from Chilliwack to Surrey, with a target date for initial service by the end of 2009, and a plan to subsequently extend service over the Fraser River into Vancouver.” (Rail for the Valley).
“We need now, more than ever, rail-based transportation, bus rapid transit, bicycle-friendly cities and towns, and a growth-management strategy that's consistent with the B.C. government's stated environmental objectives. If the government is sincere in its desire — and I believe it is — then it's going to take a lot more than changing light bulbs.” (Fraser Valley Conservancy).
Bearing in mind the message that the government must continue to manage the debt-to-GDP ratio, we strongly urge the government to work closely with local communities, regional and federal governments, and the private sector to expedite the construction of much-needed rapid transit options in Metro Vancouver.
A recurring theme we heard was the need for increased bus transit, not only in Metro Vancouver and the Greater Victoria regions, but also in smaller communities throughout B.C. The calls for increased public transit come in conjunction with a growing sense of environmental consciousness, and an emerging desire for transportation alternatives in the province. Below are some of the comments we received.
“Provide municipalities more funding for transit - both capital & subsidized operations.” (Pat Leith, Ladysmith).
“We would really like to see a budget that follows through on some of the existing commitments on funding to public transit in the lower mainland and at the same time provides additional funding to develop and implement a transportation strategy for the province that puts B.C. on a path towards at least a 90-percent reduction in transportation-related greenhouse gasess by 2050.” (West Coast Environmental Law).
In addition to enhanced public transit options, many British Columbians — predominantly, but not exclusively from Metro Vancouver — advocated for enhanced cycling facilities. This infrastructure includes partnering with local and regional governments to expedite the construction of more bike lanes, bike racks, and designated cycling routes throughout and between B.C.'s communities. Some of the comments are presented below:
“We should improve bike lanes. For example, have bike lanes leading to all schools. This way, students can bike all the way to school and back home.” (Colleen and Gordie Howe Middle School, Abbotsford).
“Unfortunately for cyclists in Vancouver , there are few facilities for the increasing numbers of us. The government should definitely be encouraging this healthy lifestyle choice by offering us more bike racks (there are currently hardly any!), better bike routes, and European style segregated bike paths. More car-free areas of the city create a more vibrant street life also enhancing commercial activity.” (Patricia Klein, Vancouver).
There were also calls for the government to lead by example and showcase what is possible by adopting green building standards for public buildings. For example, we received a submission from the B.C. School Trustees Association illustrating the cost energy savings that can accrue by retrofitting public buildings to use geothermal heating rather than traditional natural gas. We also heard several submissions from university student unions calling for the government to adopt stringent green building standards and provide resources to upgrade existing buildings.
Here is what they had to say.
“As you will be aware the Ministry of Education is working on several initiatives in a climate action plan and we would encourage you to support their efforts such as targeted tax reductions to assist with infrastructure upgrades and greenhouse gas emission reductions. An example of the latter is refitting schools with geo- thermal systems which realized in one case of a large school an annual reduction in natural gas costs from $12,000 to less than $100. Eliminating or reducing provincial tax on all kinds of green building initiatives (including geothermal plants and energy efficient lighting, etc) would be helpful.” (British Columbia School Trustees Association).
“We request that the B.C. government adopt official policy on green building standards for all new public buildings, subject all public buildings to an energy audit and adopt long-term policy for regular scheduled upgrades of efficiency standards to ultimately achieve carbon neutrality in all public buildings, including colleges and universities. This is a really exciting thing. At my institution, UBC Okanagan, by 2010 we will be 100 percent emission-free — and that's actually thanks to all of your help — except for the cars that will be driving onto campus.” (University of British Columbia Students Union – Okanagan Campus).
Another general area of interest that emerged from our various forms of consultation was for the government to consider amending the B.C. building code to require all new buildings to meet standards in the Leadership in Energy and Environmental Design (LEED), subject to adaptation to the various climate regions in the province. The LEED standards consider the categories of sustainable sites, water efficiency, energy and atmosphere, materials and resources, and indoor environmental quality. Other requests included tax breaks for LEED-certified buildings, and rebate programs for energy-efficient buildings. Below are some of the comments we received on this topic.
“We're recommending that the government use Property Transfer Tax revenue to provide a rebate to a buyer of a commercial building that meets or exceeds the Leadership in Energy and Environmental Design, or LEED, green building rating system certification levels. LEED certification is achieved through a point rating system with categories certified silver, gold or platinum. The rebate program we recommend is similar to the residential program, except the rebate amounts are proportionally higher. We recommend the government provide a PST rebate to renovators of existing commercial buildings, making their commercial buildings more energy-efficient and environmentally friendly according to the LEED system.” (Real Estate Board of Greater Vancouver).
“Residential and business buildings that are built to the highest LEED standards should be so strongly rewarded, in terms of their tax treatment, and low-efficiency structures (buildings, planned subdivisions) so strongly penalized, that soon no-one will build anything which is not certified at the highest LEED standards.” (N. Jay Zimmerman, Bowen Island).
The Committee recommends that the government:
Question 2: The Province currently provides tax incentives to encourage the purchase of hybrid vehicles, the production of wind power and the use of bio-fuel. What tax changes would you make to encourage environmentally responsible choices?
Throughout our consultation process, we heard numerous suggestions on tax changes that the government may consider implementing to reduce greenhouse gas emissions in British Columbia. Primarily, we heard that the government should:
It is this Committee's opinion that government should choose incentives over penalties to promote environmentally-responsible choices, particularly where incentives will bring a similar result.
In this section, we also review proposals we heard for the government to enhance research and development into alternative energy sources, as well as calls for a provincial tax credit for public transit passes. We also examine some of the comments we received concerning the province's hybrid vehicle rebate program.
Advocacy organizations for sustainable energy presented submissions requesting the government introduce incentives for British Columbians to improve the energy efficiency of their homes. We also received numerous written and online submissions from individuals who recommended the province find ways to reduce expenditures on home energy retrofits. In most of these submissions, we observed a desire for tax credits, grants or rebates to promote the use of clean energy, such a solar or geothermal. Below are some of the comments we heard on this topic.
“Fundamentally, the problem is that if I want to lay out $5,000 to invest in making my home more efficient, I would love to have that as a tax credit, or I'd love to be able to access a loan fund where I can draw on the loan and have the cost of the loan repayments taken off my hydro bills or my gas bills. So we're looking at income tax credits for expenditures on retrofits and on green heating systems, such as heat pumps, solar hot water systems.” (B.C. Sustainable Energy Association).
“I get calls daily from our clients, who are seriously interested in making retrofits to their houses to improve our environmental situation and lower greenhouse gases. By the time I am perfectly frank with them on what they can expect back from the government, many times it's not enough for them to take the step to make the necessary upgrades to their homes.” (AmeriSpec).
We recommend the government reinvest revenue from the property transfer tax to provide a rebate to buyers of homes that meet or exceed the Canadian Home Builders Association's Built Green B.C. program standards. A buyer of a Built Green B.C. bronze-level home would receive a $2,500 rebate on the PTT program, $3,500 for a silver-level home, $5,000 for a gold-level home, and a $7,000 rebate for a platinum-level home. (Real Estate Board of Greater Vancouver; Canadian Home Builders Association of British Columbia).
Again this year, the Committee heard submissions from agricultural sector representatives who spoke of a need for the government to invest in promoting British Columbia 's agricultural products in order to encourage healthier lifestyles and support local food production. In addition, we also received submissions from environmental and citizens organizations, as well as individuals, requesting that government provide more incentives for small scale agriculture and the sale of locally-produced food around the province. A key theme in these submissions was a desire to reduce the distance food travels from the farm to the consumer's plate.
Here are some of the comments we received on the topic.
“In this morning's paper there was an ad for ActNow BC encouraging people to eat nutritious food. I thought it was an outstanding ad. One component, I think, was missing. It didn't say: Buy B.C. produce... We're promoting the nutrition but not promoting buying local B.C. fruit.” (Domenic Rampone, Kelowna).
“ Consumers are asking serious questions about how food is produced, processed and distributed. There's an increasing realization that the production and consumption of food leads to global warming. We're seeing the rapid emergence of and support for local and regional farmers' markets, good-food boxes, collective kitchens, community gardens, field-to-table festivals, nutritious meals for children and youth, fairly traded products such as coffee and chocolate and, of course, the hundred-mile diet. In short, an alternative to the global industrial food system is growing.” (Council of Canadians – Kamloops Chapter).
“Encourage buying locally produced food at fair value. Sustainable farming has much to offer health wise to consumers and the planet. As a small farmer it's frustrating having to compete with mass produced, cheap quality, transported products.” (Diane Dunaway, Williams Lake).
Representatives from B.C.'s agricultural organizations appeared before the Committee to suggest several additional program and policy changes to bolster domestic agricultural production. We heard requests from witnesses in both Kelowna and Dawson Creek that B.C. must take full advantage of federal funding available under the federal-provincial agricultural policy framework and the Canada-British Columbia Environmental Farm Plan. In both cases, the federal government contributes $1.50 for every dollar contributed by the province for program development.
Witnesses explained that the potential benefits of increased provincial support for these programs are significant. The agricultural policy framework has focused on building a competitive and innovative sector, effective risk management, and increasing contributions to society's priorities. Similarly, the Committee learned that relatively small investments in the cost-sharing arrangement under the Environmental Farm Plan permitted regional districts to purchase ‘stump grinders' to reduce the burning of wood removed from orchards — thus reducing the release of particulate matter into the atmosphere. Here is what we heard on these programs.
“We recommend that the provincial government ensure the budget for the Ministry of Agriculture and Lands has adequate funding to provide for full participation in the next round of the federal-provincial Agriculture Policy Framework – Growing Forward to ensure B.C. receives the full benefit of federal programming initiatives that will be available.” (B.C. Grain Producer's Association).
“The Environmental Farm Plan program has encouraged significant improvements in environmental conservation on participating farms. Uptake of this program is strong and continues to grow. The EFP program provides leverage of almost 9 to 1 for the province's contribution to environmental improvement. This is a very high return on investment, and it is investment worth making in the environment.” (British Columbia Fruit Growers Association).
We also heard from the B.C. Food Processors Association who identified a need for an industry-led centre for technology and product development, and providing research and other services to strengthen and expand the capacity of British Columbia 's food processors and bio-products producers to develop new products and processes. The witnesses noted that the provinces of Ontario, Manitoba, and Alberta have already developed such facilities and made a similar request.
“Our study indicates that there is emphatic industry support for this technology development centre. Furthermore, in addition to there is a strong demand for business consulting services, with energy management near the top of the demand list. Accordingly, the BC Food and Bio-Products Technology Development Center will become a long-term energy efficiency mechanism for the food processing and bio-products industries.” (B.C. Food Processors Association).
