2008 Legislative Session: Fourth Session, 38th Parliament

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

Wednesday, October 15, 2008

4 p.m.

Fraser Room, Sheraton Vancouver Guildford

15269 - 104th Avenue, Surrey, B.C.

Present: Randy Hawes, MLA (Chair); Bruce Ralston, MLA (Deputy Chair); Dave S. Hayer, MLA; Richard T. Lee, MLA; John Rustad, MLA; Diane Thorne, MLA; John Yap, MLA

Unavoidably Absent: Robin Austin, MLA; Harry Bloy, MLA; John Horgan, MLA

1. The Chair called the Committee to order at 3:59 p.m.

2. Opening statements by Randy Hawes, MLA, Chair.

3.The following witnesses appeared before the Committee and answered questions:

4. The Committee adjourned at 7:45 p.m. to the call of the Chair.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Finance and Government Services

Wednesday, October 15, 2008

Issue No. 86

ISSN 1499-4178

[ Page 2093 ]

WEDNESDAY, OCTOBER 15, 2008

The committee met at 3:59 p.m.

[R. Hawes in the chair.]

R. Hawes (Chair): Good afternoon, everybody. I'm Randy Hawes, and I'm the MLA for Maple Ridge–Mission. I'd like to welcome you here to this meeting and thank all of you for participating in what we believe to be an extremely valuable process.

In preparing estimates for budget 2009, the Minister of Finance is required to release both a fiscal forecast and a budget consultation paper by September 15 of each year. The consultation paper is required to provide a description of the major economic and policy assumptions underlying that fiscal forecast as well as identify the key issues that need to be addressed by the public in preparation for the budget.

The Select Standing Committee on Finance and Government Services is charged with carrying out public consultations on the minister's behalf. This all-party committee is required to report back to the Legislature by November 15.

So far we've had public hearings in Kitimat, Smithers, Fort St. John, Prince George, Williams Lake, Kamloops, Penticton, Vancouver, Cranbrook, Nelson, Courtenay, Langford and this morning in Abbotsford. We're in Surrey today, and tomorrow we will be in Burnaby and Coquitlam. Then we will begin work on drafting our final report.

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If you'd like to review the budget consultation paper, there are copies available at the registration desk at the back of the room.

If you want to make a presentation to the committee, you can do so. Information on how to do it is on our website at www.leg.bc.ca/budgetconsultations. Any input that the committee receives in writing or in electronic form is given the same consideration as any oral presentations that could be made here today. Due to the federal election, we have extended the deadline for written submissions to October 24.

Today we will hear from a number of presenters, and each will be allotted 15 minutes. We do recommend that you try to take ten minutes and then allow us five minutes for questions. However, the time is yours. If you wish to use the whole 15 minutes in your presentation, you're free to do so.

I'll give you a heads-up at ten minutes, and then I'll give you another heads-up at two minutes if you decide you want to use more time for your presentation. Time permitting, at the end we'll have an open-mike session. Open-mike presenters are given five minutes, and there will be no questions.

Now I'll ask the other members of the Finance Com­mittee to introduce themselves, starting with Richard.

R. Lee: Good afternoon. I'm Richard Lee, MLA for Burnaby North.

B. Ralston (Deputy Chair): Bruce Ralston, MLA for Surrey-Whalley and vice-Chair of the committee.

J. Rustad: Good afternoon. John Rustad, MLA for Prince George–Omineca.

D. Thorne: Hi. I'm Diane Thorne. I'm the MLA for Coquitlam-Maillardville.

D. Hayer: Good afternoon. I'm Dave Hayer, MLA for Surrey-Tynehead. I'd like to welcome the committee and all the committee staff to my constituency of Surrey-Tynehead.

J. Yap: Hello. I'm John Yap, the MLA for Richmond-Steveston.

R. Hawes (Chair): Joining us today, I'm pleased to introduce our Clerk, Kate Ryan-Lloyd. Also with us today is Mary Newell. She's staffing the registration desk at the back of the room. The staff of Hansard Services, Michael Baer and Polly Vaughan, are recording today's meeting and will prepare a written transcript as well as broadcast it live on the Internet.

With that introduction, we will now call on our first presenter, Kwantlen Polytechnic University — Mary Jane Stenberg and Dr. David Atkinson.

Presentations

D. Atkinson: I wish to thank the Select Standing Committee on Finance and Government Services for this opportunity to speak today on behalf of Kwantlen Polytechnic University. I suspect you all know that Kwantlen is one of British Columbia's newest universities, having only two weeks ago — not even two weeks ago — celebrated its inaugural convocation as a university.

Kwantlen is defined in the University Act as a teaching-led, essentially undergraduate institution. As a university, Kwantlen has retained its dual-sector role, offering programs in trades and technology, one- and two-year career-focused programs and four-year undergraduate degrees. We are defined by a flexibility that allows students to ladder from one program to another, and our emphasis in all respects is on accessibility.

Today I would like to focus my comments on questions 2 through 4 of those suggested in the budget consultation paper and specifically on choices for priority investment and for investing the savings from lower interest payments resulting from the reduced operating debt.

Not unexpectedly, my advice, given my role as president of one of British Columbia's newest universities, is to invest in higher education. I will speak briefly
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about our ambitions in three areas: (1) the need to increase access to post-secondary education in the South Fraser region, particularly for non-traditional students; (2) the need to provide programs that respond to market demand; and (3) the need to respond to the particular shortage of health care professionals in Surrey.

Some background is necessary here. For some time we have been aware of the poor participation rates in higher education in the Surrey region. At present Surrey is Canada's 12th-largest city and will surpass Vancouver soon. Disturbing, though, is that only 18 percent of Surrey residents over 25 hold university degrees, compared to 36 percent of Vancouver residents. If these numbers persist, the competitive position of Surrey in the South Fraser — I think we would all agree — is indeed worrisome.

Equally troubling, though, is that at present the South Fraser has fewer than 100 university and college seats for 1,000 19-to-25-year-olds, compared to the average of 245 per 1,000 provincially.

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My first point, then, relates to Kwantlen's commitment to open access and to providing opportunities for post-secondary education to groups of students who might not otherwise consider studying at university and college.

In addressing access, we have understood that increasing the number of student places at Kwantlen will not in and of itself improve access. The more fundamental issue confronting us is one of increasing participation, which in turn demands that we work to change attitudes to effect transition from high school to university and to provide an environment that supports learners who might be at risk.

In this context, I bring to your attention a unique Kwantlen program, its SPARK program, which has enjoyed spectacular success over four years of operation but which is itself at risk without the continuing support of the British Columbia government. Of the approximately 200 students who have participated in this program, all from the Indo-Canadian community and all of whom were identified as at-risk learners, over 90 percent have gone on to post-secondary education.

There are many reasons for the program's success. It is a unique partnership that brings high schools, the Indo-Canadian community and Kwantlen together. It begins working with students in grade 11 and allows them access to university-level courses. It provides substantial academic and non-academic support to students, and it focuses on student success, rather than obsessing about student failure.

The program itself is jointly funded through the SPARK Foundation, which has raised approximately $400,000, matched by a generous government grant, also of $400,000. We are in the last year of the current funding envelope, and we wish very much to continue the program and, indeed, to expand it. It has just admitted its first, first nations class.

We are therefore looking for bridge funding for next year, with the expectation that we would develop a comprehensive proposal to expand the program into other schools, both in Surrey and elsewhere. We believe this type of programming — one that increases participation and expands British Columbia's pool of skilled, educated workers — is critical to the economy south of the Fraser.

My second point really takes off from my first, which deals with the need to provide more programming in this region that will genuinely attract students. We know that we cannot build something and assume that students will arrive. Several months ago the Ministry of Advanced Education requested that we submit a joint proposal with Simon Fraser University that would address the shortage in Surrey. This we have done, and we have called it the Surrey Solution, copies of which I am pleased to leave with you.

The major elements of our proposal are as follows. Kwantlen will provide 1,200 new student places in Surrey. Of these 1,200 places, Kwantlen will reallocate internally to cover the cost of 500 of them. These places will be in high-demand programs such as nursing, psychiatric nursing, health studies, business, technology and the trades. Significantly, Kwantlen has just opened up new programs in plumbing and electrical at its Cloverdale campus. Kwantlen is requesting, then, that the government fund 700 new student places for Surrey students.

We are aware as an institution that Kwantlen must be a good steward of its resources and that we must use the resources we have in the most effective way possible. We are, therefore, committed to reallocating resources internally into high-demand areas. We know, too, that programs must be in areas of need, both from individual students and by the province generally. It is with this in mind that we have specifically earmarked particular areas for development.

This, then, brings me to my third point. We have specifically targeted nursing and psychiatric nursing for the majority of our growth. Over the next five years 2,100 nurses will retire from the South Fraser health district, the health authority. As well, there will be a need for approximately 600 new nurses. Kwantlen is committed to developing foreshortened programs in both nursing and psychiatric nursing that will allow students to move through the system faster, in three years rather than four, as well as a post-degree nursing program that will allow students already possessing a university degree to acquire expeditiously a nursing credential.

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Also important is that Kwantlen was recently awarded the provincial contract for the evaluation and upgrading of foreign-trained nurses. Our major challenge related to this initiative is space. The nursing education facilities
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at our Surrey campus — and this is a Surrey solution — are already stretched, and there is simply no way that they can accommodate the kind of growth envisioned in this proposal.

We are therefore suggesting a collaborative project that allows for a new facility to be built on Simon Fraser's Whalley site that would accommodate both SFU's future growth in science and Kwantlen's growth in nursing and health science.

Since we submitted the Surrey Solution document, we have entered into discussions with the Fraser Health Authority to develop a closer collaborative agreement that would have virtually all Kwantlen's nursing students pursuing their practice or practicum in the Fraser Health district. It is hoped that this would increase the number of Kwantlen students staying in the region as professional nurses.

We know from experience that students tend to take their first job in the place that they did their last practicum placement. We are suggesting that there may well be a place for a truly collaborative venture between Fraser Health, SFU, Kwantlen and, perhaps, other institutions of higher education that would allow for the construction of a teaching facility for medicine, nursing and other allied health sciences in conjunction with any new hospital constructed in the Surrey region.

We appreciate that this is an audacious proposal, but we are also aware that the shortage of health professionals in Surrey has gone well beyond the point of grave concern.

I thank the committee for the opportunity to speak today. I ask that you give our proposals your serious consideration. In closing, I wish to reassure the committee of Kwantlen's absolute commitment to being a new creative kind of university that will confirm the wisdom of allowing Kwantlen to go from a university college to a university in the first place.

R. Hawes (Chair): Thank you very much.

R. Lee: I know that BCIT is going to launch a three-year nursing program. Have you talked to BCIT to see if any collaboration on that front…?

D. Atkinson: The conflation of the program is really not that difficult. In many ways, all we do is take away a student's vacation time so that students would simply go directly through the program in a way not unlike students go through medical programs now.

The actual curriculum itself will not change very much, simply because the credentials for entry to practice are not established by the nursing schools. They are actually established by the professional organization.

D. Hayer: Thank you very much. Very good presentation, actually. A very good topic.

My question: have you talked to the Ministry of Advanced Education on this? Are they aware of it?

D. Atkinson: Oh yes. We have talked to a lot of people about this. In fact, I think we've talked to you about it.

This is a proposal which we think is well worth consideration. We think that the time has come for post-secondary institutions in British Columbia to be able to collaborate better, particularly around very expensive physical infrastructure. The province, I think we will all agree, just can't keep building facilities that are not used 100 percent of the time, and I think this is one thing that we can get from this.

D. Hayer: Also, I want to just say that it is very good to see that you're getting Fraser Health and Simon Fraser involved to do work and the cooperation that can benefit students from everywhere and utilize some of the skills already available in training, the facility, the students….

B. Ralston (Deputy Chair): Thanks very much. I think these are imaginative proposals. I guess in the spring there was certainly some debate in the Legislature about the Ministry of Advanced Education and the budgeting process. How important are stable, long-term budgets to the planning of these kinds of new programs?

D. Atkinson: For universities, as for any publicly funded sector such as health care, stable funding is one of the most important things we need. It is very difficult for us to plan when our planning horizon is only year to year, depending upon what we might find in the provincial budget.

It also, of course, becomes particularly problematic if the provincial budget is late, or if within the provincial budget we get surprises that we were not anticipating. I think, to be fair…. This is no reflection on the decision that was made, but we discovered, of course, that our anticipated budget was going to be reduced by 2.6 percent.

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Can we manage that? Of course we can manage it. Is it difficult because we didn't get any heads-up? Yes, of course, it is. So stable, committed funding year over year with a consistent two- or three-year window certainly makes our planning much easier and, I suspect, in the long run allows us to get more value out of the investment that is being made.

R. Hawes (Chair): Can I just ask you…? The 1,200 new students, funding 700 — there's no dollar figure that I can see in here. Do you have a dollar figure — roughly?

D. Atkinson: There is a British Columbia formula. I think a nursing student, for example, costs somewhere between $6,000 and $7,000 a year.

R. Hawes (Chair): Per student, eh?
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D. Atkinson: Per student, per FTE — yes. Of course, it's depending on program. You know, some programs are more expensive or less expensive than others.

D. Thorne: Lots of good ideas that people have said. I was particularly interested in the SPARK program. It's not clear to me from this presentation if you have…. I don't know what the SPARK Foundation is, but I assume it's a charitable foundation.

D. Atkinson: Yes, it is.

D. Thorne: Is that funding also ending this year — their half of the funding?

D. Atkinson: Actually, Mary Jane could probably speak more….

M. Stenberg: Yeah, the SPARK Foundation is actually community-driven. It was a grass-roots group organized by our current chancellor, Arvinder Bubber, who gathered a group of Indo-Canadian business people together. They're very committed to raising funds in an ongoing way, but they can't do it alone.

D. Thorne: No, but I'm asking: is there money from them available?

M. Stenberg: Oh yes.

D. Thorne: And you're asking us to recommend that the government continue to match what they raise. Is that…?

M. Stenberg: Yes.

D. Thorne: Yeah, it's not quite clear from that — that that's what you're saying. So you're asking for continuing matching funds — ongoing.

D. Atkinson: That's right. The SPARK Foundation is committed to continuing to raise funds for this program.

D. Thorne: If the government will continue to match.

M. Stenberg: Even if the government doesn't continue to match.

D. Atkinson: Even if the government continues, but it would be very difficult for them to raise the total amount, I think is what we're saying.

D. Thorne: Yeah. Certainly the statistics look really good on that.

J. Rustad: I just want to ask about the SPARK program as well. I'm very encouraged with the approach — looking at building on successes as opposed to looking at bars to be reached over and focusing on where there are challenges.

I'm just wondering if you could provide me with some more information. I think that's a very interesting model, and I think it has opportunity for some very significant success.

M. Stenberg: I can send that to you.

J. Rustad: If you could, that would be much appreciated.

R. Hawes (Chair): Perhaps if you'd send it to the committee, that would be….

M. Stenberg: I will. I'll send it to the entire committee. Who shall I send that to for distribution?

R. Hawes (Chair): We'll get the contact information.

Our next presenter is going to be Coast Forest Products Association and Rick Jeffrey.

R. Jeffrey: It's always a pleasure to be in Surrey, the sawmilling capital of the Lower Mainland of British Columbia. I'll just start off by not recounting to you the economic circumstances facing the forest industry — and now, on a global basis, the world — other than to say that I've been in the business 25 years, and I've never seen it this bad. I've talked to the grey-haired guys — gee, that might be me too — who have been in this industry a long time, and they've never seen it the way it is. The financial meltdown and the credit crisis aren't going to help.

I'm going to talk to you today mainly about hosting conditions that are required to attract capital into the industry in a time where attracting capital is going to be a very difficult circumstance.

Before I do that, though, I'd like to say that we've just come through an election. It was very troubling, this election, from a forestry point of view, because of the rhetoric and politicization of this industry.

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It's not helpful when people say we should rip up the softwood lumber agreement. It's not helpful when federal politicians that have no jurisdictional responsibilities for log exports speak about banning log exports, not knowing what they're talking about.

There are parties in this province that have political forestry plans that are highly politicized, including things in them like taking the softwood lumber agreement to public hearings. That's kind of akin to talking to the public and asking them how to do brain surgery. It's a very complex file, and it's a very difficult file. I know; I've been one of the negotiators on it.

I'm not going to go into the facts that are in the presentation in front of you. I want to go right to the recommendations because of the time limit. But before I
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do that, I would like to say that the coastal forest industry has a future. Many people think that it's a sunset industry.

In the short term we are in survival mode. That's why you're seeing rationalization. That's why you're seeing permanent curtailments, indefinite curtailments. We have to match our productions and our operations with what the market is telling us, and that necessitates us doing those kinds of things to get through this piece. We don't like it. It's not fun. It's not fun for anybody. That's just the reality of working in a global marketplace, which is what the forest products industry is.

I'd also like to talk about the coastal industry in just a short bit. Our average market value for our products here is $825 a thousand on the lumber side. That compares to $325 in the Interior. The reason for that is that we have a very well-developed, commercially driven supply chain, from logging all the way through to pulp and paper manufacture. In that supply chain we have, as I said, commercially driven, value-added industries and a value-added supply chain that leads us to that $825.

So when we hear people talk about value-added strategies and getting more value for the product, I have to tell you that we run a margin-based business. In a margin-based business you have two options. One is to increase the value in revenue that you can derive from the products you make. The other is to reduce the costs of delivering those products or making those products.

We strive every day to move up the value chain. There are no silver bullets out there. There are no widgets that can be made on the street corner by mom and pop that are going to save the industry. That's a disservice to us as well, when we hear that kind of rhetoric continually. We have a very, very good supply chain here. It's interrelated, it's commercially driven, it's market-driven, and it works.

I want to talk to you about hosting conditions today. You are the Finance Committee. It's a capital-intensive industry, whether you're mom and pop on the street corner, or you're running a large corporation. Forestry is very, very capital-intensive. We made this point to the round table two weeks ago, hoping that we could reinforce that. I want to reinforce the point here.

That means that things government can do are things that can help or improve that investment climate so that we are able to attract the capital here that we need — on the logging side, the lumber manufacturing side, the pulp and paper side, the reman side. So what are those things?

By the way, softwood lumber does tie our hands a bit on the policy side, but the value of that agreement today is immeasurable. Without it, I can tell you that the coastal forest industry would be completely shut down. So we have to live with some policy constraints that rise out of the anticircumvention clauses in softwood. That limits some of the range of things that we think would work in terms of assistance today.

However, in that context and in a context of trying to attract capital, there are some taxation measures that you should be looking at for the forest products sector and the manufacturing sector, which is export-oriented in this province. So they work for us as well as for the manufacturing sector.

The first of that is the municipal property tax. We recommend that you specify maximum rates that municipalities…. Ratios that they can charge.

