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

Thursday, October 16, 2008

3 p.m.

Aspen Room, Executive Plaza Hotel

405 North Road, Coquitlam, BC

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

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

1. The Chair called the Committee to order at 3:03 p.m.

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

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

4. The Committee recessed from 3:23 p.m. to 3:30 p.m.

5. The Committee recessed from 5:46 p.m. to 5:54 p.m.

6. The Committee adjourned to the call of the Chair at 6:52 pm.

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

Thursday, October 16, 2008

Issue No. 88

ISSN 1499-4178

[ Page 2165 ]

THURSDAY, OCTOBER 16, 2008

The committee met at 3:03 p.m.

[R. Hawes in the chair.]

R. Hawes (Chair): Good afternoon, everyone. I'm Randy Hawes. I'm the MLA for Maple Ridge–Mission. I'd like to welcome…. Well, I guess it's just Maureen in the audience, but thank you for taking the time to participate in this important process.

In preparing the 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 is an all-party committee and is required to report out to the Legislative Assembly by November 15.

So far we've had public hearings in many parts of the province, including Kitimat, Smithers, Fort St. John, Prince George, Williams Lake, Kamloops, Penticton, Vancouver, Cranbrook, Nelson, Courtenay, Langford and, this morning, in Burnaby. We've also been to Abbotsford and Surrey, and this afternoon we conclude the oral part of our tour in Coquitlam. We will then begin work on drafting our report.

If you'd like to review the budget consultation paper, we have copies with us, and they're available at the information table at the back of the room. Information on how to make a presentation to the committee is available on our website www.leg.bc.ca/budgetconsultations.

As a reminder, any input the committee does receive in writing or in electronic form is given the same consideration as any oral presentations that might be made before us today or at any time. Due to the federal election, we have extended our deadline to receive submissions to Friday, October 24.

[1505]

Today we will hear from a number of presenters who will be given 15 minutes, and we do recommend that they try to take ten minutes and allow five minutes for questions and answers. However, it is your time, and you can take as much as you like up to the 15 minutes. I'll try to give you a heads-up at ten minutes, and if you continue, I'll try to give you a two-minute warning that your time is almost at an end.

At the end, time permitting, we'll have an open-mike session. Open-mike presentations are given five minutes, and there are no questions.

I'll now ask the members of the Finance Committee to introduce themselves, starting with John.

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

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

D. Hayer: Good afternoon. Dave Hayer, MLA for Surrey-Tynehead.

R. Hawes (Chair): And Diane Thorne, I think, will be along shortly, as will Richard Lee.

Joining us today, I'm also pleased to introduce our Clerk, Kate Ryan-Lloyd, and also Mary Newell, who is staffing the registration desk at the back of the room.

At the Hansard table we have Michael Baer and Polly Vaughan, who are recording today's proceedings and will prepare a written transcript of today's meeting. As well, it is being broadcast live on the Internet.

With that, I'll call on Maureen Bader of the Canadian Taxpayers Federation, who is our first presenter.

The floor is yours, Maureen.

Presentations

M. Bader: Thank you very much. My name is Maureen Bader. I'm the B.C. director of the Canadian Taxpayers Federation. I'd like to thank you very much for taking the time to listen to the concerns of our taxpaying supporters.

Last year I was pleased to see the conclusion of the 2008 prebudget committee. It was: "We emphasize that government must maintain a growing economy and pay down the provincial debt regardless of any policy shifts to address climate change."

Did the government listen? No. Even though citizens were clearly concerned about a growing debt, the government moved ahead on its climate change crusade and gave us a carbon tax. Now it's paying the price with a precipitous drop in the polls. We can only hope the government listens to the committee's conclusions this time.

Today we have a consensus in support of balanced budgets, spending discipline and debt reduction. The current government, commendably, legislated balanced budgets. It's now time to go one step further.

The Canadian Taxpayers Federation's number one priority for Budget 2009 is the legislation of a debt elimination plan. B.C. taxpayers currently fund interest payments of $6 million per day to service the debt. B.C.'s large surpluses have opened a window of opportunity to pay off the debt and reduce these interest payments. However, without a commitment to debt elimination similar to the commitment to balanced budgets,
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politicians will continue to be distracted by politically motivated spending schemes.

The CTF recommends that government adopt a legislative debt reduction plan, applying 2.5 percent of own-source revenue to the provincial debt. Sixty-eight percent of CTF supporters tell us that in the event of unanticipated surpluses, the federal and provincial governments should place the highest priority on debt reduction.

A tax system should promote economic development and growth and interfere as little as possible in personal and business decisions to work, save and invest. Most importantly, a tax system should generate revenues necessary to cover the costs essential to government services — no more, no less.

Central to the CTF's recommendation is a call for a comprehensive review of corporate and personal income taxes with the aim of streamlining and simplifying the tax code not only to reduce administrative costs but also to enhance compliance and competitiveness.

The CTF recommends the establishment of a public tax review committee to examine corporate and personal income taxes. The CTF supports a shift to a lower, simpler and flatter income tax system. The CTF's report Lower, Simpler and Flatter: Towards a Single Tax Rate for Canada outlines the CTF proposal for a dual-rate personal income tax system federally. In the CTF package that I gave you, I've included our magazine, The Taxpayer, which outlines the proposal. It's on page 23.

The CTF proposes moving to a dual-rate income tax system with a $15,000 basic personal exemption. This, of course, would involve the elimination of most other deductions and tax credits. Eighty-five percent of CTF supporters agree. It's time for a lower, simpler and flatter income tax system in Canada.

[1510]

The CTF strongly opposes the carbon tax, cap-and-trade taxes and subsidies to so-called green projects. Carbon taxes are new taxes on families, are costly to administer, won't make our environment cleaner and have done virtually nothing to change the course of climate change where they currently exist.