An additional issue raised by representatives within the agricultural sector was that the new meat inspection regulation requiring a licensed abattoir to process all meat was creating hardships to owners of ranches in terms of additional transportation costs and losses of farm gate sales. While the Committee acknowledges that government has contributed significantly to increasing abattoir capacity, we heard some concerns that the new regulations were having a negative impact on some small producers. Below is a sample of what we heard.
Increase funding for the transition process to licensed abattoirs. Some areas of the province have none. For example, the one in Kelowna has closed down, and there's nothing available. If a local farmer has one cow that he needs to slaughter, he has to transport it to Falkland or Salmon Arm. (Dominic Rampone, Kelowna).
I want to bring to your attention is a meat transition assistance program. We have worked like dogs to get as many applications in hand for the implementation of a meat inspection regulation on September 30. I'm pleased to report that we have some 66 applications in the pipe. They're not all built. Cabinet has given us a little bit of leeway with the change in the order-in-council that gives us some leeway. (B.C. Food Processors Association).
Representatives from the biodiesel and ethanol production sector appeared before the Committee to discuss the resources required to meet the government's commitment to a 5 percent average renewable fuel standard for diesel by 2010 to help reduce emissions and advance the domestic renewable fuel industry. In particular, the B.C. Biodiesel Association, supported by a presentation from the B.C. Grain Producer's Association, requested that the government consider four policy changes to permit the wide-spread adoption of biofuels in British Columbia. These include:
Of particular concern was the industry's need for distribution infrastructure, such as tanks and in-line blending facilities, to ensure price competitiveness and to ensure product availability. The industry came to the Committee with a request for a competitive grant program with a funding amount of $2 million, to be matched by industry.
Below are the some of the specific comments we heard on this topics:
“Biodiesel adoption requires distribution infrastructure such as tanks and in-line blending facilities. This infrastructure will add greatly to the viability of a biodiesel market of the scope envisioned in the British Columbia Energy Plan's biofuels target, ensuring price competitiveness to diesel and product availability to enable adoption in government, industrial and commercial fleets. A competitive grant program with a funding amount of $2,000,000, matched by industry, would benefit BC's entire biodiesel industry.” (Canadian Bioenergy Corporation).
“Remove the tax on biodiesel that is dyed. Also provide grants to distributors for expensive equipment to dye biodiesel, or make it easier for biodiesel distributors to get the dying authority from the fuel taxation branch.” (Agri-Green Biodiesel Inc).
However, some concerned individuals made submissions expressing reservations regarding the subsidization of biofuels. These submissions questioned whether the energy required in the production of biofuels negated their environmental benefits, while others expressed concerns about using agricultural lands for energy production. Their comments include:
“Biofuel is actually worse for the environment than fossil fuel in terms of energy in to get energy out. This should not be a tax advantage.” (Jackie Buston, Saanichton)
“Biofuels seem unlikely to be able to sustain energy usage anything like that which we are used to and attempting to use them to do so is highly likely to have severe consequences for our environment and our food supply.” (David Steele, Vancouver).
The Committee believes that before choices are made by government on how to reduce greenhouse gases, they must be thoroughly researched and peer-reviewed by the appropriate experts to ensure net benefits. The Committee also stresses the need to focus on fostering a B.C. biodiesel production industry with incentives that allow fair competition with the United States and Alberta.
The Committee received an interesting submission from the B.C. Trucking Association that includes possible approaches the government and the trucking industry may adopt to reduce greenhouse gases both within the long haul and local trucking sectors.
With respect to the long-haul sector, the industry association advocated for both the federal and provincial governments to provide financial incentives — ranging from grants or rebates to no interest loans or tax credits — to encourage the adoption of the EnviroTruck Program. To meet the EnviroTruck standard, trucks would require:
According to the B.C. Trucking Association's calculations, a highway tractor-trailer deploying a full package of fuel saving devices can reduce fuel consumption by 25 to 30 percent and reduce greenhouse gas emissions by up to 50 tonnes per year.
The B.C. Trucking Association made four recommendations concerning the EnviroTruck program, including rebates on the purchase of new vehicles; sales tax exemptions for trucks with 2007 or newer engines as well as for proven, qualified fuel efficiency equipment; waiving vehicle licensing fees for the first year on 2007 or newer trucks; and for the government to guarantee low-cost or no-cost loans to companies and owner-operators to purchase 2007 or newer trucks in partnership with banks and credit unions. Similar proposals were also put forward by the B.C. Road Builders and Heavy Construction Association.
“The (trucking) industry is ready, willing and able to help the provincial government achieve the environmental objectives set out in the 2007 Speech to the Throne. A quicker fleet turnover and decrease in the average age of the provincial fleet, in combination with increased use of fuel-saving technologies and strategies will benefit all British Columbians.” (B.C. Trucking Association).
“It must be acknowledged though that environmentally friendly replacement equipment in our industry is extremely expensive. We urge the Government of B.C. to assist the heavy construction industry in acquiring new equipment that incorporates innovative greenhouse gas reduction technology.” (B.C. Road Builders and Heavy Construction Association).
A common irritant that the public identified in both written and on-line submissions concerned the excessive packaging of consumer products. Specifically, we heard requests for the government to consider providing incentives to encourage businesses to adopt biodegradable packaging. We also received several submissions calling on the government to implement a tax on plastic bags. Here is a sample of the submissions we received.
“We should require the reduction or elimination of wasteful packaging and require companies to take back and recycle their waste.” (Maryann Emery and Rob Wilson, Golden).
“I would also like to see the province offer tax incentives to encourage businesses and manufacturers to reduce packag ing. There is too much packag ing, and it results in too much garbage.” (Tara Owens, Victoria).
“A broadening of the current policy of deposits on containers to encourage recycling or safe disposal would be useful. Ideally, all containers used by consumers should be recyclable. At the same time, incentives to industry to reduce packag ing from its current levels must be applied.” (Robert Sibbald, Chilliwack).
“The food industry and consumer packag ing industry could be given incentives and/ or laws to produce biodegradable packag ing, and packag ing that uses less or no oil for production. The plastic waste is staggering!” (Henry Warner, Coldstream).
A recurring message in many of the submissions received by the Committee was the request for the government to create more incentives for the production of and research into sources of clean, renewable energy. In particular, we heard a strong demand for the government to expand funds available through the Innovative Clean Energy Fund, or some similar program, to develop alternative sources of energy such as wind, solar, and tidal power.
“We live in the Saudi Arabia of green energy solutions. We have abundant water and wind resources that are not being harvested, and we can do it in the most environmentally benign way. We have some of the world's best and brightest engineers and construction firms right here that have that ability.” (Plutonic Power Corp.).
“Provide tax incentives and research dollars to support the development and implementation of small scale green energy projects. For example, it may not make sense to implement solar energy on a large scale but what about supporting it on a house by house scale. If every new house created enough solar energy to reduce BC Hydro consumption by 1/3 this would make a difference over time.” (Mary Miller, Surrey).
The Committee received numerous online submissions from individuals in the lower mainland who suggested the province offer a tax credit to partially offset the cost of public transit passes. Many of these submissions suggested the provincial government match the federal government's tax credit for users of public transit. We also heard requests from post-secondary student organizations that requested the government implement incentives to promote student public transit use.
Some of the comments we heard include:
“Students on a fixed income often depend on public transit to get to school. Time after time students tell me that the cost of transit is just too high and ask me why university students have a universal transit pass and pay almost a third of what college students currently pay…We recommend that a system of initiatives, including service expansion and fare reductions, be put in place to encourage and expand the use of public transit and curb reliance on personal automobiles.” (Students Union of Vancouver Community College).
“Providing people with real transportation alternatives to the automobile means developing a transit system that's more extensive, more efficient and more accessible than what's currently available…We recommend incentives such as fare reduction for students using public transit, and this would include increased funding to make the U-pass available to students across the lower mainland.” (Emily Carr Students' Union).
A recurring theme in the submissions, particularly those submissions made online, was that the government should do more to promote energy-efficient vehicles. Larger tax credits, rebates and even the elimination of taxes for hybrid and electric vehicles were ideas presented by many. Conversely, a number of online submissions expressed concern about the environmental impact of the batteries used in hybrid and electric cars. This debate is highlighted in some of the suggestions provided below:
“I think that any way that we can promote the use, acceptance or deployment of hybrid or electric vehicles is a step forward in meeting the huge challenge presented by global warming and our dependency on the finite resource of crude oil. To promote the use of hybrid and electric cars would it be viable to offer green incentives such as eliminating or reducing the GST and or PST on the purchase of these vehicles or by offering a small reduction in insurance costs?” (David Eadie, Mission).
“The support for hybrid cars alone is small thinking. Recycling the hybrid car battery every five years and the cost to replace it is not environmentally sound in my view.” (Eric Moeller, Gabriola Island).
“Tax should be exempt from all hybrid vehicles to make them cost less than standard vehicles. The incentives are not enough. They have to be substantive.” (Herm Rudzow, North Vancouver).
The Committee recommends that the government:
Question 3: What tax changes would you make to discourage British Columbians from activities that contribute to greenhouse gas emissions?
The Finance Committee received close to 500 on-line submissions asking the government to introduce some form of carbon tax. In addition, we received approximately 250 additional on-line submissions — primarily from urban residents — calling on the government to increase fuel taxes to offset increased expenditures for rapid transit. Conversely, we received fewer submissions in support of the cap-and-trade model to reduce emissions.
However, we also observed a clear frustration from numerous respondents living outside the lower mainland and southern Vancouver Island that additional revenues collected from gas taxes and surtaxes on so-called luxury vehicles would unfairly penalize those living in rural or remote communities without access to public transit and where travelling great distances for work, services, or pleasure is the norm.
As a Committee, we urge the government to choose the carrot over the stick and use tax penalties only when positive incentives have failed to alter behaviour in a significant manner.
Nonetheless, the Minister of Finance has indicated that all options — including increased taxes and possible tax shifting are “on the table” for discussion. To this end, we reviewed the comments the committee received on various tax changes to discourage British Columbians from activities that contribute to greenhouse gases.
The Finance Committee received numerous submissions calling for the creation of a carbon tax, or what some environmental organizations refer to as a “climate change levy.” Those in favour of a carbon tax noted its potential to affect people's choices in the marketplace. Advocates for this position argue that, over time, both business and consumers will respond to the rising prices of carbon-intensive goods and services by increasing their demand for innovative, environmentally friendly alternatives. Requests for a carbon tax ranged from under $30 to $50 per tonne of CO2, with the rate increasing over time.
Many of these submissions expressed support for a revenue-neutral carbon tax, where increased revenues from a carbon tax would be offset by lowering other taxes, such as income tax. Other submissions in favour of a carbon tax suggested that revenues be directed towards public transit or alternative energy projects. Here is some of the support we heard.
“A well-designed, revenue-neutral carbon tax, introduced at a low level and explicitly scheduled to rise over time, provides the best incentive to start making adjustments in our lifestyle choices now. It also provides a strong and reliable signal to B.C. businesses and entrepreneurs that there is a whole range of economic opportunities expanding or being created.” (Sierra Club of Canada, BC Chapter).