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We'd also call for a full-scale review of the property tax regime, with a view to modernizing it and simplifying it. It's a complex thing. It's not consistently applied between municipalities, and the tax rates that we pay as an industry are significantly and materially higher than those of our competitors. We think you need to look at it.

We think you should introduce a refundable plant modernization tax credit to attract investment, with carry-forward provisions for investments in CCA class 43, which is manufacturing, energy, creating types of equipment. That would help facilitate investment in a time where credit is going to be tight. We'd also like you to work with your federal colleagues to expand the application of the capital cost allowance to allow us to invest in capital and productivity.

We call for a reduction in marginal effective tax rates. The marginal effective tax rate for our forest industry still remains high amongst the G8 countries, so we have a lot to go. We're asking for this to be able to stimulate investment in new equipment, machinery, technologies so that we can drive the productivity agenda and drive the value proposition.

We also note that we pay PST on a number of business inputs. We can't in a global marketplace pass those on to our customers. We think it's high time for governments to look at harmonization of the GST and PST. As a fallback, we'd like you to expand the list of things that are eligible for PST exemptions in the business side of the world.

We'd also like provision of direct research and development grants or refundable tax credits to fund commercial business R and D. We think that should be focused on the emerging bioenergy, biofuels, greenhouse gas–reduction parts of the business.

Carbon tax. We're asking for it to be frozen right now. It's costing us $35 million this year. In 2012 it will be costing us $100 million. The freeze is to allow us to look at some revenue-neutrality options for the manufacturing sector. The one thing I will say about the carbon tax is that while we're not….

We support carbon tax, but it's being implemented in a time where we're paying it and none of our competitors are, and we have no way of recouping it in the marketplace. So there's a transitional issue here, and that's another reason why we'd like the freeze on it. Having said that, while we don't like the particular construct of this carbon tax but understand the need for it, we like the other guys' carbon tax way less.
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What are the things that we think about in terms of offsets that can help with the industry? First is company-specific refunds for carbon tax paid if we make investments that reduce emissions, reduce energy consumption or improve productivity — i.e., it's kind of like the ICE fund. We'd pay into it, and if we were going to do some kind of investments in our facilities, we'd be able to tap into that money that we'd paid to fund those investments.

We'd like to see a PST exemption on hydroelectricity for industrial users. We'd like to make sure that PST and GST aren't applied against the carbon tax. GST currently is. And there's a byzantine issue around B.C. Hydro water rates. We'd like rate increases frozen right now.

On the spending side, hard to ask for spending in this kind of climate. We know that. You have an organization called Forest Innovation Investment. They put $20.5 million into the program. We match the money. The federal government matches the money. This is used for market access, marketing, market promotion, product development, tech transfer in our offshore markets. It is building the road that we need to travel on. It's an invaluable program. We urge you to continue to ensure that that continues to be funded.

We like some of the things that government has done around six-storey buildings, green building codes. We'd like them to continue to move down that track and also to allocate funds to promote the use of wood in both residential and non-residential construction. Very valuable efforts. There is payback on that. If anybody wants, I can get a hold of them and show them what the payback is.

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And we'd like government to fund precommercial R and D. Back in the old days when we were the king of the world on the coast, MacMillan Bloedel had a little ginger group off to the side that did R and D. They developed Parallam Trus Joist, OSB, the No. 4 paper machine in Port Alberni.

This was all very valuable R and D. They were allowed to do it. They were funded. Industries, too, leaned out. We're not making money. We can't fund that kind of stuff. The government is collecting stumpage revenue and border tax revenue. We're hoping that through the existing institutions like UBC, UNBC, FPInnovations, we can continue to fund that kind of stuff in a coordinated way.

Last, I've got some economic policy things. The first one is that we'd like to see a productivity agenda from government, including a senior position in the Premier's office, to make sure that as you develop budgets, you're informed on measures that you can implement to improve productivity, ensure sustained economic performance and drive the productivity agenda in concert with other government agendas.

We worry about that a little bit. We're worried about the energy plan and the impact that the energy plan will have on our energy input costs. We're worried about the climate action plan and its potential impact, and we'd like a little bit more of a productivity or economic lens put on those things.

We have a regulatory review process ongoing right now, chaired by Dana Hayden, reporting to the Minister of Forests. We'd like that to be an ongoing process, so that we can continue to be ensuring that we're driving unnecessary regulatory costs out of the system. We also would like to see a more transparent regulatory impact statement for all new legislation regulation policy. We find ourselves quite often looking at legislation too late and going: "Hey, hold on. What about the impact of this stuff?"

Then last, you make a lot of land use decisions on a daily basis in this province. It affects the industry. We would like to see a ledger kept or a gatekeeper system set up, so that we know what the cumulative impacts of those land use decisions are. And we think that when those decisions are made we should see a cost-benefit analysis to ensure that we know that the withdrawal of that land out of forestry use has a higher and better use for society, an economic return for society. That's one of the factors that government has to make when they make these kinds of decisions. So we'd like to see that implemented as well.

I speedread that. So any questions, I'm happy to answer.

R. Hawes (Chair): Thank you, Rick.

J. Rustad: Thank you very much. Being born and raised into the forest industry myself and spending all my time around it.... I like what you've talked about here in terms of recommendations.

I just have one question for you. When you talk about productivity, one of the things that we may need to be looking at, certainly in the Interior but the coast as well, is increasing productivity off the land base, in terms of the yields that we're getting. I'm just wondering about your thoughts in terms of how we might be able to encourage that over the coming years. Obviously, given the economic times, it's tough to get some dollars invested in that. But I'm just wondering about that.

R. Jeffrey: Well, I'm a forester by training. I don't do much of it anymore, but there are significant gains to be made through genetics, fertilization, those kinds of things. The coast action plan that Minister Coleman came out with has certain elements of that. You have a Forests for Tomorrow program in the Interior for repatriating the pine beetle stuff. There are opportunities there to improve your yields.

So there is an opportunity there. The question comes down to who's going to be willing to put the money in and wait for the return on that. When you net-present-value that stuff, it's not pretty. So we need to figure a way around that. Tenure reform is probably one of those ways, and that's something the round table is looking at.
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R. Hawes (Chair): Thank you. Unfortunately, I know there are some other people who wanted to ask questions, but we've run out of time.

R. Jeffrey: That's because I talk too much.

R. Hawes (Chair): You've done a very good job here. Great presentation. Thanks, Rick.

The next presenter is the B.C. Government and Service Employees Union, and Darryl Walker, accompanied by….

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D. Walker: Chris Kinkaid.

R. Hawes (Chair): Great. The floor is yours.

D. Walker: Thank you very much, and thank you for this opportunity.

The BCGEU, as you probably know, represents approximately 65,000 men and women who work in a variety of occupations throughout the province of British Columbia — approximately 550 separate bargaining units.

We represent provincial government employees such as child protection social workers, environmental protection officers, corrections staff, forest fire fighters, administrative personnel, and liquor control, licensing and distribution. In addition, our membership includes people who work in child care, health care, community social services, financial services, post-secondary education, first nations government and highway maintenance.

The British Columbia Government and Service Employees Union is the largest union in child care and in community social service in British Columbia, and it's the third-largest in the health care sector. Our members in the private services provide financial services in banks and credit unions and work in hotels, department stores and casinos. And as I said, we welcome the opportunity to speak to you today.

We understand and recognize that challenges are obviously facing British Columbia. There are three sectors we'd like to talk about right today: the ever-increasing problem of climate change, which I'm sure you'll probably hear over and over again; the increasing disparity between rich and poor, and the struggle for more and more working families to afford the cost of living in British Columbia even as our economy continues to boom in prosperous times; and, lastly but not least, recruitment and retention issues in the labour market.

These issues promise, of course, to become only greater and greater. I can tell you that over the last couple of months we've had a number of discussions with direct government around the issue of being unable to actually hire people into positions.

The provincial government, however, provides an opportunity to address these challenges. This can be done so long as there is strong and positive leadership. Perhaps more importantly, this will require a willingness for the government to commit to a long-term view, even in an election year when the temptation might be to provide short-term answers. Climate change will not be addressed in the short term; nor will the economic realities and issues and labour shortages be solved in the short term.

A focus on short-term trends tends to look to simple cuts, to offset risks and to hope that the market will solve the problems. We have seen this approach taken too often in recent years, with government making cuts to important social services, outsourcing important government services and providing only incentives rather than real programs to effect positive change.

Too often this approach has not worked and has been detrimental to British Columbians. Instead, the British Columbia Government and Service Employees Union encourages the government to take a longer-term view. This means looking at spending as an investment. It means a focus not on short-term opportunities to merely cut but rather on long-term opportunities to create positive returns on investment.

There are ways to invest in order to provide social and ethical returns and, at the same time, provide economic returns. We believe it is the investment strategy that is required to address climate change, to increase economic opportunities, and to respond to the rising labour shortage. In this submission, the BCGEU will outline a number of ways that the government can invest in solutions. At the bottom of that page we talk about economic solutions and issues.

An open letter from Canadian economists on the current economic crisis and appropriate government responses — which was recently sent by, I believe, 85 Canadian economists to the federal government — is quite constructive, and we believe that perhaps the provincial government could have a look at it as well.

Some of the recommendations there include active leadership in stabilizing markets, stimulating investment, and supports for jobs and incomes. The economists argue that the government should ramp up public infrastructure projects, strengthen income support measures, and otherwise take active measures to bolster our economy.

[1640]

As we move to the bottom of the page, there is investment to address climate change. On page 6, there are a number of recommendations. I won't necessarily go through the entire paper — I'm pretty sure I don't have time to go through the entire paper — but some of the recommendations we would like the committee to consider.

We would like to address the shortcomings of what we perceive the current carbon tax plan to be. We believe that there are better ways of dealing with the carbon tax and that they could be more effective and fairer. As you
[ Page 2100 ]
go through this paper, you'll see some of the suggestions that we've made around what the carbon tax ought to look like.

Beyond that, we believe that the only way we're going to get the reductions we require is by going to some kind of a cap-and-trade system. I know that has been discussed by the western climate initiative, and the government of the day has been involved in some of that. There are some things there that we would agree with, but we'd like the opportunity to have further discussion around that.

We should invest more in resources that would ensure alternate practices. That would include things like research and development. So if a carbon tax is indeed something to be collected, perhaps some of that money could be used for research and development for companies in British Columbia so that we could actually come up with some alternate methods of energy.

We'd like you to rethink transportation and oil and gas, as well as the industry policies.

Oil and gas. The companies are making record profits, and yet we still see subsidies. There must be some way of dealing with that so that those subsidies could go to a more equitable way of dealing with British Columbians and the climate change issue.

The last three are very important to us. Planning should be less behind closed doors, should involve workers and certainly should involve the communities. We have put that to the folks from the western climate initiative and at this point are, I think, awaiting an answer as to whether we will be allowed to set a foot inside that door.

Lastly, we would like to talk about a just transition strategy, which would allow workers to move from one industry to another. If indeed an industry is going to be impacted and downsized or closed, there must be other industries that are coming along to take the place of it. Certainly, climate change offers many opportunities within different industries.

As we go to page 7, we want to talk a little bit about children and families and certainly about child care and child protection. Again, I won't go through it, but the top of page 9 identifies a couple of recommendations we'd like you to consider.

We'd like to have investment and a time frame around a universal, affordable and quality accountable child care system, and we'd like to see that begin relatively soon and with public funding. We believe it's absolutely essential to the well-being of our children that they are in a safe system. The labour shortage basically demands that many parents — the second parent, so to speak — often women, are required to step out of the household and work to help support our economy.

Lastly, the recommendation is to increase and stabilize funding for child protection and for child and family services and to create and guarantee greater support for front-line workers.

In health care, we would like to talk to you about community-based health care. This would include but is not limited to home support systems, residential care systems and, of course, systems that would be in place for those with mental illnesses and those with addictions needs. They tend to be the ones that are forgotten within our society, and we believe that there is an opportunity here to be able to support their needs.

In the area that we talk about in community social services and CLBC, Community Living British Columbia, we would like investment in new capital and operating funding for CLBC and the services that they provide throughout this province — committed along with a mixture of residential options that are available now, some that perhaps have not necessarily been totally discussed, and then a coherent system of community-based care.

Lastly, we would like to see more accountability in this particular area. We find CLBC to be an organization that, while funded by the government, isn't necessarily, I think…. The government hasn't taken the responsibility of making sure that the needs of the members and the workers in that section are actually seen to.

With regards to welfare, on page 11, we would like you to increase welfare rates. I know that's a pretty broad statement, but I think we have to have a look at the needs of those in our society that are least able to take care of themselves. Welfare rates would be one of those areas.

Secondly, along with the B.C. Federation of Labour, we are asking for an increase to the minimum wage to $10. I don't think that's necessarily something new.

With regards to post-secondary education — and I was encouraged to hear the first gentleman from, I think, Kwantlen College talking about the needs of post-secondary education — we would like to see a reinstitution or reinstatement of the operating grants.

That's it?

[1645]

R. Hawes (Chair): You have five minutes — just a heads-up.

D. Walker: Thank you very much. I think we'll be okay, then.

Reinstate the operating grant. I believe 2.6 percent of that grant was taken out, and I think probably reinstating it throughout the province would give us an opportunity to keep young people in their communities and going to school, certainly during the early years of their post-secondary education. We see that as very, very important, and we would like to, in time, see a freeze and a reduction around the tuition fees.

With regards to the labour shortage, the investment to address the labour shortage, we see this as an absolutely essential issue, not only to ourselves as an organization but to the government and many of the employers that are funded by the government of British Columbia.
[ Page 2101 ]

With that in mind, we would like to talk just about a couple of areas. One is to go back and reiterate around child care. The child care waiting lists in the province are horrendous right now — up to and including two years. It's virtually impossible for people to be able to put their lives on hold that long.

We believe that if we could start to train more people to get into the early childhood education system, in a very short period of time we would have people who were able to step in and start to fill those ranks. That would then, as I alluded to earlier, allow women — or men, depending on who the primary caregiver is — to come out of the household and start to work in our economy, where we so desperately need people. We would like to talk a little bit about that.

The other piece of it is that we think money ought to be spent on training so that people are more readily available to go into certain industries. There are a number of them. I'm sure that this is just like the tip of the iceberg and that many of you know what those industries are. We would like to have a little bit of discussion around that.

The last couple of pieces I want to identify, on our highway maintenance standards enforcement…. That's on page 13. Our recommendation — and the majority of these folks are our members — is that there are more staff and programs invested in by the ministry to make sure that highway maintenance is something that's actually done in an appropriate manner.

We've had in excess of 39 municipalities around the province tell us that our highways are in very, very tough shape. We want to make sure that those highways are safe when British Columbians travel on them, when tourists travel on them and perhaps most important of all, when the economy — big trucks and so on — is on the roads. We believe that if we invest in that particular area, we would get a fair return.

The last piece I want to identify is just around the openness and transparency of government. We believe it's essential, and we believe that in many ways this government has indicated it wants to be open and transparent. We want to see increased funding for both the Information and Privacy Commissioner and for the Auditor General. There may well be a few other areas where we would like to see Auditor General–type individuals who would have an opportunity, I think, to be available so that the average British Columbian could actually talk to them and bring their needs to them.

As I say, there is a good deal more in the paper itself. My hope, and my belief, is that you will go through it. If you have any questions, I'll do my best.

R. Hawes (Chair): Thank you very much. A fairly substantial presentation.

B. Ralston (Deputy Chair): Thanks very much for the presentation. Just on the open letter from Canadian economists. I think there's speculation, now that the federal election is over and given the current economic downturn, that the budget may go into deficit. What's your view of the federal government running a deficit if it's necessary, or thought necessary, to maintain employment and production if private sector investment falls off?

D. Walker: I'll tell you first off…. My personal belief in my own home is that I don't necessarily run a deficit. I try to, where I can, deal with what I have to. But there are times that I have to go to the bank and borrow money. If I have to, then I have to have some kind of a plan to make sure I can pay that money back, and it comes out of whatever I have coming in.

I think there are times when deficit financing is something that a government and indeed companies and individuals will look at. But I think they have to have an overall plan about what that means and what it looks like. Rather than just jumping in and running a deficit, I think you have to have a look at if there are other areas you can perhaps cut back or claw a little bit from.

But I think that when times are desperate, and they haven't been that way for some time, there are still people in this province and in this country that are in desperate need. I think we need to see to their needs as well as try and balance the budget. I'm not sure that I'm really answering the question. What I'm saying is that you have to have a look at all of the issues that are in front of you and then make a decision on that.

[1650]

R. Hawes (Chair): Okay. Thank you very much, Darryl. We have come to the end of the 15 minutes. You've crammed an awful lot of stuff into your 15 minutes.

Next we have the Men's Affordable Resources Society of British Columbia and Theo Boere.

T. Boere: Hello, ladies and gentlemen of the Finance Committee. Thank you for inviting me to present today. My name is Theo Boere. I am one of the directors of the Men's Affordable Resources Society of British Columbia — or MARS B.C. for short. I'm also the executive director of the Nanaimo Men's Resource Centre, and I have been since its inception in 2001.

What I would like to bring to your attention today is simply that men need help and support just as much as women do. How we support men differs dramatically from the way we support women, and we need to be cognizant of those differences and offer support in the areas where the need lies.

This is not a request for support and funding at the expense of women or women's resources. It is a request which complements the current resources we give women in our society.

We spend over $61.1 million annually for women's resources through the B.C. Ministry of Community
[ Page 2102 ]
Development and countless millions more through other ministries on programs which support women — plus millions more spent federally and through private foundations. To my understanding, the only men's centre that has received any provincial funding is in Nanaimo, and that amounted to a meagre $250,000 last year. That is less than one-half of 1 percent of provincial women's funding.

We are not saying that the spending on women's resources should be reduced. What we are saying is that that is money well spent, and we should also be spending money on men's resources to complement that funding.

Examples of why we should do this are numerous, but we as a society continue to resist doing the obvious because we think that somehow men don't need it. It's actually mostly because men don't ask. Well, the reason we're here is because we're asking now.

Let's have a look at some facts. Men commit suicide 4 to 1 versus women — 8 to 1 during the process of separation and divorce and 12 to 1 for men over 65 in the process of separation and divorce. Family violence, as reported by Statistics Canada, occurs in approximately 7 percent of women and 6 percent of men who end up abused by their current or former partners over the last five years.

Those are relatively equal numbers, yet the majority of funding for women's services is based on the principle of protecting women from domestic violence. How can we justify $61.1 million for women and $250,000 for men based on those statistics?

Then there is the family court system which awards sole custody to mothers 9 to 1 over fathers. This cuts many fathers out of the picture and is a terrible, terrible untold tragedy happening frequently in family courts across our province. Granted, the family court system is not the only culprit here. There are many barriers to involved fatherhood, not the least of which is fathers themselves.

Regardless of causes, the effects of fatherlessness in our society will continue to haunt us for many generations to come. Just look at some of the effects of fatherlessness. Fatherless children are twice as likely to drop out of school. They're 100 to 200 percent more likely to have emotional or behavioral problems. They are twice as likely to need psychological help.

Fatherless sons are 300 percent more likely to be incarcerated in a juvenile institution. Fatherless daughters are 164 percent more likely to give birth to a child out of marriage or relationship. Fatherless daughters are 92 percent more likely to fail in their own marriages. More than 70 percent of all juveniles in juvenile institutions come from fatherless homes.

[1655]

In my mind, here is the scariest statistic of them all. Children from father-absent homes make up 63 percent of all youth suicides. The factor which most of us don't know is that the most reliable predictor of crime is neither poverty nor race but growing up fatherless. To me, that is absolutely astounding. The most reliable predictor of crime is neither poverty nor race but growing up fatherless.

These statistics show one possible remedy for what dramatically affects many of the social ills that we deal with in our society today. Why are we not supporting fathers to be the best fathers that they can be?

In contrast, what we do is continue to separate them from their children through our family court system; through discouraging counselling in the separation and divorce process; through the lack of resources we provide; through hounding unemployed, disabled, sick and emotionally distraught non-custodial parents, most of whom are fathers, into financial crisis by the family maintenance enforcement program; and through creating unsupported pressure points that turn some of these men and fathers into walking volcanoes, ready to explode and do themselves or others serious damage.

If we look at the most serious incidents of domestic violence in this province over the last few years — the Oak Bay incident, the Merritt incident, the Maple Ridge incident and the number of incidents in Nanaimo — all of these incidents were of men, of fathers, going through the process of separation and divorce — distraught, with no support systems, no help and cut off from the access to their children.

Then there are the incidents of self-destruction, the multitude of suicides which deprive children of their fathers. Isn't it ironic that we need to measure those men's lives in the context of the value to their children and that their value does not stand alone? At the end of the day, the prices we pay as a society are enormous — more violence, more property crime, more school dropouts, more drug use, more teenage pregnancies and more tragedies.

Why does it appear to be so difficult for our society and for this government to see that a small investment in preventable medicine would pay itself back a hundredfold? All the research is there and has been there for decades. Australia has already begun to act and a few years ago started funding a redraft of the family justice system, together with increased resources for men. Approximately $400 million Australian has been put aside to do that.

A few years ago we heard recommendations from a coroner's jury of four women and one man that the province needs to provide long-term, sustainable funding to the men's centre in Nanaimo in order to help prevent domestic violence. That has still not occurred. A few weeks ago you heard from John Westwood and Jonathon van der Goes, from the centre in Nanaimo, detailing the 13 unique programs that we have meticulously designed to help support men and fathers in their challenges.
[ Page 2103 ]

According to a researcher from the University of Guelph contracted by the Federal Department of Justice to do an inventory of resources for men across the country…. She said that the centre in Nanaimo is the only centre in all of Canada that offers the range and breadth of programs for men that we do. That centre in Nanaimo is now on the leading edge of men's programs in this country.

We want you to support those programs and help the expansion of those resources to fathers and men who need them in this province. I urge each and every one of you to look inside and do what needs to be done here — if not for yourselves, for your sons, for your fathers, for your brothers, for your grandfathers.

For you, it is really a simple step. Recommend to the Finance Minister that this lack of resources for men and fathers needs to be a priority for this government. Recommend that the Finance Minister create funding for men's centres in this province and specifically funding for fathers in order to create support systems to help them stay connected with their children. A small investment today will go a long way and be multiplied over many future generations.

We do have some specific funding requests for you to consider. We anticipate requiring additional funding of $500,000 for the men's centre in Nanaimo. We also request startup costs for five to ten other centres across British Columbia. These new centres would need approximately $250,000 per centre in seed money to start. That's $2½ million. We're also looking for funding for at least one men's transition house, and that would be $1.1 million.

[1700]

As an alternative to creating centres across the province, a less expensive pilot project would be to start a provincial 800 number for men in crisis. This would at least begin to provide some resources for men in many of the smaller communities in this province.

Our total request for funding is $4.1 million. This request is less than 7 percent of women's funding. Isn't it time that the province began to level the playing field of available resources for men and women?

I have one last request. I would ask that a commission on the status of men be established to look into the challenges of men and fathers, to find further ways of creating support and addressing some of the inequities that currently exist for men and fathers. This has already been done in New Hampshire and has produced some interesting and balanced recommendations. In your package, by the way, you'll see their latest report.

Thank you sincerely for your attention to these important issues.

R. Hawes (Chair): Thank you, Theo.

D. Thorne: Thank you, Theo. It's very interesting. We've had, as you know, several presentations from different groups as we've gone around the province. I will admit that it's made me more aware and thinking about this whole issue in a different way.

I'm just wondering. You're aware that B.C. doesn't fund women's centres anymore. You know that, do you?

T. Boere: What I'm aware of is that there is over $60 million of funding, and most of that is for transition houses. But you have to understand that the ability to have a transition house, a location, allows those transition houses to run a number of other programs, including counselling — Children Who Witness Abuse kinds of programs. A lot of different programs are run out of those transition houses, which provide resources that are not available to men.

D. Thorne: But not for the general public, more just for the clients of the transition house. I'm in favour of funding women's centres, so that might lead me in the direction of also supporting your request.

There are two different issues. The antiviolence program and transition houses, which I fully support the money going to…. But drop-in centres, resource centres, men's centres, women's centres, whatever — at the moment there is no funding for that.

I think you should continue to push for this kind of funding for men and women so that it isn't pitting one against the other, but I think both should be funded. I think they provide a service, as you say, with resources and phone lines that can save many, many lives of both men and women. I'd like to see men and women working together to get funding for that service.

Can I just ask quickly: the presentation that you made is not actually in this package, is it?

T. Boere: No, it's not.

D. Thorne: Can we get a copy of that?

T. Boere: Absolutely, yes.

I guess I would respond to you, Diane, that I agree that services for men and for women should be available. If there are services not available for women in some of the areas that you're talking about, I would certainly support that.

We've always supported having equal services. But as it stands right now, as I've detailed, there are millions and millions of dollars going for women's services. They may not be couched in the terminology of a women's centre, but they provide all kinds of resources that aren't available for men.

R. Hawes (Chair): Without getting into this kind of debate here, as you probably know, Theo, there are a number of women's centres operating in British Columbia. Many of them do receive funding, not for the
[ Page 2104 ]
operation of the centre per se but for specific programs within the centre, which is kind of what you're talking about.

If there were specific programs designed that were going to be run by men's centres, if such were created, then I think that's the avenue in which they would find funding — to operate specific funded programs.

[1705]

T. Boere: One of the things that have been suggested to us in the past by people in government is: why don't you bid on contracts that are offered through B.C. Bid, for instance? Well, I can tell you that if you look at the 13 programs that we offer, which we have evolved over seven years now to basically fill the gaps in services, none of those programs, nor any version of them, are ever offered on B.C. Bid. It's just not out there, so it's not really an option.

The services that we're offering are unique, and somebody within government, some ministry, has to step forward and say, "Okay, we're going to carry this. We're going to push this forward," because it's not going to live without some government support.

R. Hawes (Chair): Okay. Your case has been well made, and I don't see anybody else with questions. Your compatriots at the Nanaimo Men's Centre have also made a very eloquent presentation, as you know.

T. Boere: Yes. Thank you very much.

R. Hawes (Chair): Thank you.

The next presenter is Satanove and Flood Consulting — Harry Satanove.

H. Satanove: Thank you, Mr. Chairman, and good afternoon, ladies and gentlemen.

I'm an actuary with 28 years of experience consulting to pension plans in the private and public sector. This meeting is very timely from my perspective. The markets are down. Individual investors are scared. Some of them have left the markets at a time that some financial experts consider to be the bottom or close to it.

That's just a repetition of history. Markets do have cycles. They go down. They go up. Over the long term the stock market does do better than fixed-income investments, but many individual investors don't benefit from the long-term impact of the market growth because they get out at the wrong time.

Institutional investors such as employment pension plans do benefit from long-term growth of the market. In times such as these they remain fully invested. They broadly diversify in a broad variety of asset classes. They hire professional staff. Internal staff are retained experts from outside. Over the long term external employment pension plans perform much better than individual investors.

In my opinion, employment pension plans should be encouraged, not only because they're more effective in delivering the benefits of the financial markets but because they also help ensure that people have adequate income when they leave their employment.

In Canada employment pension plans are voluntary. Employers don't have to have them. Unions don't have to have them. In B.C. the private sector pension plan coverage has declined, and it's down now to about 22 percent. That's a number that's been going down consistently over the last 20 or 25 years.

In Canada the regulation of employment pension plans is primarily a provincial responsibility. Many in the pension industry have concerns about the pension legislation that we have and the need to update it. Some of the requirements of the current legislation are particularly onerous and have been blamed for the decline in pension plan coverage.

About a year ago the government, in response in part to industry concerns, announced a joint review, with Alberta, of the employment pension legislation. The joint expert panel is expected to deliver the report sometime next month.

Although I don't have any knowledge yet of the contents of the report, the first point I want to make to this committee today is to encourage you to review and act on the report. The pension legislation needs to be fixed, so we want you to look at the report when it comes out.

Although the current turmoil in the markets has been blamed on many different things, one of the causes has been referred to as mark-to-market accounting, which means that assets and liabilities in a company's financial statements have to be adjusted to what each asset or liability is thought to be worth if traded on the market that particular day. That has led to tremendous volatility in a company's worth. This uncertainty in the value has been blamed on freezing up credit in the markets, initially in the U.S. and now worldwide.

[1710]

We have a similar problem in the employment pension system with the current legislation, with something referred to as the solvency rules, which mean that on each scheduled valuation of the pension plan the assets and liabilities are marked to market, as if the pension plan is terminated on the valuation date. If the plan has a deficit on that particular calculation, then substantive correction action is required. Pension plans that have been healthy by very reasonable ordinary standards have had to reduce benefits because of the solvency rules.

Now, unless the markets substantially retrace some of the decline so far in 2008, the valuations at the end of 2008 will bring very, very bad news, and I anticipate the pensions will have to be reduced because of solvency rules as of the end of 2008. So the second thing I ask the committee is to scrap the employment pension plan solvency rules. There are better alternatives than the solvency rules.
[ Page 2105 ]

The purpose of the pension legislation is to protect plan members. The rules are there. For instance, if a member has participated with an employer for a certain period of time, then they're entitled to pension benefits. There are rules to protect surviving spouses. There are rules required for disclosure to the plan members. There are investment standards. Pension legislation is good.

No one can argue with the objective of protecting the rights of pension plan members, but it's also important to remember that the employment pension system in Canada is voluntary. The rules in the organizations that have established employment pensions are too onerous, and if the application of the rules by the Financial Institutions Commission, or FICOM for short — the regulators — is excessively tight, then no employers or unions will set up new pension plans and other organizations will terminate the pension plans. And that's exactly what we have had. The coverage is down to 22 percent.

The pensions department at the regulator, the Financial Institutions Commission, has the responsibility for applying the legislation to assure that pensions are protected. That's their sole responsibility. They don't have the mandate for encouraging the growth of pension plans. And if you were to review the pension section of FICOM's annual report, you'd see that the entire focus of the commentary is on ensuring the protection of plan members with absolutely no comments about pension plan participation levels.

It's good that pension plan members' pensions are protected, but if the application of the rules is so tight, so excessively conservative that the pension plans are shut down, then the regulation of pension plans in fact has done more harm than good. The speed limit on the highway coming out here was 100 kilometres an hour, not 50 kilometres an hour, and you shouldn't have the equivalent of a 50-kilometre-an-hour speed limit on pension plans.

The pension legislation in B.C. does not have an effective appeal mechanism, with input from people within the pension industry with experience administering, managing, investing or advising pension plans. The regulator will do what it needs to do, but it will always take the perspective of taking the most conservative interpretation of the legislation, and it will always put on a 50-kilometre-an-hour speed limit, because that is what it considers to be the safest.

But you need an external appeals tribunal of experienced experts with on-the-ground experience with pension plans that comes with the broad context and the objectives of the rules, so that if a 100-kilometre-an-hour speed limit is safe, then make that change. Allow pension plans to flourish. Encourage their growth.

My final point, then, is to encourage you to look at the regulation of pension plans to ensure that there is an appeal mechanism, with outside expertise to balance the hard requirements of the regulator.

Thank you for making your time available to me today.

D. Hayer: Thank you very much for your presentation. Are there some other provinces or states or jurisdictions in the western world which use a similar system as you're stating?

H. Satanove: Ontario has a Financial Services Tribunal, and it does have outside experts. If there is an appeal of a ruling from the Financial Services Commission of Ontario, then it will go to appeal to the outside body.

B. Ralston (Deputy Chair): I wanted further clarification of the mark-to-market rule, because there's a lot of debate about that in the current climate. Is it not the case that it's something like the bank gearing ratio, where the banks are obliged to keep a certain level of deposits but are allowed to lend out at some multiple of that on the obvious understanding that not everyone would come and request their deposits at once?

[1715]

Is not the mark-to-market principle, in terms of…? Is the assumption at the valuation date that all pensioners are going to draw on the fund right, then, or is it not set out over time?

H. Satanove: The solvency rules specify that if a pension plan is terminated, then all of the obligations of the pensioners are met by purchasing annuities from an insurance company. Lump sums are paid out to all the plan members, so everyone is paid out at the plan termination date.

Interest rates right now are very low, so the cost of buying annuities is very high. Because of the current economic environment — and we've been going into this for a number of years — the cost of terminating a plan is very, very high. Many pension plans out there have no intention of terminating.

In the building trades, for instance, some of these plans have been up and running for 50 or 60 years, and yet the pension plan has to be valued as if it has been terminated, as if annuities are going to be purchased for the pensioners. If that isn't enough, then there is corrective action that's required.

J. Rustad: I'm certainly no expert in this field, but I just want to understand the request you have in No. 2 with regards to the solvency rules. You suggested that the rules should be changed so that the level of returns to the pension holders can be increased at this particular point because we have a suppressed market. So when the market recovers, it would then, I guess, cover off that additional rate at this point so that it can balance over that period of time. Is that what you are suggesting?
[ Page 2106 ]

The reason why I am wondering that is…. I'm just worried that if the downturn in that market tends to be longer than what is anticipated, then what does that do in terms of the protection of the members of the pension fund?

H. Satanove: The customary valuation that is done for a pension plan is called a going-concern valuation, and it's based on the assumption that the plan will continue indefinitely. It is based on the assumption that the fund will earn a long-term average rate of return. So if you have stocks and bonds in the portfolio, then there's an assumption that the stocks will probably do 8 or 9 percent over the long term. If there's 40 or 50 percent fixed income, then there's a weighted average over the long term.

Certainly, there'll be ups and downs in the market that will affect the plan that…. Presumably, even on a going-concern basis, valuations at the end of 2008 will show a negative position, so some corrective action will be required.

The issue I have is that on a solvency basis, there's an assumption that the plan will terminate at that particular time and that annuities have to be purchased at that time, which are very, very expensive, without taking the long-term view that this pension plan will continue to be in the market and should earn better than current long-term interest rates that would be required in the solvency calculation.

R. Hawes (Chair): I have a question too. So it's 22 percent penetration now in the private sector for pensions? Is that what it's down to?

H. Satanove: That's correct.

R. Hawes (Chair): How much of that would have to do with the lack of portability? People tend to move around quite a bit in the labour fields today, and pensions often are not portable. So as they move, they get paid out. I mean, they cash out their pension rather than being able to carry it with them.

H. Satanove: I don't think portability has really been an issue in the pension system. A lot of the building trades unions have pension plans, so that even though an individual may go from one job to another to another, a different project to another, they still maintain benefits within the plan as a whole.

R. Hawes (Chair): But generally, you are talking, though…. Like the union plan or….

H. Satanove: The union plans.

R. Hawes (Chair): But there are workers that will move from province to province or workers that will move into the building trades, for example, and then out of the building trades into something else. Those pensions are not portable, particularly if you have a union pension.

H. Satanove: Typically, what happens is that someone is in a pension plan, and they leave. They can take the cash value of their pension and invest it in their RRSP. Going the other way, if they go into an employer with a pension plan and they don't have any pension benefits coming in, then they're starting from square one when they go into that new employer.

[1720]

R. Hawes (Chair): Right. And as they take their money out and put it in a RRSP, it often doesn't go back into another pension plan — rolled it in.

H. Satanove: That's right.

R. Hawes (Chair): Which is why I am asking the question about portability.

H. Satanove: Portability is an issue in that it does potentially lead to the dissipation of a member's pension benefits if they keep taking money out and if the benefits are not locked in and they spend it. But it hasn't been considered an issue in whether an employer sets up a pension plan or not.

R. Hawes (Chair): No, I'm talking about the reason that you've only got 22 percent right now of the private labour force that is in pension funds. Could it be partly because there's no portability and you have workers that move around from union to non-union to different provinces to whatever, where they cash in their pensions and don't tend to continue because they haven't got the ability?

H. Satanove: That's right.

R. Hawes (Chair): Would portability, then, perhaps increase that penetration? That's all I'm asking. And is there a way to get there?

H. Satanove: Well, there are portability arrangements between existing pension plans. So if you have, say, a building trade group in B.C. and a building trade group in Alberta, then if the individual goes from one employer in B.C. to Alberta or the other way around, they do have arrangements where the benefits are transferred. So certainly, there's portability if you go from pension plan to pension plan.

R. Hawes (Chair): Okay. That's not quite what I was getting at, but that's all right.

I don't know if anybody else has any other questions.
[ Page 2107 ]

R. Lee: In a period of low interest rates, no matter if it's medium term or long term, it's to the advantage of the pensioner to cash out to…. Do you see any correlation between low interest rates and the number of people, say, shopping out of their pension?

H. Satanove: When an individual is in a pension plan and then they leave, they're given a number of options. One is to retain that entitlement to the pension. It might be, say, $1,000 per month. So they continue to be entitled to that pension when they get to retirement age. They also have the option of transferring the lump sum value out to their own RRSP, and the value of that lump sum goes up and down with interest rates.

Depending on where interest rates are, the value may be more attractive or less attractive to them. It's an inverse relationship. As interest rates go down, which they have done, then the value becomes higher. In my experience, as interest rates have come down, there are considerably more members cashing out when they leave.

R. Hawes (Chair): Okay. Harry, I want to thank you very much for your very interesting recommendations.

H. Satanove: Thank you for your time.

R. Hawes (Chair): Next we have the Independent Power Producers Association of British Columbia and Steve Davis.

Welcome, Steve.

S. Davis: Good afternoon. I have a paper here that I think is being distributed to you now. I'll read a good part of it, but a few of the quotes that are in there I may not go into in detail just for a sense of brevity. But they're there for you in case you prefer to ask questions.

As mentioned, I represent and am president of the Independent Power Producers Association of British Columbia. This is the third time that the IPPBC has made a presentation to your committee. The first time was in 2004, when we illuminated the high level of electricity imports and the costs and risks therein.