“The main criticism against the carbon tax is that it is a political non-starter because no one is willing to vote for more taxes. This is a red herring. In a revenue-neutral carbon tax, where increased revenues brought in by the carbon tax are offset by tax cuts and rebates in corporate and personal income taxes, the average British Columbian will not be any worse off in terms of their income.” (Voters Taking Action on Climate Change).
“I believe phasing in a carbon tax will give people both a monetary incentive and the time to change their lifestyle. With the foreknowledge that carbon-intensive activities will continue to become more expensive, businesses and individuals will become adequately motivated to make greener choices.” (Justin Tilson, Vancouver).
However, several people expressed concerns about the creation of a carbon tax. A common request was to provide viable alternatives to carbon-intensive activities and products, especially in the area of public transportation, before creating penalties. Some submissions also indicated that punitive measures are unlikely to change behaviour and recommended the province focus on incentives and education.
Another concern raised in the submissions was the issues of equity and fairness of a carbon tax. The committee heard that if a carbon tax is applied across the board, there would be a negative impact on particular groups, such as low-income earners, rural British Columbians and those without access to public transportation. This might be avoided with some form of tax shifting. Below are some of the concerns we heard.
“By themselves many green taxes would have a regressive distributional impact. Green taxes should move forward, but they need to be offset by income transfers to the least well-off, public spending on transit, etc, in order to heed off a regressive impact. Just as progressive taxation is based on the ability to pay, so should the climate change plan.” (Canadian Centre for Policy Alternatives).
“Using taxes as penalties, in our view, requires considerably more discussions as new environmental standards are established that potentially put some industries and their workers and families at risk.” (Richmond Chamber of Commerce).
“People need alternatives before they are punished for their lifestyles. Once there are greener choices available then start thinking about discouraging bad habits.” (Andy Notman, Chilliwack).
A model to address greenhouse gases, put forward in some of the submissions received by the Committee, was for the government to create a clearinghouse for carbon credits for both individuals and small business or join existing national and international trading programs. Under the cap-and-trade model, the province would set a hard cap on greenhouse gas emissions, and then and issue tradeable allowances that grant businesses the right to emit a set amount. Businesses able to reduce their greenhouse gas emissions allocated under the cap would then be able to sell their extra allowances to businesses in which technological upgrades would be too costly or too disruptive. The cap-and-trade model has widespread support from other jurisdictions and is currently being considered in British Columbia . Below are some of the suggestions we received on this topic:
“ British Columbia should facilitate and promote a provincially-based carbon offset program that individuals can use to offset their emissions, and offset B.C. government emissions through the program. It should put in place a cap and trade system for industry and for municipalities in coordination with California and/or other provinces or states.” (Dr. Lynda Gagné, Victoria).
“I support the marketability of carbon trading to let “market forces” reduce greenhouse gas production.” (Eve Layman Kelowna).
Committee members believe that British Columbia should become the North American leader in promoting the cap-and-trade model to reduce greenhouse gas emissions. We encourage the government to not only to be a participant in the project, but to take steps to develop the expertise to be home to an international clearinghouse for carbon trading.
In addition to responses on a general carbon tax, we received numerous submissions focused on increasing the provincial fuel tax. Submissions on this topic ranged from those in support of significantly raising fuel taxes, to those strongly against any increases in taxation. While submissions both for and against higher gas taxes were distributed across the province, the vast majority of submissions calling for a gas tax hike originated from Metro Vancouver. Conversely, many submissions from the interior of the province indicated that the government should not increase the gas taxes. This debate highlights the difficulty this Committee has in proposing a simple “one size fits all” recommendation to government:
“Raise gas taxes and increase spending on rapid transit.” (James Bjerring, Vancouver).
“Higher fuel taxes with the increased revenue going to subsidize greener forms or transportation and other green initiatives.” (Stephen Drozdik, Vancouver).
“It would not be fair to tax people in areas of B.C. where SUVs and trucks are the safer mode of transportation in the winter as the roads are often treacherous.” (Donna Jarvis, Lone Butte).
“We need lower taxes, not more on every pretext. I can appreciate urban areas needing to reduce traffic, but why are government programs always so punitive on those of us who live beyond Hope? Reduce fuel taxes for us in the north where public transit is not an option.” (Peter Guenther, Vanderhoof).
Another recurring theme that emerged was for increased levies or feebates applicable on fuel-inefficient vehicles. The feebate policy would set an engine efficiency level at a certain number of litres per hundred kilometers, charging a penalty for each litre above the efficiency standard and providing a rebate for every litre below the efficiency standard.
We received some submissions that indicated that all non fuel-efficient vehicles should be charged an environmental levy on purchase. However, we also received several submissions from rural British Columbia indicating that additional levies and taxes on work vehicles would place an added cost burden for needed vehicles.
“There should be substantial taxes on inefficient vehicles. Money from those taxes should go directly to subsidize the costs of purchasing more efficient vehicles.” (Dory Sheldan, Vancouver).
The Committee recommends the government:
Question 4: Public health care is an important priority but growing costs and demand are a challenge. Since 2001, health care spending has increased 49 percent, from $8.8 billion to $13.1 billion. As a share of government ministry spending, health costs continue to crowd out other spending options. It increased from 28 percent of the budget in 1985, to 34 percent in 1995, and now stands at more than 44 percent.
What budget choices would you make to sustain health care while balancing the need to invest in other areas like education and community programs?
The fourth question contained in this year's budget consultation questionnaire asked British Columbians to put forward their suggestions for how to make the health care system sustainable for future generations.
The Committee was surprised and concerned by how few recommendations the public made on this topic. Many of the submissions we received suggested simply spending more money, leaving the impression that the general public may believe their collective capacity to pay taxes to continue increasing the health care budget is unlimited.
Nonetheless, some good ideas emerged, such as calls for the government to promote healthy living; increased taxation on unhealthy products; an expanded role for primary care and home care services to reduce demand for acute and complex care; user fees for health care services; and calls for a greater role for the private sector. Issues pertaining to mental health programs are also presented.
A recurring theme was the need to promote healthier lifestyles and the committee readily acknowledges this is a sustainability issue. We received several submissions supportive of the government's ActNow BC campaign as a means to promote physical activity and healthy eating. Many submissions encouraged the government to consider further expansion of programs such as the School Fruit and Vegetable Snack Program and other programs to make B.C. schools centres for healthy living and behavioural change. Here are some of the comments we received:
“I can see no better image than our young people in our schools crunching on an apple, a cucumber, a tomato that's grown in B.C. It's promoting B.C. product. It's educating a new generation of healthy eaters and supporters of what B.C. has to offer.” (Joe Sardinha, British Columbia Fruit Growers' Association).
“We need to empower children between K and 12 with some basic health information and really get them motivated as empowered health care consumers.” (British Columbia College of Chiropractors and British Columbia Chiropractic Association).
Building upon this theme, we received many submissions proposing tax incentives to encourage physical activity and healthy eating habits. In particular, witnesses suggested tax credits for fitness programs, gym memberships, and sports, as well as removing taxes on healthy foods such as fruits and vegetables. These are some of the suggestions we heard:
“The implementation of a provincial children's fitness tax credit and a national adult fitness tax credit will support cross-ministry initiatives associated with ActNow B.C. while supporting B.C.'s mission of leading the way in North America in healthy living and physical fitness.” (Fitness Industry Council of Canada).
“Believe it or not, health care is also a major issue for our chamber members in order to attract and retain people in the north. …A little tax incentive or some form of incentive to get businesses to take that health program is good prevention. We believe that will help reduce, in the long term, some of our health care budget.” (Prince George Chamber of Commerce).
“The federal tax write-off of kids' activities should be increased and extended to adults.” (Trevor Kinley, Invermere).
A related theme identified by witnesses was increased taxation of unhealthy products. Many on-line submissions specified that the government should consider significant taxation on “junk foods,” tobacco and alcohol products as a behavioral disincentive.
For example, in a written submission to the Committee, the British Columbia Healthy Living Alliance suggested to the Committee that the government consider “decreasing the appeal of unhealthy foods by increasing their cost through tax disincentives and regulating advertising to children.” That organization also advised the Committee that government should increase the tobacco tax in order to offset the costs of nicotine-cessation initiatives. The message was also repeated often in the on-line submissions the Committee received.
The following are typical of submissions received on this topic.
“The province has already developed excellent "Guidelines for Food and Beverage Sales in B.C. Schools" that outline the types of foods that are "not recommended" due to their low nutritional value and high calorie content. We recommend that the Government use the existing "Guidelines for Food and Beverage Sales in B.C. Schools" as criteria for determining the types of food that are taxed.” (British Columbia Healthy Living Alliance).
“We urge the Committee to recommend to government that it increase tobacco taxes, and close the roll-your-own tobacco tax loophole. Higher tobacco taxes are an extremely effective way to reduce smoking, especially among youth who are particularly price-sensitive.” (Canadian Cancer Society, B.C. and Yukon Division).
“Add a junk food tax to create more funds that could directly be put into health care.” (Dermot Hikisch, Telkwa).
The Committee also received an informative presentation from the Provincial Health Officer, Dr. Perry Kendall and the head of the Centre for Addictions Research of B.C., Dr. Tim Stockwell. Their presentation noted that alcohol abuse costs British Columbia $2.2 billion per year, and results in 1,200 premature deaths and 25,000 hospitalisations per year.
Of particular concern to the witnesses was the fact that British Columbia 's current taxation policies on beverage alcohol provide preferential treatment to higher alcohol content products. The witnesses believed that the government should revise the current alcohol taxation policy to encourage the consumption of lower alcohol content drinks. To ensure that the change is revenue neutral, products with higher alcohol content would be taxed at a higher rate. The witnesses also suggested that the taxation levels should be linked to the consumer price index.
The witnesses also referenced a successful Australian program in which a “nickel-a-drink” harm reduction levy was used to fund new addiction treatment and prevention programs. Based on 2005/06 sales volume, such a levy would raise an additional $88 million per year. A similar program is already in place in Quebec .
The witnesses' overall message is presented below:
A fundamental suggestion is that tax rates should take account of the health, social and economic costs of the product. This is no ordinary product. We know that even heavy use and particularly related harms at the population level are strongly influenced by price. The main thrust of my point today is that the way alcohol is priced through the liquor stores actually gives more incentives for people to choose higher alcohol-content drinks than lower alcohol-content drinks. (Centre for Addictions Research of B.C.).
Another common theme the Committee heard pertaining to the sustainability of the health care system was the need for innovation to permit other health care professionals to work in a multi-disciplinary approach to primary care. For example, we heard calls to develop a funding mechanism to permit physicians, pharmacists, registered nurses, dieticians and physiotherapists to work together under one roof to enhance patient care and reduce the demand for emergency visits and for acute care.
Submissions to the Committee suggested that the role and number of primary care clinics should be expanded to provide faster and more responsive service, while decreasing demands on emergency rooms. Here are some of the comments we heard.