Although B.C. is still a net importer of electricity, we commend the government on taking solid steps to reverse that seven-year trend, especially last year with the recent energy plan goal of making B.C. self-sufficient by 2016.

Last year our submission responded to your consultation paper theme, which was What Choices Would You Make for a Greener Future? by showing that IPPs — that is, independent power producers — are in a unique position to help B.C. make greener choices.

Almost all of the IPP projects that are currently being developed in the province produce green electricity. They produce zero greenhouse gases, and compared with power plants in other provinces and states, they have a very small environmental footprint. In addition to helping B.C. meet its greenhouse gas reduction goals, IPPs are the least costly form of new electricity, and they generate substantial new revenue for government treasuries plus jobs for British Columbians all around the province, especially in rural B.C.

[1725]

My presentation today will describe five things: IPP jobs and investments that are happening in B.C. today; barriers to industry resulting from recent spreading of misinformation; some examples and corrections to those myths and false allegations; why IPPs and B.C. Hydro, both public and private, are both needed in terms of meeting B.C.'s electricity needs.

And the final point. I have four recommendations for your committee, including how the pace of building new generation should be considered in light of recent global financial crises.

On the first point, I'm pleased to state that today over 1,100 workers put on IPP hardhats and went to work on 18 green IPP projects located in rural areas all around British Columbia. These projects represented a new private sector investment of about $2.5 billion.

Another several hundred workers put on hip waders or climbing boots or picked up fishnets or bird- or even bat-watching binoculars to do environmental baseline investigations of dozens of new green energy projects around B.C.

Finding and developing these green electricity projects is good for the environment, good for B.C.'s economy and good for B.C. Hydro's ratepayers. But late last year we noticed that a few people started making false allegations about IPP projects and about the provincial energy plan. They said we owned the creeks, that IPPs need few environmental permits and approvals, that our priority was to sell the electricity to the U.S. and that B.C. Hydro was banned from building any generation when it was forced to buy from IPPs. This is nonsense.

Then they started to suggest that B.C. should rely on importing dirty-brown spot electricity from the U.S. and Alberta rather than returning to being self-sufficient by producing our own green electricity right here in B.C. This approach is environmentally irresponsible and economically reckless.

In the spring we saw some of these false allegations and faulty recommendations start to appear in the Hansard debates, in the provincial Legislature and in some public meetings. Those speakers either quoted or said their comments were based on two documents published last year. They were titled Liquid Gold and Lost in Transmission.

Liquid Gold was written by John Calvert, a public policy professor at Simon Fraser University, and Lost in Transmission was written by Dr. Marvin Shaffer, another professor at SFU. Both documents were very critical of the provincial government's energy plan and the role of IPPs in producing electricity to meet B.C.'s growing needs.
[ Page 2108 ]

The IPPBC found that those two documents contained dozens of false allegations and several dangerous recommendations. We refuted them in our own letters to the editor, in submissions to regulatory hearings and the public presentations. Nonetheless, excerpts started to appear in anti-IPP pamphlets, newsletters, letters to the editor and in call-in shows.

It became clear to us that those two documents were being used by political organizations and special interest groups in an attempt to justify their opposition to the government's energy plan and to have only government organizations build all of the new power plants in British Columbia.

Unfortunately, their fictional negative allegations were getting more media attention than our factual rebuttals. So to correct them and to get the facts out, we engaged Canada's top electricity policy expert, Dr. Mark Jaccard. Dr Jaccard is a recognized leader in electricity regulation and economics, and he is recognized around the world as a leading expert on the environmental impacts of the energy sector, especially climate change and greenhouse gases. There are five highlights of his bio there on your paper, but I won't go through them at this point.

Earlier this summer the IPPBC asked Dr. Jaccard to do the review. Dr. Jaccard agreed to review them in the contractual understanding that his results were to be released publicly, even if his findings were counter to the interests of the IPPBC, and that the association was not entitled to review and comment on any drafts in advance of public release. This no-review, no-comment limitation clause was to ensure that his review was independent.

On October 1 he published his analysis. It was titled Assessing B.C. Electricity Policy: Peer Review of Two Controversial 2007 Documents. On the first document, Liquid Gold, in general, Dr. Jaccard states:

"In this peer review, I provide extensive quotes from Calvert and then contrast these with real-world evidence and analysis to show that Calvert's book is at best read as a political propaganda tract rather than an independent, unbiased analysis. The author is uninterested in presenting a balanced weighing of evidence. Indeed, facts are wrong, and evidence is distorted in a manner that consistently supports a sinister conspiracy theory. This is why I would not recommend publication if this were a peer review for an academic publisher."

He counted a dozen other false allegations, but I will mention only one more in this reading today. There are three in your paper. The first one. Calvert claims that the B.C. government's energy plan will result in privatizing B.C.'s electricity system. Dr. Jaccard states:

"In fact, …under a scenario of rapid system expansion over the next 20 years, the share of private ownership in all facets of the B.C. electricity system might rise from its current level of 10 percent to about 15 percent, and certainly not more than 20 percent under the most extreme scenario. At these levels, the B.C. electricity system would still have one of the highest shares of public ownership among OECD jurisdictions."

[1730]

I will leave it to your other time and reading to go through the other points on the Calvert paper, and I'll quickly move to the comment on the Lost in Transmission paper.

Shaffer claims that the B.C. energy plan requirement for energy self-sufficiency and the acquisition of additional insurance power will lead to higher-than-necessary costs and rates to B.C. Hydro and its customers and an inflated demand for domestic IPP production. Dr. Jaccard states:

"The evidence suggests, however, that one can only reach this conclusion by ignoring the clear and substantial risk of sustained high prices for electricity from fossil fuel combustion over the coming decades for reasons of both scarcity and climate concern…. I agree with Shaffer that more risk analysis of this issue is desired. With reasonable assessment of risk, the electricity self-sufficiency requirements of the energy plan and insurance may well be the optimal approach from an economic and environmental risk perspective."

So the attacks on the IPP industry are coming from groups that are ideologically opposed to the private sector. They present no plausible alternatives to meet B.C.'s growing electricity needs. They are simply opposed to the private sector. They would rather B.C. be dependent on importing energy than have the private sector here. They would even rather have B.C. consume brown power than ally with the private sector. They say to do only public power. They say that B.C. Hydro should do it all.

Now, B.C. Hydro is good, but trying to get them to do it all is impossible, impractical and a downright bad deal for B.C. Hydro ratepayers and B.C. taxpayers.

So why is it impossible? There is simply too much to do, especially in the next several years when it is urgently needed. B.C. Hydro is already planning to spend $5.3 billion in the next five years just to keep its own facilities functioning well. B.C. Hydro is also spending another $5 billion for the B.C. Transmission Corporation's capital plan. That is several times the level that B.C. Hydro has spent over the past decade.

In addition to significantly increasing public debt, this pace of new work triggers hiring problems. B.C. Hydro has a huge number of people retiring in the next few years. Their recent BCUC filing shows that between 2004 and 2010 they are already adding 2,058 new full-time employment positions. That's a 51 percent increase in manpower just to keep their own facilities functioning well. So now is not the time for them to have to also find and hire even more people to launch and run whole new divisions to develop and build brand-new generation facilities.

Why is it impractical? Why do something you've never done before when you can get others that have already done it to compete like mad and also have them take all of the major controllable risks.

B.C. Hydro has never built a wind-power project or a biomass project or a geothermal power plant. IPPs have built dozens of each. But what about run-of-the-river
[ Page 2109 ]
hydro projects? B.C. Hydro has not built a new hydro project since 1984, and any senior project manager that worked on that project — the Revelstoke dam project — would have long since retired.

Plus, B.C. Hydro is not well-suited to develop small projects. B.C. Hydro has developed world-class big dams, but those projects are typically well over 200 megawatts, while the typical size of a run-of-the-river project is only ten megawatts.

B.C. Hydro is an excellent operator of B.C.'s overall electricity system, and their Power Smart system is applauded around the world. Not only should they not be distracted from doing those good things well, but also, the skills that are required for developing a small, remote, highly tailored and finicky run-of-river project are very different. Just as General Motors could but doesn't build scooters, it's impractical for B.C. Hydro to develop small run-of-river projects.

Stopping the private sector from building new power plants is also a bad deal for B.C. Hydro ratepayers and B.C. taxpayers for two reasons: risk and competition.

On risk. For IPP projects, any construction overrun costs fall on the shoulders of private shareholders, not B.C. Hydro ratepayers or B.C. taxpayers. For IPP projects, if a fatal flaw is found in the development phase — like the belated identification of an endangered species or lower-than-expected hydrology data or even a surprise cost escalation such that the project suddenly becomes unfeasible — then all of the costs done to date are absorbed by the private shareholders, not B.C. Hydro ratepayers or B.C. taxpayers.

On competition. A few statistics will show you how sharp an IPP's pencil has to be to win a contract from B.C. Hydro. In the most recent B.C. Hydro call for tenders in 2006, the ratio of total energy from all the IPPs that registered to bid was five times the target amount that B.C. Hydro announced that they would buy. On the current B.C. Hydro call for power, the ratio of total energy for all the IPPs that registered to bid on August 12 is over eight times the target that B.C. Hydro has announced that they would buy.

So if they all bid then, for every eight bidders, seven will lose. Only the bidders with the sharpest pencils will bid.

[1735]

With that degree of intense competition, B.C. Hydro ratepayers are the big winners, and that's the way it should be. Competition works, especially for customers. The government's energy plan and B.C. Hydro's calls for power give ratepayers and taxpayers the most competitive prices for the least amount of risk, without increasing public debt or adding to B.C. Hydro's already large hiring challenge.

Our first recommendation to your panel is that on energy policy and legislation the government should stay the course. B.C. Hydro recently filed a long-term acquisition plan, which indicates the pace of bringing on new generation. We recommend that the LTAP review, as it's called, contain a greater reflection of recent greenhouse gas legislation costs plus a greater reflection of recently announced additional electricity demand from the oil and gas sector and new mines.

It should also consider the potential significant demand from new electric vehicles and from fuel-switching. The Burrard Thermal plant should not be fashioned to provide firm energy. It is old and inefficient and a large source of greenhouse gases. It should not return to becoming a proxy for continued electricity imports.

The B.C. Transmission Corporation should be encouraged to build more wires sooner. There has been a chronic underinvestment in B.C.'s transmission system for the past 15 years.

B.C. Hydro's recent 20-year integrated electricity plan forecasts that B.C.'s electricity needs will increase up to 45 percent after all reasonable conservation efforts are made. That means that a lot of new generation is needed, and new generation, whether from expanding B.C. Hydro facilities or from new IPPs, means that a bigger and stronger transmission system is needed. Since building transmission takes much longer than building new generation, there is a major risk that the wires will not be ready for the new generators to plug in.

For this presentation, we simply recommend that BCTC be encouraged to use a more proactive approach to transmission expansion rather than the traditional reactive approach. Specifically, through your committee, we recommend the government consider these suggestions in what's called section 5 transmission review plan for early 2009.

Our final recommendation relates to the recent global financial shocks. It is too early to tell how much they will reduce GDP growth. Electricity demand growth generally parallels GDP growth, so a slowing of one usually means the slowing of another.

Some people may look at the global scene and be tempted to say: "Well, let's stop building new generation in British Columbia." That would be a mistake, mainly because most of the new generation that is being built in B.C. is not to meet forecast new-load growth but to play catch-up from the past. No large power projects have been built in B.C. for 24 years. One in eight houses is running off imported power. That is not good economic policy, and because most imported electricity is from fossil fuel plants, it is terrible environmental policy.

Ironically, for those forecasting a severe recession, building new power plants — of course at a prudent pace — is actually good economic policy. First, they take several years to plan and build, so the jobs they create today are paid by revenues that are received in latter years. Second, they are long-term assets that outlast economic cycles. Third, at least for the green energy projects that IPPs are totally focused on now, they are
[ Page 2110 ]
built at dozens of locations all around rural B.C., which is often where recessions hit the hardest.

In summary….

R. Hawes (Chair): Steve, you've hit the 15-minute wall. You've done well. It's a long paper. You've done well to go through it all, but you've left us no time for questions.

S. Davis: Sorry. I tried to read as quickly as I could. Thank you for your time.

R. Hawes (Chair): You did well. Thanks very much, Steve.

Our next presenter is going to be Simon Fraser University — Wilf Hurd.

W. Hurd: Thank you, members of the committee, for the opportunity to speak today. I want to introduce my colleague, Joanne Curry, who is the executive director of the SFU Surrey campus.

I was asked today to provide some contextual remarks about some general issues related to post-secondary education in the South Fraser region — which includes the municipalities of Surrey, Langley, Abbotsford, Delta and I guess all the way out to Chilliwack — and then turn it over to my colleague for more specific information about the campus and the need for expansion.

I thought I would just offer up some brief contextual remarks. As most of you are aware, the South Fraser region, the municipalities I mentioned, are the fastest-growing areas in British Columbia and, indeed, some of the fastest-growing in Canada. So despite the investments in post-secondary education in this region, we continue to lag behind in terms of transition rates for students from high school to post-secondary education.

[1740]

I think we're approximately 10 percentage points below the provincial average in this particular region, even though it's an urban area. And that's just the result of growth. You may have heard that other post-secondary institutions in the province are experiencing either static or declining enrolment. I want to assure you that in the South Fraser region the opposite is true. We have a school district in Surrey that still, besides being the largest in British Columbia, is dramatically growing, so there continues to be a pent-up demand for post-secondary spaces, and the region continues to struggle to meet that demand.

I should mention that in terms of the SFU Surrey campus — and my colleague Ms. Curry will mention this shortly — it has been an unparalleled success in terms of attracting students from the South Fraser region. We've far exceeded what we thought we'd be doing at this point in the history of the campus.

We do have a memorandum of understanding with the Ministry of Advanced Education to double the size of the campus by 2014, which would be, theoretically, 2,500 spaces. Our discussions continue with the ministry as to how we're going to get there, but I think it's important to stress to the committee that the cabinet and our ministry agree that there is a huge demand in this region and that we have to come together to find ways to fund it and to increase our enrolment.

I just thought I would provide some of those contextual remarks about what we're facing, with a plea that we need to expand opportunity here. Maybe I can now turn it over to Joanne to give you a more detailed description of what we're doing at SFU Surrey.

J. Curry: Great. Well, in the packages provided to you, one of them is actually our current calendar of programs that we offer as of next September. Essentially, we are full. We are at our capacity of the first 2,500 full-time students that were committed to us in 2002. In fact, we have flatline growth of our first-year class because we're growing our upper-division courses, so we have no further capacity to grow.

Highlighting the demographics, including the demographic case that we prepared with Kwantlen, is the fact that in 2016 one out of every three high school students in the province graduating will be from the South Fraser, and a recent survey showed that 23 percent of Surrey school district students have chosen science and health as their top areas of further study and career choice.

In light of this, and given our MOU with our ministry to grow to 5,000 students, we have submitted a proposal, at their request, for our next phase of expansion. The second document that you have outlines some of our plans for these areas and, importantly, includes letters from all of our major partners, including the Surrey Board of Trade, the Fraser Health Authority, the Surrey school district and many other business and community groups.

Our plans for growth are certainly to close the still substantial and growing gap in post-secondary education in the South Fraser, as mentioned, in the sciences and health sciences in particular but also the role of a research university in supporting economic and social development.

Parts of our plans are expansion of our facilities and further buildings at Surrey City Centre. This is the second downtown core in the province in Metro Vancouver, and in April of this year we signed an MOU with the city of Surrey to renew efforts to complete the revitalization and buildout of Surrey City Centre.

The plan for growth for this next phase is for 1,250 student FTEs, which is one-half of what was committed to in the MOU with our ministry. We are proceeding in collaboration with Kwantlen and other partners, and the areas that we're going to offer programs in include healthy living and sustainable health care, including programs in addictions and mental health, public health practice and chronic disease prevention. We
[ Page 2111 ]
also are proposing programs in engineering as well as in sciences.

Part of our goal, besides offering ten new programs hiring 50 faculty, is very active research programs, in health care in particular, and to date we've attracted over $10 million in research funding — federally, primarily, but also provincial research funding. With these plans in place, as mentioned, we have submitted our full proposal to our Ministry of Advanced Education, and we hope that this committee will consider the request.

R. Hawes (Chair): Thank you very much for your presentation.

Questions?

B. Ralston (Deputy Chair): I appreciate everything that has gone into creating this proposal. Certainly, the collaboration across universities and other organizations is impressive.

[1745]

Given the demographic pressure and the fact that the possible downturn may motivate others to return to education in a way that they wouldn't ordinarily do when jobs are available, are you satisfied that this goal is sufficient to accommodate the demographic pressures that you so fully describe south of the Fraser over the next ten years?

J. Curry: No, we don't believe that the 1,250 will be sufficient, even with the current demographics, without considering the downturn. Based on our analysis with Kwantlen and the University of the Fraser Valley, we had indicated probably 8,000 to 10,000 spaces were required from 2002 onwards. So we are concerned that our current capacity will be very limited.

We also have a huge role in continuing studies that often doesn't get mentioned, but we have over 1,300 students studying a management and certificate program, so it's not just for the fresh school leaver or for those that are unemployed but actually for those that want to gain full employment in the workforce.

D. Hayer: Thank you very much for your presentation. It's a very good presentation, and a nicely done calendar.

Do you have some information...? When you started in Surrey, what were the numbers for Surrey university? And then how will you change from year to year up till now? And where we're sort of heading....

J. Curry: The province hasn't released the latest transition figures from high school. You're referring to transition rates?

D. Hayer: No, the students that attended the Simon Fraser University campus in Surrey. How the growth has been, what number you started with.... Where are you now over the last few years?

J. Curry: Well, when we took over the Technical University of B.C. programs in 2002, they had a few hundred students. Since then, this year in September we have over 4,200 students taking courses with us — 20 different programs. We believe, from a Surrey school district survey, that we have had an impact on transition rates from high school to university. For example, the recent survey that was just released shows that from 59 percent in 2002 who planned to go to post-secondary, it's now up to 69 percent, which is a ten percent increase.

In terms of the students of the South Fraser that attend our university, we've seen a dramatic increase. When we started, 24 percent of our students were from Surrey. This year over 53 percent of our first-year class were from the city of Surrey — about 65 percent from the South Fraser.

So I think these early sorts of success rates and transition rates are showing that there is a lot of demand, and we're, hopefully, providing programs that fulfil it.

D. Hayer: Thank you.

R. Hawes (Chair): Your presentation is pretty clear. I don't see any further questions, so I think you made your point quite well. Thank you very much.

Next we have the Surrey Board of Trade. We have Eric Wilson and Anita Huberman from the Surrey Board of Trade.

E. Wilson: I'm the chair of the finance and taxation committee for the Surrey Board of Trade, and Anita is the chief executive officer for the Surrey Board of Trade. I'm also a partner with the accounting firm BDO Dunwoody LLP. The organization represents over 1,300 members, about 3,000 business contacts and roughly 30,000 employees. We're very pleased to be able to speak with you this afternoon.

Overall, we are pleased with the fiscal management of the province. We note the debt reduction and that the further development of the province's transportation infrastructure continues on schedule, that much of the infrastructure for the 2010 Olympic Games is complete and that the outlook for growth during this particularly difficult time continues to be better than most. We urge you to stay the course.

We have a number of items to bring to your attention this afternoon, particularly in the areas of taxation, transportation and education. First, we congratulate the government for its efforts to address the problems that greenhouse gases pose to our environment. It seems that others have been inspired to follow the Premier's lead with respect to taxing carbon emissions.

[1750]
[ Page 2112 ]

Unfortunately, the program was conceived prior to the rocket roller-coaster ride that the economy has embarked upon, and coupled with the instability in oil prices worldwide.... We believe that the rise in fuel prices alone did much to accomplish what the carbon tax was intended to do — that is, to curtail driving and encourage the use of alternative forms of vehicles, transportation and fuels.

Although the price of oil has dropped at the crude level, the price at the pumps is still relatively high. Long-term price points point to a continued elevation in the price of fuel.

Additional increases in the carbon tax, such as those scheduled for the next cycle in July 2009 will, we feel, further negatively impact the economy. It will affect the cost of doing business in all sectors. As well, the aspect of this tax being revenue-neutral is of concern to the trucking industry, which is not confident it will get back as much as it will pay in tax.

We recommend that further implementation of this program be suspended until it has been evaluated to determine if the program is achieving the desired results and whether or not further carbon tax increases are necessary or desirable. We feel that because the program was conceived prior to the current economic difficulties, it would be prudent to determine the impact of the program operating within the new economic circumstances before proceeding further.

We'd also like to take this opportunity to ask the government to investigate the impact of fuel taxes on competitiveness, particularly where local trucking companies are negatively affected from competing. Truckers operating outside B.C. have the opportunity to fuel up in, say, Alberta and enter the province. This includes the U.S. As a business organization that includes two of Canada's busiest border crossings, this is no small matter. It places both the transport and the fuel providers in an unfair position competitively and needs to be addressed.

We'd like to speak to the property transfer tax. Surrey Board of Trade has a real concern with the B.C. property transfer tax. We add our voice to that of the Vancouver Board of Trade in seeking to have this tax significantly reduced in order to stimulate more housing construction and, more importantly, to aid and make housing in B.C. more affordable. This is particularly important in the current economic climate when housing construction is being affected.

This is not in my presentation, but as food for thought, while the U.S. is felt to be about 90 percent of the way through its price correction, it's also felt that Canada — and B.C. in particular — is just embarking on its.

Neither Alberta nor Saskatchewan has such a tax. Compared to the second-highest tax regimes of Ontario and Quebec, purchasers pay 1.1 percent of the fair market value. In B.C. purchasers pay PTT equal to 1.5 percent.

Currently, the level that invokes the 1 percent rate is on the first $200,000 of fair market value in the transaction. In other words, over and above $200,000 is a 2 percent tax that's paid. This delineation was set in 1987 when the median home cost was about $121,000. The median transaction price for homes is now, as of 2007, $440,000. We support the request to raise the increase of that threshold rate from $200,000 to $400,000. This reduction in the tax could be an important stimulus for this industry as well as for homebuyers in B.C., which has the highest affordability index of all provinces.

In the areas of transit and transportation, the city of Surrey and the whole of the South Fraser region are still impacted by the low levels of transit service in the inadequate highway network. We are delighted that the highway problems are being dealt with. With the Golden Ears bridge nearing completion, the various projects of the Gateway are now getting underway. The completed sections of Highways 10 and 15 are a pleasure to drive, compared to what they used to be. We look forward to completion of the entire road network upgrade.

We'd like to take this opportunity to encourage the B.C. government to stay the course on its infrastructure programs. We strongly support the Gateway program, the South-North Fraser perimeter roads and the Highway 1 upgrades. These are critical to the development of the whole country's economy, let alone the relief of endless congestion and the related economic and environmental costs.

[1755]

Idling in stalled traffic generates far more greenhouse gas than traffic flowing efficiently. We need to move our goods and services around the Lower Mainland efficiently to overcome the estimated $1.5 billion cost that congestion accounts for each year. We eagerly await the completion of the Highways 10 and 15 upgrades, along with the opening of the Golden Ears bridge, and are encouraged with the TransLink proposal to replace the Pattullo Bridge.

We are concerned, however, that Surrey and the whole of the South Fraser region are growing at such a dramatic rate that it's seriously underserved by transit services. We are concerned that despite the growth of the region and the highway improvements, the costs of providing adequate transit in the region will not keep pace, and we ask that the provincial government ensure that appropriate and balanced transit services are provided in this region.

Regarding health care, we congratulate the government on the expansion of the health facilities in Surrey and the South Fraser region. The acute care hospital at 140th and Fraser Highway and the new emergency care facility at Surrey Memorial Hospital are important keys in creating a health care campus suitable for a city the size of Surrey.

We encourage you to invest further in this area by assisting Simon Fraser University as it moves ahead
[ Page 2113 ]
with its health sciences program. The government has brought focus to bear on healthy lifestyles, and we applaud that. We ask that you continue this focus by providing greater access to low-cost, preventative and alternative treatments such as naturopathic, chiropractic and therapeutic massage, as well as others.

Education. The key to a successful future lies in meeting the training and educational needs of our children, our youth and the newcomers who bring valuable skill sets to the country. Surrey, which is home to the largest and, I think, only growing school district in B.C., has a serious funding inequity which we feel must be addressed.

To set the scene, in terms of population Surrey is Canada's 12th-largest city and will surpass Vancouver as B.C.'s largest city. The South Fraser region is now home to 850,000 residents, over 19 percent of B.C.'s population. In 2016 one in three B.C. students graduating from high school will be from the Surrey school district, which is B.C.'s largest.

A major part of the forecasted increase in B.C.'s population is due to immigration. Among all Canadian cities, Surrey has the fastest-growing number of foreign-born people over the last five years. The number of Surrey residents who are foreign-born increased by 30.9 percent between 2001 and 2006. Surrey has been suffering from an ongoing funding inequity of amazing proportions.

An annual grant from the province, the community link grant, is designed to provide support to vulnerable children — in essence, children who face day-to-day problems of inner-city life. These are the ones who may cost business and the community money if their issues aren't addressed early. Dealing with them early and properly can alleviate many of their problems so they won't be as likely to drop out, to be in shelters or to be vandalizing the community.

On a per-capita basis, this is how the grant breaks down. Surrey, with 64,500 students, received $3.8 million or about $50 per student while Vancouver, with 53,000 students, received $8.3 million or about $158 per student. Here are some amazing per-student funding figures. Langley is $100, Burnaby is $83, and Victoria is $192. We'd like to know why they are all different and why the range is so large. That seems to be an inconsistency that should be addressed with any level of fairness or equity. We'll be very interested to hear how this will be resolved.

In post-secondary training, we've got campuses of Simon Fraser and Kwantlen Polytechnic Universities along with a host of other private college and training facilities. The Surrey Board of Trade recommends that additional funding be committed to ensure the establishment of a highly skilled workforce in the professions and trades. We must ensure that our primary and secondary schools are funded adequately to prepare the students for that next step.

Recently, funding commitments for universities were rolled back in favour of redirecting money to trades. More funding for the trades is absolutely necessary. Simply put, we need to fund both. It is most critical that we make the investment in our future by ensuring that we have an educated and skilled workforce.

Thank you for the opportunity to bring our concerns forward. There are very difficult choices to be made, and we hope that we've been of some assistance in offering our comments today.

R. Hawes (Chair): Thank you very much, Eric — a well-prepared presentation.

[1800]

B. Ralston (Deputy Chair): I wanted to ask a question about transportation. In its transportation plan the government has announced proposed expansions to SkyTrain in Guildford and down the Fraser Highway through Cloverdale to Langley. On the other hand, there are various groups in the community, such as VALTAC, that have put forward a view that a light rail might be a far less costly and, therefore, more cost-effective solution for some of the transportation challenges that we face here south of the Fraser.

I think that just today in the local paper, the CEO of TransLink was sort of musing on that possibility. So I'm wondering whether the board of trade has taken a position on the relative merits of that, in view of what appears to be a big disparity in costs.

A. Huberman: Our position is supporting light rail. With the work that the Fraser Valley Heritage Railway Society is doing in bringing a heritage railway back into the system and their support and collaboration with the city of Surrey, which includes mayor and council, the hope is that…. And I know that discussions have been had with Kevin Falcon, the Minister of Transportation, in supporting light rail south of the Fraser all the way to Chilliwack. Bottom line — our position is that we feel it would be a cost-effective method to transport people for the good of the economy.

D. Hayer: Can you explain to me what route you're looking at for a light rail system compared to SkyTrain, when they talk about the SkyTrain or light rail system? The one transit plan around $14 billion — that was coming from King George station right through 104th to Guildford. We had the highest number of apartments and some of the business there and then down to Fraser Highway and later on going to Langley.

Now, my understanding is that one other option they were looking at is using the old rail system, which is not right through where all of the apartments and highrises and condominiums are. Are you talking about the same project, or are you talking about two different projects?
[ Page 2114 ]

A. Huberman: Different — that's correct.

D. Hayer: Do you support SkyTrain expansion on 104th or a light rail system — what the province is looking at — to Guildford mall through 104th, so it services all of the highrises, apartments and the condominiums down to 152 maybe, to Fraser Highway and then later on moving to there? That seems to be a different part of this existing highrise — to service the people who are living in that area.

A. Huberman: We feel that a combined effort needs to be had. With a population in Surrey that's growing by between a thousand to 1,500 people a month, the expansion of the SkyTrain, and a combination effort with light rail that the Fraser Valley Heritage Railway Society is proposing, is something we're proponents of.

R. Lee: Your suggestion of freezing the carbon tax — can you explain that? You said it's frozen, the plan, after $1.8 billion. Or do you have some other suggestions?

E. Wilson: At this point, given the change in environment that exists since the carbon tax was introduced, what we're suggesting is that it be suspended — and a further investigation as to whether or not it's accomplishing its aims or if the rise in fuel prices is accomplishing what it was set out to do.

Is that what you're asking? I'm a little confused.

R. Lee: Yeah, the other chambers of commerce asked for freezing the plan. So those are in place already — right?

E. Wilson: Oh, we're talking about suspending future increases. So freeze it.

R. Lee: Which year — the second year or the third year?

E. Wilson: Do not proceed with the second year.

R. Lee: So it would be the small pieces? Income tax reduction would be frozen as well? So there would be no reduction on, say, from 4.5 percent…?

E. Wilson: From the carbon tax. That's a very good point.

R. Lee: We'll be keeping it at 4.5 percent instead of 3.5 percent.

R. Hawes (Chair): We are out of time.

A. Huberman: We have a copy of our presentation for you too.

R. Hawes (Chair): Thank you very much.

The next presenter is the Downtown Eastside Youth Activities Society — Anna Jones and Cannon Singh.

[1805]

A. Jones: Good evening. My name is Anna Jones. I'm the director of development for the Downtown Eastside Youth Activities Society, and this is my executive director, Cannon Singh.

I'm not too sure if you're familiar with the Downtown Eastside Youth Activities Society or not. It was founded by John Turvey, who was a survivor of child prostitution and heroin addiction. He overcame those, went to school, got an education and a degree and decided to found our organization. He also pioneered a lot of programs and was awarded with the Order of B.C. and the Order of Canada.

We have a lot of respect for him, and we've all learned a lot from him. He's attracted a lot of leaders to his organization, certainly, who are now helping other people overcome the same kind of things that he had to overcome.

I've been at DEYAS for about a year. I've never been at an organization like DEYAS. They're very unique in that their turnover rate of staff is just zero. It's just unbelievable. People are there who were hired originally 25 years ago when John Turvey was there and still with us. He saved our economy hundreds of millions of dollars. He has passed those lessons on to us. We continue to have a culture of pioneers, which brings us to why we're here today.

DEYAS has 25 years of lessons learned and as a result has accumulated this knowledge in more recent research. We have discovered a best-case approach to dealing with homelessness, mental health and addictions, which we will recommend today.

It's an approach that is meant to work in partnership with other agencies and all health authorities in British Columbia in an effort to implement proven programs that will help street-entrenched youth rebuild their lives and also prevent youth at risk from ever ending up in the streets in poverty; sex slavery; homelessness; personality disorders; drug addiction to heroin, crack, crystal meth, cocaine; alcoholism; hepatitis; pimping; property crime; sexual deviancy; schizophrenia; child prostitution; starvation; overdoses; abscesses; dirty needles; AIDS; HIV; murder; suicide; gang violence. The list goes on and on.

These are real issues that our children are facing every day, whether they're in school, whether they're your children or someone else's children living in the streets. They are real issues our children are all facing.

This is not the impression that we want to leave on the people of Vancouver, and it's certainly not the impression that we want the rest of the world to have about who we are. A good thing is that recent polls say that British Columbians care about and want to do something about these issues. Obviously, what we're doing isn't working, because the problem is growing quickly. We need some unique programming to stop the homelessness, and we
[ Page 2115 ]
need to really stop the homeless youth from becoming homeless adults.

It's important to know that people who are homeless and drug-addicted are where they are because they lack the basic skills and opportunities that most of us take for granted. They're often born into abusive homes, suffering severe abuse or suffering from severe learning disabilities and mental disorders. Fixing the problem begins with these understandings.

We must also come to know that all these issues we are facing are interconnected and ultimately stem from what Maslow called the theory on the hierarchy of needs, which illustrates that the basic need in every person is the need for safety and belonging. This lack of belonging is an observation that Turvey and our current executive director, Cannon Singh, have been sharing for years and has finally become the genesis of understanding and a popular springboard for solutions on the Downtown Eastside.

At the most recent four pillars meeting on Friday, October 3, I had the opportunity to hear Bruce Alexander, author of Globalization of Addiction. I got to hear him speak. In his talk he suggested that Vancouver's addiction problem was a symptom of a growing fragmented society.

Take a look at what's happening on the Downtown Eastside, and you certainly have the perfect example of a fragmented community. A growing reduction in funding is only adding to the competitive attitudes and therefore a fragmentation among agencies. Bonnie Fournier, a DEYAS board member, said: "Success is a coordinating of agencies." I couldn't agree with her more. We need to stop the philosophical battling between the four pillars and work as a united community.

United, we can be strong; divided, we're full of gaps and overlaps in services. The more gaps and overlaps, the less faith people have in the system. When people don't have faith in the system, they don't use the system, and they become more desperate. The more desperate they get, the more property crime, drugs, violence, sex slavery and homelessness, and so on and so on, we will see.

[1810]

If we allow these issues to grow and wreak havoc on our cities, our health care system will become even more overloaded with emergencies. Hospital expenses will continue to increase. Law enforcement costs will skyrocket as our courts and police system are tied up with petty crimes.

In the spirit of John Turvey's pioneering culture, we have conducted surveys and dug deep into research to discover what's working in other cities around Canada. We have also looked at what's working in other countries around the world. We've asked the leaders and the members of our communities what they think.

We've gathered all that information for you today. Unfortunately, it's difficult to present in ten minutes.

R. Hawes (Chair): You have 15.

A. Jones: Okay, 15. Well, we look forward to answering your questions, certainly.

If I were to sum up a recommendation in one sentence, I'd say that a comprehensive intervention program can dramatically improve at-risk youths' as well as homeless youths' life situations.

In more detail, I would say that DEYAS's work in relation to reducing the adverse health and social consequences of child poverty, homelessness and drug abuse is achievable in a three-part strategy: first, prevention education in schools and in the media targeting all youth; second, community developers available through schools for parents and youth in order to work with youth at risk to develop healthier life choices; and third, community developers also available for homeless, drug-addicted, street-entrenched youth to facilitate support, treatment and skills development.

First of all, prevention education, a campaign including posters, commercials and a publication for youth, created in conjunction with youth and distributed through all B.C. schools, that comes out every quarter would educate youth and offer advice in regards to things like drugs, stress, mental disorders, Internet bullying, life skills and how to avoid newer and very serious issues — on-line sex slavery recruitment.

The publication would empower youth to make informed decisions with good judgment. It could be produced in partnership with all five health authorities to ensure the biggest impact and the most efficient budget. Most of the advertising would be sponsored by the media — including newspaper ads, radio ads and commercials — giving the corporations the opportunity to do some powerful cause-related marketing. This is a model that was produced in Saskatchewan in 2003 with great success.

Community developers. The second part of the strategy would be hiring these workers, who are mobile outreach case managers, to do street outreach, helping homeless youth to get off the streets and rebuild their lives. They are on call and work with youth at risk in schools and help youth move in more positive directions.

These community developers would be working doing case management, outreach that is traditionally done by two different workers, who then pass youth on. Instead of youth being passed on from one to another to another and falling through those gaps, which they most often do, this person would be there to help them develop a support system and be their support system until they're ready to do that and would help them advocate for housing, get them the kind of skills that they need, help them fill out school applications — whatever it is to help that particular youth rebuild their life.

They would also be available to the schools and through the schools. Youth would be able to contact them directly if they decided that they needed some help, but they could also be referred by a counsellor.
[ Page 2116 ]
They could also provide support to parents who have youth going through situations like this and who may not understand what's going on. They could help reconnect their families.

Because this is a mobile program and is shared amongst different communities and because it's assessed on an as-needed basis through a publicized phone line or referrals, the cost remains lower than any other prevention or case management program. A little money now will pay off in the long term by integrating these homeless youth back into society and preventing youth at risk from ever getting to that point.

The program is more effective than the traditional approach because it provides experienced and skilled workers who utilize a strength-based approach, working with youth from the introduction throughout planning and implementation of their new life goals. Since workers are available to the youth, they help youth navigate complex social services and apply for housing, like I said earlier, and so on. They can also keep youth motivated and hold the youth accountable, making sure the youth are following through on their intentions.

A six-month study in Albuquerque of a program identical to this one found that teens who completed the program significantly reduced their substance abuse, depression and increased their social stability — in fact, 58 percent as opposed to 17 percent with traditional treatment.

[1815]

Throughout these past years DEYAS has become a lighthouse in the sea of addiction for many former addicts. Pioneering programs, like this community development service — the focus is on solutions — get kids off the streets and prevent kids from ever getting involved in street life, by teaching them how to take care of themselves and providing them with the knowledge and opportunity to grow in a safe environment.

How many people have to die and how much money do we have to waste before we use some common sense in our approach to dealing with the addiction problem in Vancouver? Does a social crisis have to hit close to home before it opens the right eyes? If it were your spouse, child or grandchild wasting away on the street, would you remain so complacent?