“Primary care is where we need to meet most of the challenges of our aging population head on, and we're not really structured yet to do this properly. As a primary care physician myself, I am continually frustrated by an inability to incorporate other health care professionals within my practice. There are simply no mechanisms set up as yet to fund or pay these professionals to work with my patients and me, despite really good evidence that it works.” (British Columbia Medical Association).
“Develop health care clinics with doctors, nurses, specialists and or health care workers working in groups together to solve health problems where patients are encouraged to exercise, to quit smoking, to stop drinking excessively, to lead healthy life styles, to maintain a healthy weight and to eat healthy food.” (Muriel Walton, Castlegar).
A common theme heard in our on-line submissions was the need for additional physicians and nurses practicing in communities outside the lower mainland. We received several submissions indicating that physicians and nurses are much more likely to settle in the communities in which they receive their training. Below are some of the comments we received on this topic.
“An example relevant to the community that we find ourselves in today — the medical school expansion in Kelowna . Eight years ago this was just a good idea. Today the buildings have been constructed, the programs are in place, and only days ago we marked the full doubling of the first-year medical class, to 256 students. Now we look forward to the next phase of that initiative.” (University Presidents Council).
“The northern medical program (encourages) doctors who get trained in areas tend to stay. The 70-70 figure is that 70 percent of doctors practise within 70 kilometres of where they are trained.” (University of Northern British Columbia Faculty Association).
While the Committee commends the government for dramatically increasing the number of health care professionals being trained in British Columbia , we believe that it is our role to hold the government accountable to its commitment to expand physician training spaces at the University of British Columbia – Okanagan campus. It is also the Committee's opinion that the government ought to enable B.C.'s colleges to graduate additional nurses in places like Smithers, Cranbrook, and Williams Lake.
We received submissions from many health care workers and residents in support of enhanced home care for seniors. Several people indicated that home support is far less expensive than 24-hour support in seniors' complex care facilities. Health care workers pointed out that increased home support would help seniors to lead healthier, more independent lives, and therefore alleviate pressures on acute care and complex care systems. The suggestion is that British Columbia use home care as a strategy to reduce the time seniors spend in acute health care facilities and delay their entry into complex care facilities. Below are some of the comments we heard on this topic.
“Home care for seniors can reduce costs to our hospital system by reducing both illnesses and injuries.” (Steve Cooley, Vanderhoof).
“For example, the use of home care aids for seniors and people with disabilities is essential to basic health care.” (Leslie Benisz, Vancouver).
“Increase home care options for the elderly.” (John-David Gray, Langley).
We received close to 200 submissions advocating nominal user fees to be charged for health care services. These submissions indicated that user fees will help discourage abuse of the system, generate revenue to pay for health care and show health care consumers the cost of their interaction with the system. However, we also heard concerns about the impact of fees on low income residents, particularly seniors.
“Impose a small user fee for visits to family physicians and also a small fee for every days stay in the hospital. Maybe also introduce a means test so that the needy people are not penalized.” (John Hira, Langley).
“Charge a minimal user fee for each doctor appointment to discourage frivolous use of the health care system. Fees are refundable at income tax filing if the appointments are made for particular criteria (i.e. pregnancy, post child-birth, or a long-term illness) and the appointments are approved and verified by the attending doctor.” (Dan and Joanne Loan, Coquitlam).
“I would like to see a user fee initiated for hospital and clinic visits based on income. I believe that this would help discourage wasteful use of our health care system. For example, children and seniors would be free of a user charge and working adults would pay based on their previous years' tax bracket. I would not mind paying 50 dollars to go the clinic for a check up as I believe it would prevent others from going to the hospital or clinic for no reason.” (Nolan Steinwand, Fort St. John).
We also received submissions asking for an expanded private sector role for the delivery of health care services. A number of individuals and organizations suggested that private health care providers could ease pressure on the public system. However some witnesses expressed concern about the impact on low-income residents, while others doubted the benefits of private health care providers. This debate is highlighted in the sample of responses provided below.
“Our governments should consider opening the health care system to more competition, particularly for our centrally planned hospitals. The Board of Trade believes that experimentation with fee-for-service within the context of a publicly funded system and alternative models of service delivery could result in performance improvements and yield cost savings. Canada is the only developed country where the private sector is not involved as an alternative or in conjunction with the public system.” (Vancouver Board of Trade).
“Perhaps not a budget item, but the federal government needs to be pressured to amend the Canada Health Act to allow for private delivery of publicly funded health care and to permit citizens to buy personal health care insurance. We already have a multi-tiered health care system. It's about time we stopped denying it. B.C. could be a leader on this.” (John Newell, Halfmoon Bay).
“I believe that health care can best be funded by putting more private sector dollars into the system. (Stew Daroux, Cranbrook).
“Maintain the public system, discourage or eliminate the private system.” (Chris Joseph, Squamish).
As in previous years, several organizations and individuals presenting to the Committee requested increased support for mental health services. Witnesses suggested that the lack of mental health services contribute to higher health care costs and add to homelessness in urban areas. Here is a sample of what the Committee heard.
“The estimated annual cost of a mental illness for the Canadian business community is about $10 billion in lost productive time and other associated costs. Some 86 percent of the hospital admissions for mental illness don't happen in a mental health facility. They happen in just your local hospital, which means beds that you would have thought would be treating other kinds of illnesses are being tied up by mental health clients.” (Canadian Mental Health Association – Kamloops Division).
“Mental health is also a huge but overlooked factor in the ills of our society. We spend vast sums on physical health, but relatively little on mental health. Instead, the mentally ill are left to roam the streets and either be victimized or victimize others through crime. They turn to drugs because they have low self-esteem or addictive personalities or have been abused. It is the criminal justice system that ends up trying to clean up the mess - with little effect, because criminalizing the mentally ill does not solve their, or our, problems. (Melody Postle, Maple Ridge).
The Committee recommends that the government:
Question 5: Last year, Balanced Budget 2007 provided an additional $476 million over four years towards housing supports for everyone from the homeless to homeowners. Are there other housing initiatives you would like us to consider?
We observed strong differences of opinion concerning the government's investments in housing supports in the 2007 budget. We received many submissions calling for expanded social housing options and increased options to address homelessness — particularly in urban centres. However, we also received many submissions stating that the current level of investment in social housing programs is more than sufficient and that the private sector should provide affordable housing.
The Committee notes that during the consultation process, the government made commitments to provide $25 million to expand the hours of operations of homeless shelters and to expand the rental supplements pilot program. While these additional resources will go a long way to reducing some of the critical shortages in the housing area, the Committee believes that there are additional creative ways in which the government can increase the availability of affordable social housing.
A common area of concern raised in responses to Question 5 was that the government's investments in social housing do not appear to be making a dent in the availability of affordable housing stock or the ongoing issue of homelessness. A significant proportion suggested that the government should make greater investments in social housing. Conversely, the Committee also received many on-line submissions calling for the government to reduce spending on public housing because results of this expenditure were not apparent.
Here is an example of what we heard:
“Homelessness and housing affordability must remain a top issue. The market fails to build sufficient affordable housing for low- and middle-income families and for vulnerable populations, so public solutions are required.” (Canadian Centre for Policy Alternatives).
At our public hearing in Dawson Creek, Mayor Calvin Kruk requested that the provincial government play a larger role in ensuring subsidized housing is clean, safe, and accessible to low-income British Columbians. Mayor Kruk explained that some landlords of subsidized housing units do not maintain them to the proper standards. He urged government to ensure these standards are upheld by inspecting the units, and withholding cheques to landlords until the standards are met.
Below is what we heard on this topic.
“For us, it is important that the word "quality" is entered into consideration, that landlords' responsibility includes a commitment to the community and to the individual renting accommodation, that a standard must be realized and that it is no longer acceptable to allow living conditions to be sub par. A resolution endorsed at the Union of B.C. Municipalities included asking the provincial government to ensure that standards are met prior to sending a cheque to any landlord.” (Mayor Calvin Kruk, City of Dawson Creek).
“I would like some regulations requiring landlords to keep rental properties up to certain standards. I know of some places where the housing has been allowed to deteriorate to slum conditions and tenants have little choice because house prices have skyrocketed so as to be unaffordable.” (Jacque Ahlm, Williams Lake).
The Committee believes that individuals and families with low or moderate incomes should have access to affordable housing. We also believe that the government has an important role to play in ensuring that landlords comply with the provincial accommodation standards.
While in Cranbrook, the Committee heard a presentation from Andrea Goertzen, a local reporter with the Fernie Free Press. Ms. Goertzen conveyed to the Committee a sense of frustration over a news story she was working on detailing recent tenant evictions in Fernie.
The tenants were evicted legally; however, Ms Goertzen informed the Committee the property owner, using the existing legislation, intends to create a de facto strata development without going through the customary permitting process with local government. The proposal is to sell long-term leases at the conclusion of the renovation project which has the same impact as outright sales of condominium units within the former rental apartment buildings. The Committee believes that local government should have the opportunity to review this type of housing conversion. Here is what we heard from Ms. Goertzen's presentation:
“I know I don't need to tell any of you about the housing crisis that we're facing across the province, but what I can tell you about is how it's affecting my community and many long-term residents of my community — the most vulnerable residents in the community. With the owners of two low-income apartment complexes recently evicting our most vulnerable citizens and a zero-percent vacancy rate in Fernie, our community is faced for the first time with the possibility of approximately 30 people being homeless come October 31.” (Andrea Goertzen, Cranbrook).
A message we heard from the Kamloops Society for Community Living was the desire for more funding to be directed towards housing co-ops for disabled adults. The Society explained that group homes require far more funding and 24-hour care, whereas many people with disabilities do not need such a level of care.
The witness suggested that government consider promoting a co-operative housing model to permit disabled individuals to own their own homes. The benefit of co-op housing is that it would permit individuals to pool their resources to acquire suitable accommodations with an appropriate level of care. Here's what we heard.
“There is no doubt in my mind that there is financial benefit to setting up a housing co-operative for persons with a disability. The goal of owning your own home gives every person the incentive to be employed.” (Kamloops Society for Community Living).
Whereas in previous years criticism concerning the property transfer tax (PTT) and its ramifications for first-time home buyers was primarily relayed to the Committee by realtors, this year the Committee heard loud calls from the public at large for the government to eliminate this tax, or at least, revisit the threshold levels for first-time homebuyers. This is an issue primarily of concern to residents of Greater Vancouver and Greater Victoria, who have experienced significant escalations in housing prices. Some of the comments we heard are included below.
“Home-ownership still remains firmly out of reach for people in the Fraser Valley . Local governments need help providing affordable housing options. We recommend adjusting the PTT exemption threshold annually to reflect changes in the consumer price, and to eventually eliminate the PTT altogether.” (Fraser Valley Real Estate Board).
“The B.C. government should amend the property transfer tax (PTT) to charge 1 percent of the first $375,000 of the purchase price of a home and 2 percent on the remaining balance. The government should also create legislation linking those 1- and 2-percent tax tiers to the first-time buyer exemption level, so that if that exemption level is increased, the 2-percent tier then also kicks in at that higher exemption rate. We would also like to ensure that move-up buyers are required to only pay the property transfer tax on the difference between the price of the house they sell and the price of the house they purchase.” (Greater Victoria Chamber of Commerce).
The Committee recommends that the government:
Question 6: What are your other comments regarding your choices for Balanced Budget 2008?
As we noted at the outset of this report, the vast majority of witnesses appearing before the Finance Committee at our public hearings made presentations on topics other than climate change, sustaining health care, and housing British Columbians. For example, we heard impassioned calls for the government to review funding levels for the arts; co-ordinated presentations by associations representing the interests of B.C.'s post-secondary education sector; and additional funding requests by those providing child care services.
Throughout the consultation process, committee members also took note of several interesting proposals that may have considerable benefit to local communities or sectors. While these proposals may lack the broad appeal of calls for decreased income taxes or increased program spending, we believe that these ideas are worthy of consideration by government. These proposals include additional funding for restorative justice programs; a review of programs to bolster immigration; on-going monitoring of British Columbia 's tax environment; and other proposals to ensure economic competitiveness.
Echoing the submissions we received last year, the arts community again showed up in full force to our public hearings throughout the province. In each of the 14 communities we visited, the Committee received an overview from local arts councils detailing the positive impacts the arts plays in both urban centres and smaller communities. At our Victoria hearing, we received a brief from Arts Future BC, outlining the role the arts play in enhancing education, promoting health and healing, creating connections and communities, and enhancing the economy.
It was the opinion of most witnesses appearing before the Committee on this topic that government should substantially increase funding through the B.C. Arts Council. This view is summarized in the following statement:
“The role of the British Columbia Arts Council is to assist the arts and cultural community to achieve its creative, social and economic potential and it ensures that all British Columbians are able to participate in a healthy arts and cultural community recognized for its excellence. The BC Arts Council is the only stable source of direct, on-going, long-term, sustained core funding for arts organizations, museums, performing arts companies, and community arts councils on behalf of the government and people of British Columbia.” (Arts Future BC).
Presentations on this topic typically used current funding levels provided to the B.C. Arts Council as the basis for the claim that British Columbia is seventh in Canada for per capita funding of the arts. When prompted to explain this current level of expenditure, the witnesses acknowledged that there are also other sources of one-time funding available for community-based arts and culture events. However, the Committee is unsure of the total funding for arts in B.C. and suggests the government make that determination so that accurate inter-provincial comparisons are possible.
This Committee strongly believes that arts and culture activities should receive sufficient per capita funding — particularly in light of the approaching 150 th anniversary of B.C.'s founding as a Crown colony and the upcoming 2010 Winter Olympic Games.
Some of the comments we received on this topic are highlighted below.
“Arts organizations are expending huge amounts of time and human energy applying for often elusive and even peripheral grants, seeking alternate funding sources and engaging in endless activities that have nothing whatsoever to do with providing our community with the arts. This is all just to keep our doors open. With adequate means we could better get on with our jobs.” (Community Arts Council of Prince George and District).
“Those of us working in the arts and experiencing the day-to-day joy and excitement know that arts help create connections and assist in building stronger communities, contribute to our economic strength and foster employment. We are also well aware that the arts stimulate discussion and creative thinking and promote health and well-being.” (Kamloops Art Gallery).
“I firmly believe that the more an individual person participates in the arts, the more they understand themselves, the more they are tolerant of other cultures, the more they understand other people and languages, the more connected they are to history, and the more they feel they belong and have value in the community. When a person is connected in that way, they are also more fully and meaningfully contributing to society.” (Arts Council of Surrey).
The Committee recommends that the government:
The Committee heard in most communities visited that families are desperate for more child care spaces. From the Prince George Chamber of Commerce we heard there is a business case for government to help create more child care spaces in British Columbia . Specifically, we learned of the difficulty small business has in attracting and retaining workers due to a lack of child care spaces. We note that the Prince George Chamber of Commerce has stated in the past that the current subsidy program is cumbersome, and that the Federal Child Care Benefit provides an inadequate level of financial assistance for families to offset the costs of child care.
Other organizations appearing before the Committee also raised significant concerns over the economic impact the shortage of affordable, quality child care is having on local businesses and parents. Here is a sample of what we heard on this topic.
“Child care is still a top priority.” (Prince George Chamber of Commerce).
“For B.C. parents, particularly mothers, lack of access to affordable child care is still the biggest barrier they face in getting or staying in a job. Wait times for licensed care are years, not months, long.” (Coalition of Child Care Advocates of B.C.).
“Giving all mothers options makes sense for women and for society as a whole, especially with forecasts of labour shortages and our commitment in BC to continuing to push for equality in the workplace.” (British Columbia Government Employees' Union).
The Committee recommends that the government:
The issue of recruitment and staff retention of early childhood educators was prominent in many of the submissions to the Committee. In particular, several witnesses expressed a need for additional funding to increase the salaries and benefits provided to early childhood educators.
The Committee believes that the government should look at creative solutions to addressing staff retention issues in this field. We believe that offering student loan relief for those practicing in the field after graduation. Another option, based on successful trades-training programs developed between high schools and colleges, would be to facilitate student opportunities to complete credits towards an early childhood education diploma.
Here are some of the different comments we received on this topic.
“We must address the issue of compensation for child care workers, as recruitment and retention problems are rampant throughout the province.” (First Call – BC Child and Youth Advocacy Coalition).
“Most of our staff are now going to the school districts to be teacher assistants and going to work for the city of Quesnel play groups and preschool programs because we cannot compete with the wages. We pay the staff through our parent fees, and because of that we are not able to pay union wages. The educators I have talked to in the community who have moved on have said that they will not come back into our field of work because they are not recognized like they are in a school district or working for different city of Quesnel areas.” (Child Care Resource & Referral Programs – New Focus Society).
“Please revisit wage enhancement programs to support centers in paying an equitable wage for the work that is done by early childhood educators.” (Cranbrook Early Childhood Development Committee).
The Committee recommends that the government:
The Committee received many submissions from advocates for the developmentally disabled — through the B.C. Association of Community Living — requesting additional resources be provided to Community Living BC. The additional funding should be used to address service waitlists, support respite care, and child development programs. Their main message was as follows:
“The British Columbia Association for Community Living urges government to allocate the necessary funding required to meet the needs of the thousands of children and youth with special needs, adults with developmental disabilities and their families who are on waitlists for needed community living supports and services. Community Living British Columbia alone needs $54.8 million to address the needs of adults with developmental disabilities who are waiting for services in this year and next. In addition, thousands of children and youth with special needs are waitlisted for access to urgent therapy services, the infant development programs, supported child development programs and respite care. Families are in crisis.
The waitlists for community living supports and services are simply unacceptable. Individuals and families are in crisis and need your support.” (B.C. Association for Community Living).
The Committee also received several submissions from various agencies working in the community social services sector. We heard from the Federation of Child and Family Services of British Columbia and from other contracted agencies that additional resources are required within the Ministry of Children and Family Development's budget to specifically cover the inflationary costs of agency operational needs. For example, we heard the challenges faced by the Boys and Girls Club of Greater Victoria in meeting non-funded cost pressures associated with transportation, insurance, employee benefits, and technology upgrades.
Below are some of the submissions we received on this topic.
“We have already initiated discussions with our local government contract managers to mutually identify which direct services will have to be scaled back in order for us to meet our rent, hydro and oil bills. We will be forced to provide less service for the existing dollars — this may take many forms: from reducing intakes in some programs, having staff provide fewer visits, or eliminating specific services altogether.” (Boys and Girls Club Services of Greater Victoria)
“Our study determined that in the past three years alone, inflation and other (cost) drivers have resulted in a close to 30 percent increase in operating in infrastructure costs…We recommend that $20 million be placed into the MCFD budget to specifically cover the inflationary costs on agency operation needs.” (Federation of Child and Family Services of B.C.).
Based on the presentations made, the Committee believes that there is a need for government to consider additional funding allocations to the contracted community social services sector to cover inflationary costs.
The Committee recommends that the government:
Last year, the Finance Committee made a strong recommendation for the government to “immediately allocate necessary resources to eliminate the waitlists for assessments of children and youth with special needs.”
However, this fall, we heard from both the Nanaimo Child Development Centre Society and the B.C. Association of Child Development and Intervention that while the government did increase funding for services for children with special needs, there remains a waitlist of approximately 6,000 children and youth requiring access to early intervention and school-based therapy; infant development; and the supported child program. Here is what they had to say.
“We were delighted last year, when we received the report of the Standing Committee on Finance and Government Services, that they had adopted two of our recommendations. The Committee actually recommended that the government immediately allocate necessary resources to eliminate the wait-lists for assessments of children and youth with special needs and, furthermore, that the government should provide funding for a comprehensive prescreening program for all children. The government chose not to follow the recommendation of the Select Standing Committee on Finance and Government Services in the allocation of funding for early intervention services in the 2007-2008 fiscal year, the year we're in now.” (British Columbia Association of Child Development and Intervention).
“In Nanaimo we serve about 2,000 kids a year, and right now we've got 400 children on the wait-list. For us to be able to reduce that wait-list to zero by 2010, we need about a million dollars a year. Across the province it would be a mere $25 million to $30 million to eradicate from the wait-list the 6,000 children who are on it today. We've been very patient and very polite so far — meeting with the minister and MLAs — but we'll have to do something else. We can't wait for the kids any longer. We'll have to step up the pressure in order to make sure those children are helped.” (Nanaimo Child Development Centre Society).
The Committee believes that reducing waitlists for early childhood interventions will provide significant savings in the future with respect to health, educational, social services, and correctional costs. We again urge the government to provide the resources necessary to eliminate this backlog.
The Committee recommends that the government:
The Committee heard that the forest industry is suffering a “perfect storm” of negative factors — a high Canadian dollar, U.S. duties, and weak U.S. housing market — and that many mills are closing, some permanently. While mills in the central interior that have access to pine beetle wood are surviving and even prospering by selling high volumes of product to the U.S. market, it is clear that mills in the southern interior are facing financial hardships. The Committee is concerned that in the government's very legitimate effort to harvest a maximum amount of pine beetle wood, the industry in the southern interior may well disappear. Here is one example of what we heard.
“A bigger problem is that there are massive volumes available. No fault of anyone in the room but of a little critter called the mountain pine beetle. There are massive volumes available, and it's going to be there for two to three years, if their predictions on shelf life of this product are true. I seriously question whether the southern operators, whether it's Weyerhaeuser in Merritt, Tembec in Cranbrook , Pope and Talbot in Midway or you name it…. I don't think they can weather a two-year storm if something isn't done about this problem. I don't think they can do it." (Tembec Forest Industries).