DEYAS has been and continues to strive to be the hope and anchor for many of our misdirected street youth. Please don't let these lights be extinguished. The choice is yours. I implore you to champion for this more than worthy cause.

R. Hawes (Chair): Before we take questions, could I just ask you to clarify? Your budget — is this what your ask is?

A. Jones: This is a budget just for a pilot….

R. Hawes (Chair): For the pilot for six months. You're asking….

A. Jones: Yeah. Ideally, you'd like to have at least one outreach worker in all the cities that have an issue that needs to be addressed — Chilliwack, Abbotsford and Surrey, for example.

R. Hawes (Chair): But first you're advocating that it be put in place as a pilot project…

A. Jones: Just to test and prove that it's a worthy model.

R. Hawes (Chair): …and that's a $56,000 ask for six months.

A. Jones: That's it.

R. Hawes (Chair): Okay. Questions?

B. Ralston (Deputy Chair): Thanks very much for the presentation. I appreciate the thought that's gone into it.

I think you've tried to give a little bit of a sense of the different qualities of this program, but I think many people will be familiar with the residential treatment and different levels in competence in the delivery of that service. Can you explain in some more detail just how you see this program as being different from what might currently be offered by other agencies and why you think it would be more effective?

A. Jones: Well, right now other agencies are offering outreach, which is just simply going out to the streets, building rapport and trying to refer youth to detox. If they're successful, they get the youth into detox, and that's it. There's no more connection with that youth. So the youth are depending on detox workers to motivate them to get to the next step, into treatment. Then they get into treatment or transitional housing. The same situation — get out of that, and more often than not, they're back on the streets because they really have no plan for success.

Having the outreach worker matched with case management — it's all part of the same position — you're actually taking that kid from the street, working with them throughout the entire process. You're finding out what motivates them, what their needs are, doing an intake and finding out specifically what their challenges are that they have to overcome — is it a mental disorder; is it problems at home? — figuring out what their issues are, what their strengths are, and then building upon those strengths with that youth all the way till they're ready to be independent. You're actually working with all the other agencies, in that you're referring that youth to their services, and that youth is….
[ Page 2117 ]

These youth don't have parents. They don't have respect for authority figures. It's repairing that relationship, and at the same time there's that accountability there for the youth, so that….

Can you elaborate on that better?

C. Singh: Is that answering the question, or would you like me to elaborate on that?

B. Ralston (Deputy Chair): No, I think that's a good answer.

R. Hawes (Chair): What I'd like, though, to just clarify is the skill level of these people from an educational standpoint. You know, these obviously have to be people with specific training.

A. Jones: Absolutely.

R. Hawes (Chair): Where are they getting the training, and what kind of training?

C. Singh: Staff members?

R. Hawes (Chair): Well, you're talking here about a community developer in schools in Chilliwack, as you've mentioned, and other cities if this project works. What do you see as these workers? What skill set is required?

[1820]

A. Jones: They would have to have at least basic counselling education — some kind of certificate or degree in social services. Depending, they may have different specialties. For example, our outreach worker has a master's degree in political science, but has been doing this for eight years and is amazing.

R. Hawes (Chair): Unfortunately, there are a lot of people that have that kind of education, and they don't really get paid for the education level that they bring to the job.

A. Jones: He's not. But he's that committed. Yeah.

D. Hayer: A very good presentation and detailed presentation.

How many other cities in Canada are using this type of program or one similar to this?

A. Jones: Well, that's the sad thing. In Canada there's only Kingston that's doing this.

D. Hayer: For how long?

A. Jones: Dave, from what I understand, they've been doing it for two years now.

R. Hawes (Chair): Your time is up, but you've made a very eloquent presentation. I think John Turvey would be proud of you.

Next, we have Kwantlen Faculty Association — Maureen Shaw and Suzanne Pearce. Welcome.

M. Shaw: Good evening, and thank you for the opportunity to speak with you all. We're here to talk about the priorities that we see for the 2009 provincial budget. I'm Maureen Shaw. I'm vice-president of the Kwantlen Faculty Association and also an English instructor. With me today is Suzanne Pearce. She's secretary-treasurer of the KFA and a chemistry instructor at Kwantlen.

We're here representing the Kwantlen Faculty Association. We are keen to see post-secondary education opportunities in our region available for all segments of our population. We want to ensure that our students feel confidence about their futures through their learning experiences at our institution. We also want to address the challenges we face as the newly created Kwantlen Polytechnic University.

First, to illustrate some of what we are concerned about, we want to tell you some of Emily's story. This was provided to us by Robyn Rushford, a Kwantlen counsellor who has written a report supporting students with children in post-secondary education.

S. Pearce: Emily is 24 and currently a single parent of two children, ages six and four. She first came to Kwantlen when she was 19, a married mother of a one-year-old son. She was seeking a short-term training program and had decided upon our special education teacher assistant program. Much to her surprise, she found that post-secondary education was very exciting. For the first time, she began to see possibilities that she'd never previously imagined.

She began to work towards a BA and fantasized about obtaining a long-term goal of a PhD in psychology. It was feasible. She was a star student with a cumulative GPA of 3.5 while working as a student assistant in two departments and serving as a great role model to other student parents. She convinced her husband to also begin studies, and soon they were both Kwantlen students. It was two years into her studies, and she was on top of the world.

Then her marriage broke down, and all the support she had in place slipped away. Her family, who had very strong cultural values against divorce, first harassed her and then later abandoned her, and her husband left town.

There were more problems for Emily around the corner. Her husband refused to pay child support. Her financial debt grew quickly, and she soon discovered that her student loan would not cover her rent, a car loan and maintenance, and the extra $500 a month needed for day care. That was after subsidy.

She had to get a job, and slowly a second semester slipped away from her. She thought of quitting school
[ Page 2118 ]
entirely but knew, because she was unskilled and had little work experience, that the work available to her would never provide enough income for a family to live. Emily was now amassing debt not for education but simply to live.

She then tried to take courses through distance education but encountered more difficulties and failure. Emily is now once again back at Kwantlen and slowly rebuilding, but she's still confronting life's challenges — a recent serious car accident and an illness for her son. These are still impeding her successful completion.

[1825]

M. Shaw: We all need to be mindful of the students like Emily and the struggles they face and what they go through to achieve their educational goals. For them, the biggest barrier is the financial one.

As you know, Kwantlen serves over 17,000 students enrolled in a wide range of programs that will lead to apprenticeship, certificates, diplomas and associate and undergraduate degrees. Kwantlen has always worked to be an integral part of the communities south of the Fraser River. Through our campuses in Richmond, Surrey, Cloverdale and Langley, we've developed programs designed not only to meet specific post-secondary goals for our students but also to address the incredible diversity in our communities.

We want to touch on a number of points that our faculty association would like addressed in the 2009 budget. But before we do, I think we need to talk about the financial crisis that seems poised to put provincial and national economies on the ropes. I'm sure you're all aware of what this crisis could mean for B.C.

We know that members of the minister's Economic Forecast Council have already made downward revisions in growth forecasts for 2009. There is a view out there that says that in uncertain times, government should hunker down and trim back on program spending.

However, government is our collective effort at planning and managing the communities in which we live and the future that we hope to achieve. Part of that future is going to need skills and knowledge as we make the transition from a resource-intensive economy to a knowledge-intensive one.

If ever there was a time to invest in those skills, now is that time. Post-secondary educators know from experience that when economic growth begins to stall, people look for ways to improve their future. Going back to school is an obvious and viable strategy for them.

However, it is only viable if they can afford to return to learning. The unfortunate fact is that government hasn't been making sufficient investments in post-secondary education, and that lack of funding undermines our capacity to meet the challenge we know is there.

It's all the more urgent because we know that separate and apart from the financial crisis, there is the skills crisis. A number of studies have documented this program, the most notable being a Conference Board of Canada report in June, called The Future of Work: Confronting B.C.'s Labour Shortage Challenge.

Its executive summary says:

"The Future of Work…report provides compelling evidence that the province will face an estimated shortfall of 160,000 workers by 2015, with an optimistic growth rate of 1.4 percent. Moreover, this situation will intensify beyond the next decade, underscoring the importance of increasing the continuous supply of labour through the effective employment of under-represented groups."

The report calls for collaborative leadership involving government, business, education and communities working together to build a prosperous and vibrant future for B.C. Shared goals are important, so is the willingness to invest money, expertise and time in developing the knowledge and skills of B.C.'s people. That investment can alleviate the province's labour shortages and yield important economic returns for both employers and workers.

Unfortunately, that message didn't seem to make its way into the provincial government in mid-March, when it was decided to cut provincial post-secondary operating grants by 2.6 percent. This was done without consultation in the second year of a three-year budget-planning cycle that was supposed to provide stability to the system. Instead, the operating grants were cut by 2.6 percent.

We were blindsided. On short notice, programs had to be cut back or eliminated. At Kwantlen at least five have been reduced or eliminated: the forestry program; auto trim; ESL, English as a second language; horticulture; and gerontology-based therapeutic recreation.

As well, departments have had to cut back on the number of sections that are being offered. Student services, the kind of services that would help students such as Emily, were already bare-bones. They've been scaled back even more. In fact, the young parents program has been eliminated.

[1830]

The message is that post-secondary education is not a priority. We think it should be a priority, and we ask: how do you build skills and increase learning by cutting the funding to the very institutions that are in place to deliver the skills and learning needed in our province?

The 2.6 percent cut is not our only concern. Real per-student funding has been declining for the past seven years. Our per-student operating grant was close to $7,000 in 2007-08. If that funding had kept pace with inflation over the past seven years, it should be closer to $7,300.

There was another surprise in store for us last year. The second was the change to university status for five existing post-secondary institutions, including Kwantlen. And moving from university college to university has meant many changes in governance structures and practices.

It seems that those changes were not completely thought through from a budgetary point. It did not
[ Page 2119 ]
include any additional funding, yet Kwantlen has had to absorb a whole host of new costs without any compensating increase in funding.

S. Pearce: The change in our status also raises expectations, but we are expected to do more with less. We are to continue to offer the many valuable programs we have, fulfilling our comprehensive mandate, and also to develop new degree programs with no new funding.

Kwantlen faculty members have worked hard to develop the 17 degrees we now offer, and they've done so with full teaching schedules. They've made a commitment to Kwantlen and its students, but their work has often been done, as we refer to it, off the side of their desks.

M. Shaw: We want to conclude by emphasizing the importance of investing in post-secondary education, especially in these uncertain economic times. We have specific recommendations, which we will include when we e-mail the report to you so that we don't take up your time now.

We would be happy to answer any questions you may have. There will be some more details in the presentation when it's e-mailed to you, along with some specific recommendations.

R. Hawes (Chair): Thank you very much for your presentation.

Do we have any questions?

B. Ralston (Deputy Chair): Thanks very much. You mentioned the likely prospect, if a downturn results, that people will want to return to take further education. I'm wondering whether you're receiving some confirmation of that anecdotally.

Secondly, if that's the case, what suggestions do you have to make about the level of tuition fees and how that might be adjusted to meet an anticipated influx of those types of students?

M. Shaw: Well, the same report I referenced earlier…. Robyn Rushford talked to a number of students who are struggling to improve their education while being parents, and the difficulties they face. There seem to be a larger number out there who, if they had the resources and the financial backing, would be willing to return to Kwantlen.

I think it's necessary that we target students from 25 to 50 in age to ensure that that cohort has an ability to return to learning and ensure their skills are up to date.

We would ask that tuition fees be lowered over the next five years to ensure that middle- and lower-income families can participate in post-secondary education. Studies have shown conclusively that the rise in tuition has meant a decrease in attendance from lower-income families across Canada. It is a disincentive for those from low-income families.

We also think the student grant program should be brought back. We need to make sure that students have the backing they need to finance their education. A recent study out of Stats Canada shows that B.C.'s tuition program…. We don't have the highest tuition, but we don't have the student grant program in place to assist students, which other provinces have.

[1835]

R. Hawes (Chair): Could I perhaps ask you…? I know there were a number of institutions post–March's budget that got targeted funds that were directed towards certain trades and specific health-related programs. Did Kwantlen receive any of those targeted funds?

M. Shaw: We did receive a…. We have, obviously, a nursing program, and there are targeted FTEs that we are to produce. We also have funding from the ITA. There are some new programs being put on in plumbing and electrical, and the funding has been provided for us to put those programs on. We also have a new centre for internationally educated nurses, to assess their credentials, and that funding, I think, was partly through the federal government as well as, maybe, the provincial.

R. Hawes (Chair): Okay. Well, your presentation is not dissimilar to other presentations that we've heard around the province. Thank you very much for taking time to make it, and we look forward to getting your written submission.

Next we have the Langley Teachers Association — Gail Chaddock-Costello and Susan Fonseca.

Welcome.

S. Fonseca: Thank you, and good evening. We do thank you for this opportunity to speak to you about the need for increased education funding for public education in British Columbia. My name is Susan Fonseca. I'm a secondary social studies and English teacher, and I'm currently serving as president of the Langley Teachers Association, which represents nearly 1,300 teachers who work in the public system in Langley.

On September 29 I know that you received a presentation from Irene Lanzinger, president of the B.C. Teachers Federation. She made a submission to you on behalf of 41,000 public school teachers in B.C. That presentation provided the provincial perspective and included significant data and empirical evidence documenting the need for improved investment in public education for all B.C. students. We are here to add the local perspective to that submission from our district in Langley.

We have provided each of you with a copy of the Langley Special Education Inquiry, and I do believe that many of you would have received this last February when
[ Page 2120 ]
it was released. This was the result of numerous written submissions by parents, teachers, special ed assistants and community members, as well as presentations at six public hearings held last year before three independent panellists. The chair was Mike Suddaby, former superintendent of Maple Ridge, school district 42; Nadene Guiltner, a recently retired classroom teacher and author; and Dr. Shirley McBride, retired director of special programs for the British Columbia Ministry of Education.

All MLAs were provided with copies of the report last year, and we also had the opportunity to meet with Deputy Minister of Education James Gorman and with the Minister of Education Shirley Bond. Their comments and actions led us to believe that they valued the report. Our district did not participate in the report. Last year Minister Bond publicly encouraged our local board of education to meet with us to discuss the ten local recommendations which are within the control of the board.

[1840]

The board met with us for one hour in an in-camera meeting on April 1, 2008, to hear the concerns of the LTA, CUPE Local 1260 and DPAC members of the special education inquiry steering committee. The result was a board motion to create a new local special education advisory committee, which has held one brief meeting this fall and has yet to set a second meeting date.

So far, none of the ten recommendations with respect to district-controlled issues have been publicly discussed or adopted by our board. So the significance of April 1 has not been lost on us.

Regrettably, we do not see any evidence of any concrete steps being taken to address the six recommendations which required provincial action, either, and this is why we are here tonight.

The recommendations of the Special Education Inquiry Report, which require action on broader provincial issues. Recommendation A was: "It is unlikely that important support services formerly provided by non-enrolling staff can be fully reinstated by boards of education unless the province addresses the historical funding shortfall, the effects of which were particularly felt in the 2002-03 school year."

In 2002-03, during the new era in British Columbia, which postulated that it intended to put children first, the Langley school district produced a district budget shortfall impact report — and this is included in your package in the back — which documented the effects of losing 100 full-time-equivalent teaching positions in our schools in Langley. Teacher-librarians, counsellors and resource teachers all responded with their perspectives on how these cuts had dramatically impacted service levels to Langley students at both elementary and secondary schools.

Of the 100 full-time-equivalent teaching positions cut, 13.6 were teacher-librarians, 11 of them at elementary. This resulted in a 61 percent loss in teacher-librarian services at elementary and a 24 percent reduction at secondary, leaving 16 of our elementary schools with no teacher-librarian at all. No service whatsoever.

One counsellor warned the board that in our schools the added pressures of increased class size and erosion of special needs support will foster an expanded demand for counselling services at exactly the time when counsellors are eliminated.

An experienced resource teacher wrote:

"The extra LA time which we've been asking for, for the last five years was cut this year. Now I'm the only one delivering LA services" — learning assistance — "to 387 students and managing 12 resource special needs students. Four of these are low incidence. And I'm managing the SEA" — special education assistant — "services in the school and doing IEPs and organizing the school-based team and conferencing with parents, doctors, social workers and prioritizing needs for the student learning plan and psychologist and doing screening assessments and helping teachers modify programs and dealing with crises with students. The list goes on. Somehow, somewhere, there is some direct teaching that goes on too."

The following is just a list of a few of the comments made by Langley students when the LTA and senior management visited three of the schools to conduct interviews for the district's budget shortfall impact report.

A few quotes from students: "I'm just another face in that class." "The principal doesn't smile anymore." "The teachers are all stressed." "I'm having to take geography 12 by correspondence to graduate, because they didn't offer a class at my school." "Mr." — blank — "used to be the librarian. My sister misses his stories." "The school stopped ordering magazines for the library, and there are not as many books in the library."

"There are more split classes. In split classes it's harder to concentrate. It's confusing who's assigned what." "When I need help I don't ask, because I see the teacher is working with kids who need more help than I do." "Class sizes are way bigger. We have 34 now. It's very crowded. You have to turn sideways to move. The teacher has a hard time teaching and controlling."

In its board news update on December 15, 2004, the district announced an anticipated shortfall of $1.13 million for the 2005-06 school year. Its budget report noted that scarce resources have already stretched services, programs and staffing, and the impact of any level of reductions will further erode the district's ability to provide quality education to Langley students. In the past four years, budget reductions have totalled almost $12 million.

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As we see from the conclusions in the Special Education Inquiry Report, these services have never recovered to their previous levels. Further formula funding changes last year for per-course funding for secondary students created further instability for districts, including Langley. How can districts plan budgets in advance when they do not know which courses students will choose to take?
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The second recommendation was that, intentionally or otherwise, the province has minimized the importance of programs and services to students in high-incidence areas — sometimes called grey-area students — and gifted students by changes to the funding formula which have rolled these into the general per-pupil grant. This does not mask the fact that these areas have been chronically underfunded for some time.

Changes to the funding system for students with special needs introduced on March 1, 2002, moved into the student base allocation a significant portion of those resources that in the past had been part of the special education supplement. This included funds that were previously identified as part of the special education core allocation — funds for learning assistance, special health services and supplementary funds for students who are identified as having severe learning disabilities, mild intellectual disabilities, students requiring moderate behaviour supports and students who are gifted.

All of these funds, which had previously been specifically targeted to help these students, were moved into the per-student grant. With the huge cuts to the district's overall funding and the stripping of the teachers' collective agreement language, with staffing ratios — we used to have staffing ratios for class size, composition and caseloads — cash-strapped districts such as Langley cut services to students to balance budgets.

Between the '01-02 and '02-03 school years there was a decrease in the numbers of special education teachers — 15.71 FTEs; all teachers, over 100 FTEs; and education assistants. As the report notes, this was presumably brought on by the impact of an unfunded provincial collective agreement.