In Prince George and Quesnel, we heard submissions from the local chambers of commerce and municipal representatives of the need for the government to continue to invest economic diversification programs in areas hard hit by the pine beetle epidemic. We heard that in both Prince and Quesnel, new highway infrastructure, education facilities, and community infrastructure were being developed to adapt to the changing economic bases of these communities.
“We've seen a lot of economic development in the north from various sectors: the increase in mountain pine beetle harvest; a new mining development, as the previous speaker talked about; increased oil and gas exploration as well as increased tourism. They provide excellent opportunities to strengthen northern communities on numerous horizons.” (Central Interior Logging Association).
“Over several decades communities in northern B.C. such as Quesnel have added significant economic wealth to British Columbia . The region's main economic driver, the forest sector, is about to undergo significant and dramatic changes for a number of reasons, including the catastrophic mountain pine beetle epidemic. While a number of steps have been undertaken by government to help diversify the northern economies, we believe that these efforts should not only be continued but intensified in coming years.” (Quesnel and District Chamber of Commerce).
“You're coming to ask us what we think the priorities should be in the 2008 budget, and I have only one request: to support our ability to keep our quality of life and, with it, our ability to continue wealth for all British Columbians.” (Mayor Nate Bello, City of Quesnel).
The Committee believes that the government should work closely with the federal government to ensure that forestry-dependent communities have access to necessary resources to diversify their economies.
The Committee recommends that the government:
The Committee heard positive stories about the state of the mining industry in British Columbia. We learned that investment in exploration is up significantly. However, the development and construction of major new metal mines are a rarity and there is concern that not enough new mines are being permitted to exploit the current super cycle in world mineral demand.
The industry highlighted the uncertainty that has arisen concerning the government's policies on consultation and engagement with First Nations communities. The industry expressed a desire for the government to address issues that would encourage companies to build a stronger relationship with First Nations and the need for government to encourage First Nations to support mine development by resolving the issue of revenue sharing. Here is a presentation we heard on this topic:
“The Mining Association of British Columbia encourages the establishment of a Mineral Tax Credit equal to 50 percent of the costs of pre-production community and First Nations consultation as well as environmental impact study costs. This policy change would assist the provincial Government in respect to the "New Relationship" with First Nations by helping to increase and improve the dialogue between industry and Aboriginals.” (Mining Association of British Columbia).
Another suggestion we heard was for government to direct an additional $25 million to Geoscience BC in conjunction with diversification strategies for interior communities impacted by the pine beetle. Here is the proposal.
“Based on global investments in geoscience, we would like to encourage you to consider topping up another $25 million into that fund because it's a very wise use of funds. We have 850 mineral exploration companies based in Vancouver , and less than 10 percent of those are active in Canada. We'd like to see more of those companies investing in Canada. My passion is to invest in B.C., so I want to see more investment back to B.C. Geoscience, again, will deliver those types of results.” (Association for Mineral Exploration British Columbia).
The Committee recommends that the government:
As we have indicated in previous sections, this Committee strongly believes that B.C.'s environmental goals can only be met if the government continues to make strategic investments in infrastructure that will ensure a strong and vibrant economy. We are satisfied that the Gateway Program is crucial to the economies of British Columbia and Canada.
Nonetheless, the Committee recognizes that we received hundreds of submissions from residents of the City of Vancouver who almost-unanimously advocated against the Gateway Program — particularly the proposed twinning of the Port Mann Bridge. Conversely, we also heard from residents living on the south side of the Fraser River demanding the Port Mann Bridge be twinned, coupled with enhanced transit options for regions south of the Fraser River.
Below is a sample of the debate concerning highway projects in the Greater Vancouver.
“Twin the Port Mann Bridge ASAP including provisions for transit to operate on an efficient time table which allows people to link up with existing and expanded transit infrastructure so they can actually reach a destination.” (Willard Wilton Surrey).
“While I agree with twinning the Port Mann and the HOV lane to 200th St, we ALSO need Rail/Rapid Transit to complement the highway system.” (Harry Yates, Langley).
“Stop and reconsider all mega-projects currently planned. Significantly, the "Gateway" project (highway construction and widening) will contribute enormously to BC's greenhouse gas emissions both during construction and on an ongoing basis.” (Tannis Braithwaite, Vancouver).
“Nothing is more important that reducing greenhouse gases than the immediate cancellation of the Gateway project. Increasing traffic flow across the Port Mann bridge will encourage the development of suburban living and a commuter lifestyle. (Aaron Barsky, Vancouver).
The Committee recommends that the government:
The various student unions, under the guidance of the Canadian Federation of Students, made four requests to reduce the cost of post-secondary education. The students' concerns were largely echoed by the various faculty associations appearing before the Committee.
The student unions and faculty associations were well organized in presenting their case to the Committee. Their message was reiterated in nearly every community we visited. However, in reviewing the thousands of on-line and written responses, we received only ten submissions calling for an across-the-board reduction in tuition fees; one call for lower tuition for trades training, and one submission calling for lower tuition for students studying to work within the medical profession. While the student unions often cited a survey indicating that “a 10-percent reduction in tuition fees is an investment supported by 80 percent of British Columbians,” clearly there are other fiscal priorities that require attention as well.
Nonetheless, the Finance Committee recognizes the important contributions made to the economy by B.C.'s colleges and universities and the Committee is also concerned that the cost of post-secondary education in B.C. not be higher than third among the Canadian provinces. Below, we review some of the suggestions we received concerning post-secondary education in British Columbia.
A familiar theme running through the submissions made by the students unions and faculty associations was that the costs associated with attaining a post-secondary education are becoming an obstacle for a significant portion of the population. Such costs not only include tuition but also room and board, fees charged by universities, and textbooks. To address these costs, organizations appearing before the Committee called for a 10 percent reduction in tuition fees, and funding to provide students with upfront, non-repayable grants. These suggestions made to the Committee are highlighted below.
“In total, today we have four recommendations for the post-secondary system. Students are seeking a 10-percent reduction in tuition fees, an investment supported by 80 percent of British Columbians. We are seeking an additional $100 million in non-repayable student financial assistance to reduce student debt, as 87 percent of British Columbians support greater funding for grants. We are seeking the elimination of interest on student loans. And we are seeking an additional $200 million in operational funding.” (Canadian Federation of Students).
“In previous budget consultation the Canadian Federation of Students has asked for a 10-percent reduction in tuition fees. We support that call and believe that such a move would send a strong signal to existing and potential post-secondary students that B.C. is serious about supporting those interested in post-secondary education.” (Federation of Post-Secondary Educators of B.C.).
The presentations by the student unions also highlighted a request for the government to review the interest rates charged on B.C. student loans. Currently, interest payable on student loans is — at the student's choice — either at a floating rate of prime plus 2.5 percent, or a fixed rate of prime plus 5 percent, where the prime lending rate is set by the Bank of Canada. We heard pleas from many students to reduce the interest rates charged to students entering the workforce, or to remove the interest charges entirely. The Committee agrees that many students are graduating with very large debts, high interest rates and are facing a very long wait before they can borrow for a vehicle, let alone a house or condominium.
“For a student with an average debt upon graduation, they're going to be paying about $400 per month for 9½ years before they'll finish paying off their student loan. In that time, the average student will have paid about $15,000 just in interest. That's $15,000 on top of the actual money they borrowed to go to post-secondary.” (North Island Students Union).
“A lesser-known fact is that student debt statistics leave out the interest paid on these loans. The B.C. government charges students between 3.5 percent and 6 percent in interest over its own cost of borrowing. If borrowing at a floating rate, students currently pay 8.5 percent per annum on floating loans and 11 percent per annum on fixed-rate loans. Incidentally, the interest on student loans is compounded daily… It is important for the government to send a signal to lower- and middle-income British Columbians that our colleges and universities are not restricted to wealthy British Columbians.” (Students' Union of Vancouver Community College).
We also heard calls for the government to consider increased operating grants to B.C.'s universities and colleges. In large part, the province's college and university presidents asked government to relieve both inflationary pressures as well as to provide additional resources to enhance the quality of education for students. The university presidents and faculty associations also requested that the government continue to provide additional resources to bolster the number of students receiving graduate degrees from B.C. institutions, and recommended continued investments in university-based research programs.
“The B.C. Colleges need a new funding mechanism that, in addition to student tuition, ensures the costs of colleges' operations are fully funded. To maintain the current levels of programs and services, we need a five percent increase in base operating funding: this five percent increase is equivalent to approximately $22 million and accommodates inflationary increases to our operations that have not been funded in years.” (British Columbia College Presidents).
“The University Presidents' Council of British Columbia calls on the Government of British Columbia to establish a stable and predictable funding framework that will enable B.C.'s post-secondary institutions to support continues improvements in their respective teaching and learning environments. This should include recognition of real inflationary cost pressures faced by universities.” (University Presidents' Council of British Columbia).
We also heard concerns from both the student representatives and business organizations about the current level of student financial aid. The Committee supports the recommendation in the Campus 2020 Report, that government should initiate a comprehensive review of BC's student financial assistance program, including all fiscal programs intended to provide assistance to meet the cost of post-secondary education. Here are some of the comments we received on this topic.
“We would like to see better scholarship and grant programs to encourage postsecondary education.” (Certified Management Accountants of British Columbia).
“British Columbians are being denied access to proper post-secondary education due to financial restrictions. Students are willing to pay for their education, but require loans to cover the significant cost associated with getting the training they need, and to cover living costs while they are attending as a full-time student, as defined by the institutions. The current student loan system is inadequate to meet the needs of our population and the changing demographic of students choosing to return to school.” (B.C. Chamber of Commerce).
Several witnesses appeared before the Committee to urge the government to support the recommendations in the Campus 2020 report concerning university research and spaces for graduate students and graduate student aid. These recommendations include allocating new graduate spaces to the University of British Columbia, the University of Victoria, and Simon Fraser University to fund graduate student research and enrolment as well as ensure that no qualified graduate student is denied access to study on the basis of financial circumstances. Here are some of the suggestions.
“Government has to build upon its recent funding for graduate students. For too many years, governments of all political stripes virtually ignored funding for graduate education. This was despite the fact that graduate students act as teaching assistants, research assistants and add generally to the intellectual life of the university.” (Confederation of University Faculty Associations of British Columbia).
“Indeed, Campus 2020's most ambitious targets concern research — to make B.C. one of the top three provinces in Canada for support for university-based research by 2010. This target is inseparable from another target of enrolling more graduate students per capita than any other province.” (University Presidents Council of British Columbia).
“Government has to pay more attention to the role of graduate education and the role that that plays in a high-quality university. For many years government funding for graduate education was virtually ignored by governments of all political stripes. The 2007 budget marked the start of new funding specifically for graduate education, something which we welcome and which we stress needs to be continued.” (University of Northern British Columbia Faculty Association).