Page 4 of the inquiry report includes tables with data on the number of reported students with special needs by grade in school district 35 and the number of students with special needs by category.

It's worth highlighting the dramatic decline in the number of gifted students in Langley. We went from 363 gifted students in '03-04 down to 98 in '04-05. This follows a provincial declining trend, but the drop in Langley was more precipitous. We believe that the decline is reflective of the lack of funding for these students, not the fact that they no longer exist in our system.

G. Chaddock-Costello: I'm Gail Chaddock-Costello. I'm first vice-president of the Langley Teachers Association, and I'm also a member of the B.C. Teachers Federation executive as a member-at-large.

Briefly, because we have not much time left, I just want to give you the highlights of a couple of recommendations from the special education inquiry. One of the recommendations was around the ministry's own policy of inclusion and the fact that it's being undermined by the lack of resources to support regular classroom teachers. I'll give you an example from this year.

One of our schools has a split grade 4-5 class with 28 students. In that class of 28 there are 11 ESL — English-as-a-second-language — students, and embedded in that are five refugees. There are three students who have severe learning disabilities, one student with a mental health issue. Two are identified as intensive behaviour–disordered, and five students are functioning well below grade level and require learning assistance.

During the Bill 33 consultation for this class, the teacher and staff rep requested the administrator's rationale for exceeding Bill 33 class size limits and class composition limits, and they were told by this administrator that he was unable to provide any rationale. Nevertheless, this class was included in the superintendent's report, which was presented just last evening and was accepted by the board of education at its meeting on October 14, 2008.

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Again, we wonder why Bill 33 was ever introduced. There is no funding to support it, and regardless of whether classes are over size or over composition and regardless of the composition, those classes are duly reported by superintendents in reports to their boards, and then the boards duly accept them. The only thing that does not duly happen is the provision of any support to teachers and students in classes such as the one that I've just represented to you.

We are also concerned about the cost and the workload implications for increased assessment generated by the mandated secondary examination process. In 2004 the ministry mandated additional exams at the grade 10 and 11 level. Nobody passed that by the resource teachers in our district, who do all of the work to prep special education students by completing adjudication forms. Some of those forms are here in front of you.

For those of you who do not know what an adjudication form is, it is a lengthy document that must be prepared each time any individual identified student writes a provincial exam. It requires a knowledge of the student, forms being completed, the filing of the student's latest psycho-educational assessment, the arrangement of a tutoring time schedule, and time for a SEA to work with that student. It's a long, lengthy, involved process.

Additionally, at the time when caps were lost, caseloads were rising, the government downloaded this additional workload onto our resource teachers. If you look at that for schools that have gone into a semestered system, they now get to do that two or three times a year.

Bill 33 has had many negative and unintended consequences for access by students with special needs. This is most obvious at the secondary level. In Langley this year, last night the numbers that were presented by the board and by ourselves…. Langley school district reported 91 secondary classes that have more than 30 students, which we understood was the cap under Bill 33; also, 261 secondary classes with more than three identified
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students — and some of those, I might tell you, rise as high as 14; and 22 classes which were both over the class-size limits and over the composition limits.

When we look at this, we have a concern, also, that the district numbers that are presented in the superintendent's report do not match the forms and files that came to us at the Langley Teachers Association by classroom teachers. We have higher numbers than were presented last evening.

When we look at Langley Secondary School alone, which was recently reconfigured and took in the students from H.D. Stafford Middle School, we have 106 grievances from one high school alone. These are grievances that have been filed with the B.C. Teachers Federation. They're provincial class-size grievances, which will be heard this fall — so 106 grievances this September alone from one high school.

We are really concerned that Bill 33 has never been properly funded. We wonder why it was ever introduced.

We look at the move by the Finance Committee to address the lengthy time delays in completing assessments on students with special needs. Anybody would think that that would be a situation which would deserve being applauded. In fact, if the resources to go along with the support — which will clearly be identified when those assessments are completed — were there, it would be applauded. At the moment, right now, we see it as just another project that will produce work and more long lists of students who are on wait-lists and yet to receive services.

In the same Langley Secondary School that lost its grade 8 and took in the students from H.D. Stafford Middle School, this was an entire reconfiguration process which affected nine schools. This reconfiguration process was introduced in the fall of 2007, was completed against the public's will in the spring of 2008 and has since dislocated and affected over 3,000 Langley students and their families.

Minister Shirley Bond's constant response is that we have the highest funding ever in education. Well, when it's adjusted for inflation, and we look at the amount of money actually going in on a per-pupil ratio, she is incorrect. It may be the highest number of dollars; it is not the highest per-pupil funding. It is not the highest amount of funding that has ever been added or advanced towards education.

Unfortunately, it's not finding its way into Langley classrooms. If you look at the statistics, we have a higher ratio of students to teachers than we've ever had, and we have a lower ratio of teachers to administrators.

R. Hawes (Chair): Your presentation is very compelling. We will read it, but I'm sorry, you are over time.

G. Chaddock-Costello: Thank you for your patience. Can I say one last sentence?

R. Hawes (Chair): Of course.

G. Chaddock-Costello: I'm sorry, I'll be quick.

In here you will find six provincial recommendations of the Langley Special Education Inquiry, and it would be a suggestion from us to you that these recommendations are a good place to start when we're looking at reviewing what needs to happen in education.

Thank you for your patience and your indulgence.

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R. Hawes (Chair): Thank you very much for the work you put in.

We now are going to have a presentation from the B.C. Healthy Living Alliance, with Jean Blake and Mary Collins.

Good evening and welcome, Jean and Mary. The floor is yours.

J. Blake: Thank you to the members of the Finance and Government Services Committee for this opportunity to present the views of the B.C. Healthy Living Alliance with respect to the 2009 provincial budget.

I'm going to give you just a little bit of background on the B.C. Healthy Living Alliance to start, to give you the context. You may well know a little bit about us. We were established in 2003, and we are the largest health promotion team in B.C. history.

Our members include the B.C. Lung Association, the B.C. Pediatric Society, B.C. Recreation and Parks Association, Canadian Diabetes Association, Canadian Cancer Society, Dietitians of Canada, Heart and Stroke Foundation of B.C. and Yukon, the Public Health Association of B.C. and the Union of B.C. Municipalities.

Our vision is a healthy British Columbia, and we've been working to make this vision a reality with our initial advocacy report, The Winning Legacy: A Plan for Improving the Health of British Columbians. You may have seen this. We first presented this report to the B.C. government in 2005. We haven't included it in your package again, but I just wanted to reference that, because the government really has responded quite positively to many of these recommendations, including removing junk food from the schools, tightening controls on tobacco and reintroducing physical activity into the school curriculum, among other recommendations.

As a result, we also received a very generous $25.2 million grant from the government. Using that money, we have undertaken 15 provincewide initiatives that support healthy living in three areas: improving opportunities for British Columbians to live smoke-free, be physically active and make healthier food and beverage choices.

Our initiatives complement the activities of ActNow B.C. by building capacity at the community level so that health-promoting efforts can be maintained over the
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long term. This is essential if we are to realize continuous improvement in the health of British Columbians and the sustainability of our health care system.

We're also pleased with the recent creation of the Ministry of Healthy Living and Sport and the introduction of a whole-of-government approach to healthy living. Both are recognized as exemplary approaches in health promotion. They provide a broader platform that allows the addressing of underlying social determinants of health, to reduce significant inequities in health, which persist, unfortunately, among British Columbians.

This year we know we've come to you at a very challenging time. We don't underestimate the difficult task that you have in terms of balancing all the ever-increasing demands on the provincial budget while at the same time being faced with the potential impact of the current tumult we have in our economies on the revenue side of your equation.

However, we do continue to assert that it is essential to take action on those factors that influence the health of the people of our province and that are contributing to ever-growing health care costs. The costs of treating illness consume an ever-increasing percentage of the total provincial budget, and they will continue to do so if we do not move ahead with programs, incentives and tools for British Columbians to take necessary actions to live healthier lives.

In terms of encouraging British Columbians to become physically active, we once again recommend that at least 7 percent of all infrastructure funding allocated to urban transit, road and other transportation construction be set aside for active transportation infrastructure such as bikeways, walking paths and traffic-calming measures. The $31 million announcement recently by the premier for Bike B.C. is a great start, but more investment is required.

Reaching our school-age children and helping them develop healthy eating habits will be key to our future success as a province in meeting our healthy living goals. Childhood obesity rates are still escalating and are a major concern as they contribute to the higher incidence of many chronic diseases later in life.

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Many excellent programs are underway, such as Action Schools, the Way To Go and the B.C. school fruit and vegetable snack programs, as well as our B.C. Healthy Living Alliance initiatives, which are rolling out in schools and communities across the province. Dedicated and ongoing funding for multi-year programming is required to enable organizations involved in such programs to influence behaviour shifts in the school-aged population.

We have in the past asked for action on tobacco regulation, and the government has responded — thank you very much — with new and tighter restrictions on smoking in public places and in automobiles with children. B.C. has the lowest rate of smoking in Canada, but there is still room to improve, especially among vulnerable groups and young adults.

We once again ask the government to subsidize nicotine replacement programs for all smokers who are ready to quit. For example, the government could build on the successful pilot program delivered to income assistance recipients by the Ministry of Employment and Income Assistance or could consider a model as adopted by the province of Quebec, which is strongly supported by the Canadian Cancer Society.

As well, we would like to see the tax loophole closed, which continues to exempt roll-your-own tobacco from some of the excise taxes on cigarettes, and to use these revenues along with others from increasing taxes on tobacco products to support actions that would help smokers quit.

Finally, we congratulate the government on the Premier's recent announcement to establish a task force to investigate options for increasing access to fresh produce in rural and remote communities. We know what a struggle it is for residents in these communities to make healthy food choices when fresh produce is so limited and costs are so very high.

This brings me to our next recommendations. I'll ask Mary Collins, the director of the B.C. Healthy Living Alliance secretariat, to share them with you.

M. Collins: Let me reiterate what I'm sure you're already familiar with, and it's confirmed in many widely known international WHO and Canadian studies — the recent one by Canada's chief public health officer — that disadvantaged populations have increased susceptibility to a broad range of chronic diseases.

This is also true in B.C. where, for example, men from the lowest-income group are almost five times as likely to develop diabetes as those from the highest-income groups. Well, for women it's double. And the rate of heart disease in B.C. for women from the lowest-income group is three times higher than those in the highest-income group. For men, it's double.

We know that much more could be done to help our most vulnerable citizens live healthier lives. And as we advocated in the Winning Legacy, and again last year in our budget submission, BCHLA recommends that a dedicated long-term B.C. health promotion fund be established to support programs and initiatives that will make a difference in the lives of our most vulnerable and at-risk populations.

This will require continued funding of such successful programs as StrongStart, CommunityLINK and Honour Your Health challenge as well as new initiatives which take into consideration the underlying social determinants of health and utilize an integrated and comprehensive approach to effectively address them.

In this context we also request that the government consider ongoing funding to sustain BCHLA's integrated
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and collaborative approach to health promotion. Based upon the outcomes and evaluation of our current initiatives, which are scheduled for completion by the end of 2009, we believe we can continue to be an important partner in helping to achieve the province's health goals. Our specific request is based upon an estimate of a $10 million annual contribution to enable this collaborative evidence-based work to continue.

Finally, let me say a few words about what our findings tell us about the importance of addressing the social determinants of health. We call them the causes of the causes of so much of our chronic disease.

These social determinants — access to income, affordable housing, healthy food, education, early childhood development and recreational opportunities — influence our ability to make healthy choices and, ultimately, the state of our physical and mental health. They are responsible for almost half of the variation in health outcomes which exist in our society and therefore act as a significant driver of health care costs.

The B.C. Healthy Living Alliance recently prepared a policy discussion paper, Healthy Futures for B.C. Families, on this topic, and we held a policy forum on October 2 with experts and representatives from a wide variety of fields — from government, health, education, business and others — to discuss these issues. We'll be providing the government with a fuller brief on the outcomes of this work, but I'd just like to highlight that what emerged were four highest priorities for action.

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First, the B.C. government should develop a health equity plan with specific actions and investments and targets to reduce health inequities.

Second, as in Newfoundland, Ontario and Quebec, the B.C. government should establish a poverty reduction strategy. We would suggest a target to reduce the number of children and families living in poverty by 50 percent by 2017.

Third, a priority in government spending should be to support early childhood development and parenting services and programs. Studies estimate that one dollar invested in early childhood development generates two for the economy, and there are many other arguments and rationales to support that kind of investment.

And fourth, the B.C. government, along with other public, not-for-profit and private partners, should provide the necessary funding and coordination of efforts to ensure the availability of a full spectrum of housing for those in need.

We must say that we're not alone in our concerns, and we're sure you've heard these from many others. We know, for example, that in the presentation to this committee by the Business Council of B.C. they, too, were persuaded that additional public resources will be required to address B.C.'s most pressing social issues: homelessness, substance abuse, mental health challenges and low levels of literacy.

Now, we recognize that the investments required to implement these recommendations on the social determinants will not in many cases come from the budgets of the Ministry of Health or the Ministry of Healthy Living and Sport but from other ministries and the whole-of-government approach. Over time, however, the government and the people of British Columbia will benefit from such investments.

As the pressures on our health care system are moderated, there will be greater health equity among our citizens, and more British Columbians will be able to live healthy lives and reduce their risk of early and preventable chronic disease.

We thank you for your attention, and we will be sending you a more fulsome submission outlining some of the background of our recommendations in the next few days as well.

R. Hawes (Chair): Thank you very much for your presentation.

B. Ralston (Deputy Chair): I was very struck by your recommendations from your policy discussion on October 2. Certainly, they're confirmed by the progress report's comments on the social condition and the ongoing place of British Columbia as having the worst child poverty record in Canada for five years in a row.

You recommend establishing a poverty reduction strategy like Newfoundland, Quebec and Ontario. Why do you think that would be effective in achieving the goal that you set out there?

M. Collins: I think you have to have a strategy, because again, this involves many partners. It's not owned by any one ministry. It's not owned even by government. There needs to be a comprehensive, integrated strategy that sets targets and goals, because otherwise we're just kind of wandering around, not quite sure what we're doing or if it's really going to have an impact.

Certainly, for example, in Ontario they've established a poverty reduction strategy with a minister responsible. We know it's long term. This does not happen overnight. But to get started, you'd need to have that plan and that strategy.

J. Blake: I think also, as Mary has already commented, it is complex. It involves a number of ministries and a number of partners, and unless there is that overarching strategy, moving forward towards that poverty reduction is less likely to happen.

R. Hawes (Chair): I have a very quick question for you regarding healthy living. You mentioned tobacco, but mine is regarding alcohol and alcohol consumption.
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We've had presentations this year and last year that recommend that if you look at the pricing structure right now in alcohol, particularly beer and coolers, the higher-alcohol-content ones actually cost less than the so-called light- or lesser-alcohol ones.

The suggestion from Dr. Kendall and others is that we reverse that and make the lower-alcohol-content beers, etc., cheaper than the higher-alcohol ones. If people are going to drink, we should be actually promoting the lower-alcohol content. Would that be something you would endorse?

J. Blake: We haven't actually addressed alcohol consumption. It's not really part of the mandate or position of any of the members of the B.C. Healthy Living Alliance, so that isn't something we have addressed in either The Winning Legacy or in our current position paper. That would be something that we would be certainly open to learning a little bit more about and as a group then presenting a position.

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D. Thorne: I just want to say that this is fabulous. I love the new holistic approach to healthy living. This is something that nobody can argue with.

In No. 3 — where you talk about supporting early childhood development, parenting services and programs — I'm just wondering what your position is on child care. Is that what you're talking about with parenting services and programs?

M. Collins: This is particularly focusing on early childhood development. Of course, we're lucky in B.C. We have Clyde Hertzman in HELP and so much evidence and so much wonderful work that's going on here.

We also support child care. That is part of our larger brief. But this particular one about early childhood development came out so strongly as a consensus recommendation from the conference.

D. Thorne: I actually see them as the same thing. Child care and early….

M. Collins: Yes.

D. Thorne: I would really like you to include that in No. 3 — just those two words.

M. Collins: We do in our brief.

D. Hayer: Thank you very much. It's a very good presentation.

I have one question that constituents ask me often. When you talk about poverty reduction and the number of kids in poverty…. Many people say they are working in the cash industry, where when you file income taxes — right? — the income is shown to mostly come from cash bases. When you look at the asset base and maybe how they're living and where they're living, it doesn't reflect the income that's shown. They say: "Look, Dave, some of it is also reflected in how the system has kept the kids." Some are actually on low poverty. With other ones, maybe parents don’t because the parents are making cash income.

Do you know of other places that have done some sort of calculation so that you don't just use the income as filed in income tax — maybe asset value or equity or bank accounts or the cash there — to find out if the kids are on the poverty level or not?

J. Blake: No, we're not aware of any systems that would address that, but our research does show that when you're looking at calculating children that are living in poverty situations…. I think we went down from 27 percent to 25 percent this last year, but it's still not a very enviable statistic. They are looking at housing. They are looking at ability to afford food, ability to afford just basic necessities of life. It goes beyond just looking at pure income of the parents, I believe.

R. Lee: On page 4 you mentioned about a $10 million annual contribution. Can you talk a little bit about how to spend…? Where is the $10 million going? I don't think it's all in the promotion, but for some programs.

J. Blake: Well, we based that on the four strategies that we've currently employed with the $25.2 million that we're given as a one-time grant. We created strategies around healthy eating, physical activity and tobacco cessation as well as community capacity or sustainability building — engaging with community partners on a grass-roots level. So that project was about a two…. Some of the projects were three years. So looking at sustaining some of those projects…. That's where that $10 million figure came from, on an annual basis.

R. Hawes (Chair): Your presentation has been very good, and we look forward to the more fulsome presentation that I assume we will get by the 24th.

M. Collins: Yes.

R. Hawes (Chair): Thank you very much, and thanks very much for what you do for everybody in B.C. You guys do good work.

Next we have the Coalition of Child Care Advocates — Rita Chudnovsky and Crystal Janes.

R. Chudnovsky: Thank you very much, and we once again welcome the opportunity to be here. I also want to introduce Susan Harney, the chair of the Coalition of Child Care Advocates, who is with us tonight as well.

So Crystal can now begin.
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C. Janes: Over the years we have made the case that the early years matter. Quality care is good for children; poor care can do harm. While parents and caregivers have known this for a long time, over the last decades the research has caught up with the lived experience and is now indisputable.

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B.C. families need child care. A growing majority of mothers of young children are in the workforce, and they are here to stay. Their children need quality child care. Also, investing in child care makes good economic sense. National and international cost-benefit studies confirm that if policy-makers could project beyond their own terms in office, they would jump at the long-term savings that public investment in quality child care will bring. Other jurisdictions do it; so can we.

Last year we took the step of doing the government's job for you by costing out a universal child care system for children aged one to 12 years, a system that would bring parent fees down to no more than 20 percent of the total cost and pay early childhood educators a living wage, a system that would provide parents with a full range of choices in their communities — part-time or full-time care in education programs located in centres, schools and licensed family homes. We demonstrated that B.C. has the capacity to build that system.

These arguments are equally valid today and, on their own, make the case for choosing child care as a top priority for B.C.'s 2009 budget. But this year there are two arguments that make the need to choose child care even more compelling.

R. Chudnovsky: The first is that B.C. child care is now in crisis, a crisis that is being felt in communities across this province and that we trust many of you are hearing about in your own community.

The current crisis is a direct result of failed federal and provincial policies. In 2002 B.C. cut $40 million from its own child care budget, a cut which remains in place today. Dedicated child care transfers from the federal government saved child care services in B.C. from complete collapse, but in 2006 what was then a newly elected government cancelled the largest of the child care transfer agreements.

B.C. was the only province in Canada to pass the federal cuts on to families and service providers, and B.C. was the only province in Canada to spend the remaining federal child care funds, close to $100 million, on untendered grants and one-time-only expenditures — booster seats, healthy baby DVDs, home visiting and parenting programs, and research on children and risk — some of which are useful programs but none of which helped to strengthen child care services in British Columbia.

As a direct result of these failed policies, parent fees went up, wait-lists grew and wages for early child care educators dropped, forcing many to leave the field. In fact, we just learned today that the Whistler child care society is being forced to close down some of its programs because they cannot find people to hire to staff the programs.

Communities have done the best they can, but it is no surprise that in a recent national poll conducted just last month, 85 percent of British Columbians see lack of affordable child care as a serious issue — well above the national average of 77 percent, which is high enough on its own — and 90 percent of British Columbians think that government has an important role to play in helping families meet their child care needs — again, above the national average of 83 percent.

The message to you is clear. A significant majority of British Columbians expect that you will finally act on child care. The second new argument, interestingly, comes from B.C.'s 2008 throne speech, in which the government introduced the idea of expanded full-school-day kindergarten and early learning programs for three-to-five-year-olds.

If this throne speech commitment reflects a new provincial commitment to universal, publicly funded and democratically controlled services for young children, the Coalition of Child Care Advocates of B.C. views it as a victory for those who advocate on behalf of young children and working families.

We have provided detailed comments to the new Early Childhood Learning Agency about the key elements government needs to include in any expanded program for young children, and we're happy to share that with you. But today we want to focus on the budget implications of this potential new development.

We understand that the Treasury Board is most likely already considering how much B.C. will invest in expanded universal programs for young children. Part of your job is to ensure that the funds allocated to these programs are spent in ways that will really meet the needs of children, families and communities.

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First, dollars need to go into programs that integrate care and learning rather than into programs that continue to divide B.C.'s early learning and child care services. Only by integrating care and learning and program delivery will we be able to meet the developmental needs of young children and the needs of working families. Then dollars need to be invested in ways that build on community strengths rather than in ways that further destabilize already fragile child care services.

The best way to achieve these objectives is through public funding at full parity for early learning and care programs that are delivered in both public and non-profit schools and community-based settings.

Given the 2008 provincial throne speech commitment to full-school-day programming, we would expect that this would require a minimum entitlement of 30 hours a week of free, universal, publicly funded services
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for young children. That includes the standard five-hour school day and a fully staffed lunch hour, as is obviously required by younger children.

Those requiring more than 30 hours a week of learning and care would still pay for the additional hours, at least in the short term, but the cost of quality child care would come down significantly.

Equal public funding for school- and community-based programs will also make it possible for child care centres to recruit and retain qualified staff with expertise in working with very young children, as they'll have the funds to pay a living wage. While more spaces would still be needed, using existing child care spaces in the community will reduce the cost of renovating schools to meet the needs of three-to-five-year-olds.

Again, the message is clear. If done well, expanded, publicly funded, universal early care and learning programs can move us forward.

Finally, we know that there are those who will suggest that the current economic uncertainties mean that once again publicly funded child care should be shelved. We could not disagree more. During difficult times our collective responsibility to help each other is more important than ever. In fact, if we really care about healthy child development, we have no option.

As we speak today, the stress on families is increasing. I just refer to the story about Emily, who you heard about earlier, who couldn't continue her post-secondary education for a number of reasons, of which one was clearly the lack of affordable, available child care. Now is the time to provide communities with the tools and resources they need to build a child care system that supports families, both as parents and as workers.

Last but from this committee's perspective not least — and, as I note, we have heard reaffirmed by the presentations that we've had the pleasure of hearing before us tonight — it is clear that investment in high-quality, universal child care services today will strengthen our economy and our communities tomorrow.

The reasons to make the right choice and invest in child care only continue to grow. Now it's up to you to act.

R. Hawes (Chair): Thank you for your presentation.

D. Thorne: Well, I thank you. I happen to know one of the speakers, so I'll read it into the record that I absolutely agree and have worked as hard as I can to make what you're saying in this paper happen in British Columbia.

You've said everything in here. I'm going to ask you…. This is sounding to me like more and more of a crisis every time I hear you speak. Is there a certain point…? Are we at the point now where it's a breaking point, and if we don't move ahead in this province and actually make a commitment to child care, it could be too late?

You're saying that you can't get staff. People can't work in the field because they can't afford to. People can't afford the fees.

I have a friend who put her name on a waiting list in Coquitlam for child care when she got pregnant. She has a baby. The baby is about seven months old. She is still not back at work because she still can't get into any child care centre. She's been on a waiting list for that long. She's in crisis. She's not poor. I'm not talking about a single mother.

Are we there? Do we have six months? Do we have a year? Or are we there now?

R. Chudnovsky: Diane, you've known me long enough to know that I would never say that it's too late. We wouldn't be here if we thought it was too late. But we do need to tell you that we're not crying wolf.

This fundamental building block that makes it possible for families to go to work, that makes it possible for employers to find people to hire — not only in child care — and that makes it possible for communities to survive is in deeper trouble than I've ever seen it. The field can no longer make do and patch it up.

[1925]

The impact is being felt on children who aren't getting access to quality care. You just had the B.C. Healthy Life Alliance. The research and the expertise and the recognition that quality early child care and learning is as fundamental a building block of our communities as any other piece of things we've traditionally called infrastructure — everybody gets that now. It's not clear that this government yet gets it, but everybody else gets it.

The field is in a more difficult space than I've ever seen it. The issue that at this moment has absolutely risen to the surface — that will, if anything, bring it to a grinding halt — is the staffing crisis, the recruitment and retention crisis.

People in this province with a college education are working for $12, $13 an hour on average. They cannot afford to live on that. They cannot afford to put their own children in child care on that. They are leaving the field to go work across the street in a place where they require no training and are making more. Unless this is addressed, the employers are not going to be able to hire anybody, because people aren't going to be able to go to work.

B. Ralston (Deputy Chair): I wanted to just explore a little bit further your comments about the throne speech commitment to full-school-day programming. I wasn't clear how you reconciled that commitment with developing the child care system as it is now.

Do you envisage that those spaces in public schools for three-to-five-year-olds will perform the function of the child care that you're talking about, or is that a separate program that will run in tandem with child care in the community?
[ Page 2128 ]

R. Chudnovsky: We'll be happy to e-mail you our submission to the early childhood development agency. We knew we had limited time, but….

B. Ralston (Deputy Chair): Perhaps that would be helpful, but if you could just give a preliminary answer here.

R. Chudnovsky: Yes. We actually think that it's crucial that government and the policy and ministerial responsibility and funding divide that's being created between what's called early learning and what's called child care…. Quality child care is early learning, and early learning is occurring in every quality child care program in this province.

Young children don't learn in neatly defined time slots. There is no such thing as seven to nine being about care, then at nine o'clock we start learning — right? Young children learn holistically, developmentally, in all of their waking hours.

We're calling for a true integration of what has been falsely separated out. We're looking for…. If government is serious about its commitment and is serious about wanting to bring in public policy around universal, publicly funded and certain level of free programming for three-, four- and five-year-olds, as children enjoy in this province once they enter the school system, then we're calling for parity of funding of those programs, whether or not they're delivered in school or delivered in a community child care program.

If the school is delivering it, then the school has to accept responsibility for integrated service for the full day to meet the needs of working families. That's already happening in child care centres. So child care centres need to get the equal level of funding that would be going into school-based.

We think there is potential room to deliver in-school, in-community…. We need a lot more spaces, so if we can make use of schools appropriately, we don't have a problem with that.

What we will have as a serious problem is the funding, like StrongStart, of a certain number of hours of programming for families who don't need child care, while working families still have to pay for that, because that's not included in what the government views as full-school-day programming. That make sense?

B. Ralston (Deputy Chair): If you could pass the paper on, that would be helpful.

R. Hawes (Chair): With that, thank you very much for your presentation. We look forward to your written submission.

We have the Canadian Federation of Independent Business, Jack Zimmer.

J. Zimmer: Good evening, everybody. My name is Jack Sutherland Zimmer. I have been invited to speak this evening for the Canadian Federation of Independent Business as both a member and a business owner.

[1930]

I am in my 41st year as an insurance broker and a business owner, so obviously I started in the family business at ten. I also have experience in property management and real estate and over the years have been involved in service organizations, as I do believe in the importance of contributing back to the community.

I really believe small businesses are consistent engines and job creators in our B.C. economy. For example, since we bought our current brokerage nine years ago our staff has grown from two to six employees, and we've tripled our income and increased our retail space by 250 percent. So you can imagine the increase in tax revenues we've generated for our provincial government.

It was almost 40 years ago in Saskatchewan that I was signed up by John Bulloch, the founder of CFIB. We had a conversation that day about poor fiscal management in government. We both agreed that something had to be done about government spending our money with little accountability.

Fast-forward to the present, and I wonder what progress we've made on that point. Hopefully, this committee, which I am very pleased to see has been created, can help us move towards more accountability in government.

What I've seen over the years is that once a government, at any level, has your money, they're very reluctant to give it back by either tax reductions or reductions in government spending. They always seem to find a way of spending what they've collected.

That's why I'd really like to see and recommend an immediate freeze on government spending, which would be very beneficial, with audits while analyses are undertaken to evaluate the true financial needs of each department. Government spending must be responsible, so that we can create an environment where businesses can thrive and grow.

Here are a few recommendations that I feel should be implemented to create this type of environment.

First, immediately reduce the capital gains tax and eventually eliminate it, as this is a regressive tax. A lot of entrepreneurs who I know — I have a lot of these people insured — are sitting on funds that would be injected into the economy if this tax was eliminated. Maybe people can't afford to sell their businesses — such as myself — or property holdings due to the amount of tax they would have to pay. These assets, in most cases, represent the pensions of small business owners.

No. 2, increase the threshold of small business to $500,000 to harmonize with Alberta and Saskatchewan
[ Page 2129 ]
— I'm not sure if this is part of the TILMA negotiations, but it should be — to create a more level playing field between B.C. and Alberta. Within three years I would like to see this increased to $750,000, and at that point it should be indexed for inflation, so it doesn't get so far out of hand, as it has in the past.

No. 3, reduce small business tax to 2.5 percent now.

Start gradually reducing the property purchase tax and eventually eliminate it, as this is another regressive tax. In the meantime, municipalities should receive a portion of this tax, which reflects the sales in their municipality.

No. 5, legislate municipal spending, as it is out of control. Taxes on businesses and commercial properties are disproportionately higher than on residential properties. A large component of commercial rents is municipal taxes, and they continue to increase each year, far beyond the level of inflation.

No. 6, continue to decrease personal and dividend income taxes to make B.C. the most attractive province in Canada. Fostering a climate of economic fairness will lead to new businesses being established and a destination where Canadians and new immigrants want to live and work.

If you keep money in the hands of small business owners and entrepreneurs, you'll increase the tax base exponentially. They know how to put it to work and make it grow. Keeping regressive and high-tax policies in effect will only continue to stifle initiative and promote the growth of the underground economy. And believe me, there is an underground economy.

On a personal note, I was appalled to see the platinum MLA pension plan that was recently implemented. As a small business owner, I have no hope of ever being able to afford a plan like that, as it is also indexed to inflation and insulated from market fluctuations as we are now experiencing.

[1935]

I would like to see this committee have the intestinal fortitude to recommend that this pension plan be rolled back to reflect the standards of the private sector. At one time it was considered an honour and a privilege to serve your community as an elected official. It now appears, due to this pension plan, that it's the privileged few who are taking care of themselves.

I would like to thank you for your time and wish you the best in making recommendations so that a fiscally responsible and fair budget will address the needs of the small business community. Thank you for your time.

R. Hawes (Chair): Thanks, Jack.

B. Ralston (Deputy Chair): Thanks very much, Jack. Well, you took a swing at a lot of taxes there, but you didn't mention the carbon tax. I'm wondering what your view on the carbon tax is.

J. Zimmer: I believe in user pay when it comes to that. I believe that is a user-pay tax. Just like I really do believe in tolls on new bridges and highways, I believe in the user pay. I'm happy to see that B.C. has come out with a carbon tax. I think we can be frontrunners in Canada on that. It takes guts to come out with a tax like that, and I'm proud that the government has done that.

R. Hawes (Chair): Any other questions?

D. Thorne: I'll ask a question if nobody else has one.

Number 5. The municipal spending question. As an ex–city councillor, I…. That's several times that we've heard that now, since we've been taking submissions on this committee. I'm assuming that what you mean by it is that there should be more equity between residential and business commercial tax, that there shouldn't be the three levels — industrial, commercial and residential — and that it should be more equal.

J. Zimmer: Absolutely.

D. Thorne: You don't really mean that the provincial government should be taking the ability to set their own municipal spending budgets out of the control of municipalities — do you?

J. Zimmer: Well, I have some thoughts on that. I think something should happen. I really believe municipalities are out of control. I just don't think they really understand what they do to us when they raise their taxes, like when I was saying…. My taxes and my rent are ridiculously high, and it just goes up every year beyond inflation. They just seem to be out of control.

I don't like the way municipalities are run. I think the provincial government does a better job of running their affairs.

D. Thorne: So basically, you're almost saying, "Elim­inate that level of government," because if you took taxing ability away from municipalities, what would that do to services?

J. Zimmer: I'm not saying to take their taxing ability away. I think there have to be other controls of some sort. I don't know what mechanism we could put in place to do that.

D. Thorne: I'd like to see that one fleshed out in the future, myself.
[ Page 2130 ]

J. Zimmer: I really would too. Yeah.

R. Hawes (Chair): Seeing no other questions, Jack, thank you very much for your submission.

J. Zimmer: You're welcome.

R. Hawes (Chair): We now come to the open-mike portion of the meeting. We have one open-mike presenter, Deane Gurney.

Deane, this portion allows you five minutes.

D. Gurney: Can I have two five-minute slots — one because of this and one as a private citizen?

R. Hawes (Chair): It doesn't quite work that way.

D. Gurney: Why not?

R. Hawes (Chair): Start talking, and we'll see.

D. Gurney: Okay, I'll stop you when I get there.

My first presentation is on behalf of the British Columbia Insolvency Practitioners Association. Some time ago I wrote to the Minister of Finance about a problem that we have in the insolvency business, and it deals with the property purchase tax. At that time we were told that the regulators were going to look at it. Subsequently, a new Minister of Finance was appointed.

Again, I wrote to her. And again, I got the same response — that regulations were going to look at this, and it was going to be introduced into the new budget for this year, which it was not. So here I am today to appeal to you to, hopefully, correct this problem.

[1940]

As you can see from my letter there, when you have a bankruptcy, the trustee goes on title for the respective property. In this particular example here, you'll see that there's $8,000 worth of equity. The problem results when the bankrupt, who often purchases his house back from the trustee by paying a small amount of money…. We're not talking in great deals of money, so usually they pay it back to the trustee. Then we transfer the property back to the bankrupt.

When that's transferred back to the bankrupt, property purchase tax becomes a problem, and he has to pay the full amount of the property purchase tax. He's already paid the property purchase tax once. Now he wants the property back after he's paid the trustee a small amount of money, and he has to pay it again. We're talking double taxation here, in my mind.

I propose two things here: first of all, that you give a trustee an exemption to basically transfer the property back free of property purchase tax or, in the alternative, that the bankrupt be required to pay the equity only.

There's my brief submission. My letter speaks for itself.

R. Hawes (Chair): I think you're going to find, in our recommendations…. I think you'll probably find something in there. I'm just guessing, but this doesn't make sense.

B. Ralston (Deputy Chair): If I were to ask a question, I'd ask whether it requires a statutory amendment or just a regulation.

R. Hawes (Chair): I'm guessing that Deane doesn't know the answer to that anyway.

D. Gurney: I'm told it's a regulation.

R. Hawes (Chair): Thank you. The time clock is running here, so on your personal side….

D. Gurney: Okay, my personal side is about the carbon tax. As you know, we have some problems with the carbon tax in British Columbia. As you can see from the federal election, Stéphane Dion had a significant downfall with the carbon tax, and so did Mr. Clark some years ago.

As time goes on, we are not finding this to be revenue-neutral, as the government has stated. The most glaring error on this is the elimination for municipalities. Most recently there was an amount of money given to those people who have an income that is lower than a certain level. That's not revenue-neutral to me.

This legislation was brought in to be revenue-neutral. It is not. This government is going to have some huge problems with regards to this when the election comes up, and I implore you, basically, to get rid of this thing.

Now, what do I suggest as an alternative? As you know, cigarettes are basically an avenue, which is a good example where…. Government has tried to have people stop smoking. So what did they do first of all? They increased the price — no different than what you're doing with the carbon tax. It didn't work. People smoked. As soon as they got used to the price, cigarette consumption went right back to where it was.

That's where we are with this carbon tax too. As soon as people get used to the price, it's going to go right back to where it was.

The one thing that did work for government and the one thing that reduced all consumption of cigarettes is that we made it public education and brought in laws in order to make it so difficult for people to smoke that they'd rather just give up. That's the one thing that really worked.

If you want to reduce carbon taxes in the province, it's exactly the same thing — education and bringing in
[ Page 2131 ]
building code laws and allowing clotheslines everywhere. There are a lot of things you could bring in that would be absolutely painless and for no money that would have exactly the same effect.

R. Hawes (Chair): Thank you, Deane. This is not a question. Just to let you know that when the government said "revenue-neutral," it meant revenue-neutral to government, not necessarily to those who use carbon but certainly to government. It has no revenue benefit to the government.

D. Gurney: The people of British Columbia don't believe it.

R. Hawes (Chair): It's set in law.

D. Gurney: The people of British Columbia don't believe it.

R. Hawes (Chair): With that, thank you, Deane.

Seeing no other presenters here today, that will lead us to adjourn the meeting. We will reconvene tomorrow morning at 9 a.m. in Burnaby. To those who wish to come and watch firsthand this exciting piece of government work in action, we will welcome you in Burnaby.

With that, we're adjourned.

The committee adjourned at 7:45 p.m.

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