A message that we heard from several business organizations was that they are ready and willing to offer post-secondary students opportunities for practical work experience through co-operative education programs. Such programs would benefit not only students looking to fund their post-secondary education, but also aid businesses in addressing critical labour shortages. However, while private sector businesses are willing to take on more co-op students, they require some form of tax credit to offset training requirements and employee replacements. The Victoria Chamber of Commerce estimated that a tax credit to B.C. business employers equal to 15 percent of wages paid to qualified co-op students would cost the government approximately $8.5 million, based on 2006-07 enrolment numbers.
Here is a sample of the submissions we received on this topic.
“Our labour market has never been more competitive than it is now. Co-op placement is one way for small business in particular to introduce the province's students to the career opportunities in their own backyard, giving our provincial businesses a competitive edge over companies in other provinces working very hard to attract our B.C. graduates.” (Victoria Chamber of Commerce).
“Co-op placements provide students with on-the-job training and experience while still in school. These arrangements also provide employers an opportunity to train potential workers. We support educational initiatives…such as the co-op tax credit to B.C. business employers. Such a program would ensure more of our province's young workers were highly trained, with connections in their local economy.” (Chartered Accountants of British Columbia).
The Committee recommends that the government:
Many witnesses appearing before the Committee noted the difficulties small- and medium-sized businesses were having in finding and retaining employees in both skilled and labourer positions. To address this issue of continued and growing concern, witnesses requested that the government enhance the provincial nominee program and an expansion of the Trades Trailer program.
A concern that we heard from industry and business organizations was that British Columbia is facing a significant labour shortage in both skilled and labourer positions. For example, the British Columbia Construction Association indicated that over the next eight years, 37,000 construction workers are required to meet domestic demand. However, the industry is already facing critical labour shortages — with the situation slated to worsen with an aging worker population.
We heard strong demand for the provincial government to expand both the scope and scale of immigration permitted under the Provincial Nominee Program and for government to assist immigrants in learning marketable skills. Suggestions for improvement included creating an on-line portal that will connect immigrants to available positions; permitting individuals with relatively low skills eligibility to access the program; and significantly increasing the number of immigrants coming to British Columbia through the program. We also heard several industry requests to augment the supply of workers through both temporary and permanent immigration.
The B.C. Chamber of Commerce also relayed concerns that many skilled immigrants that come to B.C. are still finding it difficult to obtain employment in their profession or trade because their credentials are not recognized by Canadian employers and/or professional associations. The Chamber requested that the provincial government work with the federal government to fast-track credential assessment and recognition.
Here are some of the comments we received on this topic.
“We believe that this is a reasonable and strong part of the solution to British Columbia in solving, certainly, the construction industry's labour needs. We would encourage government to reinforce their commitment to the provincial nominee program to ensure that both employers and immigrants have timely access to the provincial nominee program. We believe that additional resources would not be wasted in improving the ability to provide service through the provincial nominee program.” (British Columbia Construction Association).
“If Canada is to have a viable immigration policy, it needs a system that gives potential immigrants assurance that their applications will be processed in an efficient manner within a reasonable and predictable period of time. Otherwise, they will look to other countries.” (B.C. Chamber of Commerce).
One innovative way to promote skilled-trades options to youth living in rural or isolated communities has been the mobile trades-training trailer. The trailer is a mobile classroom that provides students access to welding equipment, drill presses, and other tools to supporting electrical, pipefitting, plumbing and welding education opportunities.
We heard support for this program from the Quesnel and District Chamber of Commerce:
“The mobile training program has been such a success in the community. I know it's focused on the First Nations communities, but we've been very privileged to have it come into our community on two of the terms.” (Quesnel and District Chamber of Commerce).
The Committee encourages the government to develop similar mobile trades-training classrooms to allow British Columbians outside the Lower Mainland access to education opportunities.
The Committee recommends that the government:
Two issues pertaining to income assistance piqued the Committee's interest. First, we heard in Kamloops a request for the government to consider increasing the earnings exemption provided to persons receiving disability benefits to $1,000 per month. The witness appearing before the Committee indicated that increasing the earnings exemption would have a significant positive benefit on the lives of British Columbians living with disabilities.
“We'd like you to see disabled persons as individuals with varying abilities, not disabilities, and to believe in the philosophy that we are only as good as we treat those less able than ourselves and that if you extend a helping hand, you will be rewarded with a positive outcome. (We request that you consider) increasing the amount that disabled persons can earn on a monthly basis from the current $500 per month to $1,000 per month. This would allow disabled persons to work towards purchasing a home of their own.” (Kamloops Society for Community Living).
Though not explicitly addressed in the submissions received, committee members also believe that the government should consider permitting income assistance recipients to continue to receive benefits if a concerted effort is made to improve their employment prospects through education.
The Committee recommends that the government:
Although options for the public to provide input on potential tax cuts were not provided for in this year's budget consultation paper, the Committee received many submissions calling on the government to continue to cut personal and corporate taxes. As we identified in our response to Question 3, there was support for tax shifting: that is, lowering personal income taxes while raising consumption taxes. However, we also heard a strong message that British Columbians feel that they are already overtaxed — particularly in light of the government's surplus projections.
We reiterate our position that the government's first priority should be maintaining a strong economy. To this end, we highlight three taxes that continue to hamper B.C.'s economic competitiveness: personal income taxes, corporate income taxes, and the corporate capital tax on financial institutions. We also examine the discussion we heard on tax harmonization proposals.
We heard a clear message that the government should again consider reducing the overall taxes collected from individuals and families. This call goes beyond calls for the government to consider tax shifting — that is, offsetting higher consumption taxes with lower personal income taxes. Rather, the preference of many British Columbians is simply for the government to decrease the tax burden faced by the B.C. residents. Here are some of the comments we received on this topic.
“The Retail Council of Canada recommends that the B.C. government continue to improve the living standards of B.C. families by returning excess revenue to taxpayers through personal income tax cuts or a reduction in the PST.” (Retail Council of Canada).
“Reduce income tax es by increasing the basic deduction and lowering the tax rates at each tax level.” (James L. Swift, Parksville).
A serious concern raised by the representatives of the business community was the need for to carefully monitor corporate tax rates to ensure that British Columbia remains competitive with Alberta. We again heard concerns that Alberta intends to reduce its corporate tax rate to 8 percent. Organizations appearing before the Committee argued that B.C.'s corporate tax rate should not exceed Alberta 's tax rate by more than 25 percent.
Here are some of the comments we received on this topic:
“The B.C. Chamber of Commerce recommends that Budget 2008 include a public commitment to policy that ensures B.C.'s corporate tax rate does not exceed 125 percent of the corporate tax rate of that in Alberta. It is important to note that Alberta has committed to reduce its corporate tax rate to eight percent in the coming years.” (B.C. Chamber of Commerce).
“To remain competitive, the B.C. Government should reduce the corporate income tax rates by at least one percentage point in 2008/09. Such a reduction is particularly important for B.C.'s small to medium-sized businesses that need the additional cash flow to fund their growth.” (Vancouver Board of Trade).
An area of ongoing concern expressed by financial institutions is the continued application of the corporate capital tax on financial institutions. The Committee learned that all of British Columbia's major competitors in the financial services sector — Alberta, Ontario, and Quebec — have, or intend to, phase out capital taxes on financial institutions by 2011. In addition, B.C.'s credit unions raised a particular concern over paying the tax on earnings that fund the Credit Union Deposit Insurance Corporation. The statements made on the corporate capital tax on financial services are highlighted below.
“The Canadian Bankers Association's number one budget priority for B.C. continues to be the elimination of the capital tax levied against the financial services industry. This tax creates an economic distortion by singling out one industry for a higher, more punitive rate of taxation, and it sends a very strong and negative signal to potential investors in this sector.” (Canadian Bankers Association).
“The Chartered Accountants of B.C. fully supported the phasing out of the corporate capital tax on general corporations earlier this decade, and we believe it is now the time to remove the capital tax on financial institutions.” (Chartered Accountants of British Columbia).
“The imposition of corporation capital tax on credit unions is especially punitive in that financial institutions are required to maintain and enhance their capital bases, to ensure that they are able to withstand operating losses. Given that the provincial government backstops the Credit Union Deposit Insurance Corporation, this is commendable public policy. However, it is incongruous that credit unions are required to pay taxes on earnings retained to ensure their financial stability, that protect CUDIC's fund and, ultimately, safeguard the taxpayer.” (Credit Union Central of British Columbia).
The Committee heard from the business community that they want the government to examine harmonizing the provincial sales tax with the federal goods and services tax. Again this year, we heard from B.C.'s retailers and accountants advocating British Columbia do away with the unnecessary duplication from collecting two separate sales taxes. In addition, it was argued that integrating the two consumption tax systems would lower costs and reduce the administrative burden of both business and government. The Committee believes harmonization should be examined with a view of protecting the province's capacity to use the provincial sales tax to meet various policy objectives and to not add to the overall tax burden of British Columbians. Here are some of the submissions we received on this topic.
“For many years, the Retail Council of Canada has pressed for harmonization of provincial sales taxes with the GST. We believe the value-added nature of the GST is much superior to the retail sales tax model. As well, harmonization of commodity taxation into one system also would bring important economic benefits and savings to governments and taxpayers. RCC was an active and vocal supporter of the implementation of the Harmonized Sales Tax in the three Atlantic Provinces.” (Retail Council of Canada).
“Those of you who participated in this process before will know that we have long been advocates for the harmonization of federal and provincial sales taxes. The current tax system requires about 400,000 B.C. businesses to administer two separate sales taxes, one at the provincial level and one at the federal level. The lack of harmonized sales tax translates into two key disadvantages for B.C. businesses. Firstly, B.C. businesses require separate recordkeeping, reporting and remittance for the GST and the PST, creating unnecessary costs for accounting and administration. In addition, businesses must deal with two sets of auditors enforcing compliance at the provincial and federal levels, based on two different sets of rules. Secondly, provincial sales tax is paid on inputs — for example, business supplies and materials — and is not creditable against tax collected, which imposes additional costs on business. These input costs are simply passed along to the consumers as a hidden tax. Both of these competitive disadvantages could be resolved through harmonization.” (Institute of Chartered Accountants of British Columbia).
The Committee recommends that the government:
The Committee received a submission from Katy Hutchinson, the widow of a murder victim, concerning the important role restorative justice programs can play as crime-reduction strategy. These programs focus on the participation of those most directly involved in a crime - the victim, community and the offender – in the justice process. The goals are to collectively address the responsibility of the offender and the harm done to victims, to facilitate the reintegration of both into the community, and to prevent future crime.
Ms. Hutchinson's submission indicated that restorative justice programs reduce the need for incarceration and they reduce recidivism rates. She informed the Committee that grassroots restorative justice programs rely on grant funding from government and other sources. The province currently provides $150,000 to restorative justice programs in the form of $2,500 grants. However, grant applications are time-consuming and the funding is unstable. She appeared before the Committee to request adequate and stable funding for restorative justice projects to realize their full potential to build and sustain safe communities. Some of her comments are presented below.
“[Through restorative justice] I was given a voice, and I got back some of the loss of control that Bob's murder had inflicted upon me and my family. I was given a chance to find humanity in a situation that up until that point had been anything but humane. Most importantly, I was able to take an active role in breaking the cycle of violence for this young man…I agree that we need the existing traditional justice system and prisons to house offenders where incarceration is in the best interest for all concerned. But I believe we also need properly funded restorative justice programs throughout the province to address crime at a grass-roots level, divert young people and stem the downward spiral of criminal behaviour, build relationships where none exist, repair harm and empower victims, strengthen families and build a safe community.” (Katy Hutchinson, Victoria).
The Committee recommends that the government:
The Legal Services Society of British Columbia appeared before the Committee advocating that government make certain that sufficient resources are provided to the community court pilot program to ensure its success. The community court project seeks to integrate justice, health, and social services within the same room. The intention of the program is to provide better integration amongst the different agencies that deliver services to offenders; provide greater efficiency to hold offenders accountable more quickly; and provide sentences that address the root causes of criminal behaviour.
The Committee believes that the community program pilot program has the potential to address many of the underlying causes of criminal behaviour. However, in order for the pilot program to succeed, the government should re-affirm its financial commitment to ensure its success.
“One of the things we've learned over the past year, as we've started digging into this issue further, is that the silos within public services are so endemic, so structural that there is neither budgeting nor planning that happens in a way that actually addresses those needs. The community court program that the Ministry of Attorney General is bringing forward is a strong first step in that direction, but it is a first step. … we'd encourage you to begin an examination about how budgeting can occur so that we get a more outcome-oriented approach to that social service/justice service delivery.” (Legal Services Society of British Columbia).
The Committee recommends that the government:
A second issue presented by the Legal Services Society and other witnesses was for the government provide additional legal aid resources, especially to aid to families appearing before the courts. The witnesses appearing the Committee stressed that providing additional resources in this area would go a long way to improve the quality of life of innocent children stuck in the middle of difficult family disputes. Here is what we heard on this topic.
“Legal aid needs money for family law. Family law is the most difficult of all of the areas of law because we deal with children. We deal with abused children. We deal with special needs children. We deal with children who are not yet diagnosed. We deal with kids for whom there is no diagnosis. My pitch is for more money, please, to go to legal aid so that we can represent children.” (Dr. Mychael Gleeson, Coquitlam).
“Family law is a special area as far as I am concerned. It's a fragile, sensitive area. It's got huge, significant ramifications, I think, for the lives of families, children and all of us in the community. It impacts us all. That's why I think that the government needs to spend special attention to make sure that this area is adequately funded, as it affects us all.” (Legal Services Society of British Columbia).
The Committee recommends that the government:
A submission from the Vancouver Parents for Successful Inclusion outlined the difficulties faced by parents of students with special needs and high incidence students. The presentation noted that in B.C., the number of special needs students has increased while the number of special needs teachers has decreased, resulting in a decline in one-on-one instruction.
“We can't afford not to educate these students, as so many have the potential to become independent, productive, tax-paying members of our society but may instead be condemned to lives of dependence if their learning needs are not met. Investing in our students will bring great returns. We can do better. We all know that we must do better. And there is no excuse not to do so.” (Vancouver Parents for Successful Inclusion).
In Terrace, the Committee received an interesting request for the government to consider allowing persons with permanent disabilities to voluntarily have information about their disability printed on their British Columbia Identification Cards (BCID). The witness explained that having this information on their government-issued identification card would improve the quality of life for those whose disabilities may not be visible. The card could be shown by the holder to access municipal or provincial services offered to persons with disabilities; aid the police in identifying persons in need of assistance; and assist persons who require additional assistance while traveling. In addition, having such an identification card would reduce the need for a person with disabilities to get a note from a physician to prove a disability.
“I would like to see, in the 2008 budget, money put towards the already existing BCID card to add onto the back of the ID card a person's disabilities, similar to the way restrictions are put on a driver's license. This information contained on the card would be voluntary. Why is this information needed? People who have a hidden or visible permanent disability living in B.C. do not have legal proof to show they have a permanent disability.” (Yvonne Nielsen, Terrace).
The presenter to the Committee in Terrace made a passionate, well-reasoned suggestion. The Committee applauds her determination in bringing this issue to our attention. We believe it to be a proposal worthy of the government's attention.
The Committee recommends that the government:
The all-party Select Standing Committee on Finance and Government Services conducted its annual budget consultation process from September 14 to October 26, 2007. Over the course of this consultation period, the Committee received more than 5,800 submissions on topics ranging from steps the government should take to address climate change, to suggestions on how to ensure the sustainability of B.C.'s health care system, to propositions to address housing issues. Through our public hearings and written submissions, we received hundreds of other proposals pertaining to the allocation of the province's fiscal resources. This report, and its 55 recommendations, summarise the key issues the Committee heard and read during our consultations.
With respect to the Committee's recommendations on addressing greenhouse gas emissions, the Committee believes that measures to reduce gas emissions must not have an adverse effect on B.C.'s strong economic position or increase the provincial debt-to-GDP ratio. Indeed, we believe that the challenge to reduce greenhouse gases by 33 percent by 2020 poses an excellent opportunity for B.C. to become a leader in developing and promoting new and exciting technological innovations.
It is apparent that the vast majority of British Columbians taking part in this year's budget consultation process want the government to take decisive action to reduce greenhouse gas emissions. To this end, the Finance Committee endorses, as a first step, the creation of a website that will provide factual information on the impacts of climate change in British Columbia's environment and economy, information on what steps individuals and business can take to reduce their environmental impact, and serve as repository of the myriad of programs and ideas available to individuals and business willing to change their behaviour.
However, we also heard, particularly from residents outside of metro Vancouver and greater Victoria , of real concerns that tax shifting and additional transportation taxes would unduly penalize British Columbians living outside of major urban centres. While the Committee is not entirely against introducing new forms of taxation to address climate change, we strongly believe that the government should — as first priority — consider incentive-based programs targeting behavioural change in both individuals and businesses.
Such incentive-based programs may include additional resources to promote energy-efficient households; multi-faceted support for the British Columbia agriculture industry; additional resources to promote made-in-B.C. biofuels; various programs to improve the efficiency of B.C.'s trucking fleet; and measures to promote environmentally-friendly consumer packaging. To allay some of the concerns expressed by urban residents, we also endorse calls for the government to expedite — where fiscally feasible — investments in rapid transit infrastructure.
Over the course of our deliberations, we heard from many individuals — aided by information prepared by technologically-savvy environmental advocacy organizations — calling on the government to implement a carbon tax. Conversely, we heard relatively few submissions even mentioning the cap-and-trade system of emissions trading favoured by the government and by many other North American jurisdictions. As a Committee charged to receive input on the province's budget and fiscal policy, we simply lack the necessary resources to evaluate the benefits and costs of each system. However, in light of the growing North American consensus favouring the cap-and-trade system to reduce net reduction of greenhouse gas emissions, we recommend the government take leadership in promoting a carbon trading system.
The budget consultation paper also asked for British Columbians to provide feedback on the topics of ensuring sustainability within our health care sector. The Committee was surprised by how few suggestions the public made on how to best ensure the British Columbia 's health care system is accessible and available for future generations. However, we received many suggestions for the government to consider increased investments in public education campaigns on the benefits of healthy eating and physical activity to be delivered through ActNow BC; review the viability of tax credits for children, students, and seniors mirroring the standards set under the federal government's Children's Fitness Tax Credit; and substantial increase on the taxation of tobacco products. The Committee also believes that the government must do more to inform British Columbians about the looming budgetary crisis facing B.C.'s health care system.
Concerning the question on “other housing initiatives” the public wants the government to consider, the Committee believes that the government should continue to work with municipalities to ensure that all reasonable steps are taken to create more affordable housing spaces for British Columbians on low and moderate incomes. We also recommend that the Minister Responsible for Housing review the Residential Tenancy Act to ensure that municipalities have the authority to review conversion of rental properties into de facto strata developments. We also recommend the government review the threshold levels specified under the property transfer tax, including raising the exemptions provided for first-time homebuyers.
Of course, the provincial budgetary priorities extend well beyond the confines of climate change, health care and housing. For example, we heard a strong need for the government to remember that environmental concerns go beyond greenhouse gas emissions. Indeed, we heard requests and make recommendations for the government to enhance its commitments to air and water quality monitoring, river dredging and diking, and to consider increases to the Ministry of Environment's budget to enhance wildlife conservation, provincial park infrastructure and environmental regulatory enforcement.
We also heard requests for the government to review issues pertaining to arts funding, child care accessibility, resources available to the contracted community social services sector, post-secondary education, and restorative justice programs and the community court pilot program. We would also request the government consider a proposal that would provide persons with disabilities to voluntarily have that information listed on their provincially-issued identification.
With respect to measures to enhance economic growth, we re-confirm the Committee's recommendation that government continue to build highway infrastructure that is of provincial and national importance — namely the Gateway Program. We make recommendations to bolster B.C.'s mining industry, particularly in relation to First Nations and in relation to areas of the province hit by pine beetle, support the forest industry through transition, and bolster temporary immigration and immigration through the provincial nominee program. The Committee also recommends that the government consider reducing personal and corporate income taxes, eliminating the corporate capital tax on financial institutions and to give serious consideration to harmonizing the provincial social services tax with the federal goods and services tax.
These 55 recommendations reflect the Committee's response to the Budget 2008 Consultation Paper. These recommendations reflect both what we heard from the public during the consultation process, as well as some of the key issues identified by committee members during their deliberations. In making these recommendations, the Committee is fully aware that the government will do the technical analysis to determine if the proposals put forward are financially viable and would have a positive impact on the lives of British Columbians. We truly believe that this Committee plays an important role in ensuring that all British Columbians have the opportunity to provide real and heartfelt input into the fiscal and budgetary priorities of British Columbia.
Addressing greenhouse gas emissions:
The Committee recommends that the government:
Sustaining health care
The Committee recommends that the government:
Housing British Columbians
The Committee recommends that the government:
Supporting the artistic community
The Committee recommends that the government:
Child care
The Committee recommends that the government:
Early childhood education – staff training and retention
The Committee recommends that the government:
Contracted community social services cost pressures
The Committee recommends that the government:
Early assessment
The Committee recommends that the government:
Forestry
The Committee recommends that the government:
Mining
The Committee recommends that the government:
Transportation infrastructure
The Committee recommends that the government:
Post-secondary education
The Committee recommends that the government:
Labour shortages
The Committee recommends that the government:
Income assistance
The Committee recommends that the government:
Taxation
The Committee recommends that the government:
Restorative justice
The Committee recommends that the government:
Community court pilot program
The Committee recommends that the government:
Legal aid
The Committee recommends that the government:
British Columbia identification card
The Committee recommends that the government:
© 2007 Legislative Assembly of British Columbia