The CTF recommends the elimination of the carbon tax. Carbon taxes are supposed to lower carbon dioxide emissions. The experience in Europe shows, however, that this almost never happens. European governments have imposed a garden variety of greenhouse gas reduction measures since the early 1990s. Nevertheless, greenhouse gas emissions went up in Europe by 5 percent between 1991 and 2005. The science is not settled. So far this century global temperatures have cooled, even though carbon dioxide emissions continue to rise.

Almost 85 percent of CTF supporters agree with our strong stand against environmental taxation designed to curb man-made global warming. When asked, "Should the CTF oppose all and any carbon taxes outright?" 56 percent agreed. In fact, 79 percent of CTF supporters say that the CTF should continue to strongly oppose carbon tax and other greenhouse gas–reduction tax-and-spend policies.

So if the government is going to cut taxes and start working on reducing the debt, that means spending is going to have to go down.

Health is the area of greatest spending increase. It is also the area in need of greatest reform. The CTF recommends health care reform to ensure patients have the right to control their own health outcomes. The CTF recommends the repeal of section 45(1) of the Medicare Protection Act, which prohibits the purchase and sale of private medical insurance.

The 2005 Supreme Court ruling in the Chaoulli case struck down a Quebec law that prohibited the purchase and sale of private medical insurance. Given the Supreme Court findings, there is no justification for British Columbia to maintain this prohibition and every reason to repeal it. B.C. must empower patients to assume control of their own health care outcomes. Eighty-five percent of CTF supporters in B.C. support a parallel private medical system.

Where else to cut? Well, corporate welfare has got to be one of the government's most wasteful spending programs. In B.C. subsidy programs channelling funds to individual businesses were commendably eliminated in 2002. Today, however, we see funds channelled to so-called green projects — projects that may or may not have been freely funded in the marketplace. This trend toward spending on eco-fads could quickly undo the benefits of past corporate welfare reform.

The CTF recommends discontinuing corporate welfare creep by eliminating all green subsidies, starting with the innovative clean energy fund. The $25 million innovative clean energy fund is now a $50 million fund, and there's no end in sight. Ironically, these so-called green projects are funded with a tax on energy, which in B.C. is already 95 percent green.

The ICE fund, innovative clean energy fund, was renewed after groups such as Terasen Gas received funding. Terasen Gas is a private profitable company that would undoubtedly invest in any kind of initiative where it thought that it could make money. It is not the responsibility of the government to create an environmental industry.

High-profile mismanagement and recent increases in senior-level bureaucrats' salaries due to salary competition among Crown corporations are two reasons why Crown corporations need to face the discipline of the competitive marketplace. The CTF recommends giving consumers choice through greater competition for lottery products and auto insurance.

Recent scandals and rising bureaucrat salaries drive home the need for more competition. In the case of the British Columbia Lottery Corporation, instead of patching
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over those problems found by the Ombudsman last year, the CTF recommends the removal of the Lottery Corporation's monopoly.

Today, in light of the chop shop scandal, rising premiums, rising costs, rising executive bonus levels, large profits and falling customer satisfaction levels, it is time to end the ICBC monopoly.

These are but two examples of how both consumers and taxpayers are poorly protected when the government gets involved in the supply of services. CTF supporters in B.C. agree, and 88 percent say that in the absence of privatization, they support private insurers competing directly with ICBC. It's time for the ICBC monopoly to end.

The world today is in crisis, and governments are increasingly sidetracked by politically motivated spending increases, debt reduction fictions and eco-fads. B.C. is off the equalization dole and back to have-province status. The focus on balanced budgets and tax reduction helped B.C. get back on track. A return to a focus on fiscal responsibility will help B.C. continue on the path of economic growth and development.

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

Anybody have any questions?

I think your presentation is pretty straightforward and easy to understand, so thank you very much.

[1515]

M. Bader: You're not going to ask me any hard questions? Come on.

R. Lee: You don't support the ICE fund, I can see, but do you support alternative energy research? Because we need energy.

M. Bader: Certainly, that's true. The government, starting with the NDP back in 1995, did start getting power from run-of-river projects. Commendably, they opened up the market to alternative energy projects. The reason for doing that back in '95 and continuing on in 2001 was to ensure that B.C. had a supply of low-cost energy. That's commendable and absolutely something that the Canadian Taxpayers Federation supports.

What we don't support, however, is creating a subsidy program that brings on more expensive energy, such as wind power and such as run-of-river projects that may not have been freely funded in the market. This is where I think the government has gone wrong on its attempt to ensure that B.C. has a continued source of low-cost power into the future.

R. Hawes (Chair): Thank you.

The next presenter is Mark Sekela. I do see that Robert Laing is here.

We're just waiting for our next presenter, so we have Andrew Rawicz from the School of Engineering Science at SFU. He will do an open-mike presentation now rather than at the end.

You have five minutes.

A. Rawicz: I am from the School of Engineering Science, but our new program, which is biomedical engineering, was created between two schools at Simon Fraser University between Kinesiology and the School of Engineering Science. It was officially announced in 2005. We have about 20 faculty members involved in this program from both schools. I have to add that this is the first biomedical engineering program in Canada.

The concept and the philosophy of this program were created to be as practical as possible. It means that we wanted to really work with society to help solve societal problems, whatever they are and whatever they can be for us. This way we found, particularly recently after studying the statistics of cost and spending by the government, that there is a huge budget for the Ministry of Health.

[1520]

As the School of Engineering Science, we already know that medicine is immensely technological. We thought that we could help, actually, with reducing the costs. We can do it in a variety of ways. One of them is by running and conducting projects that are socially dictated, real-need dictated and so on, designed to alleviate or to reduce the costs of particularly hospitalization. We already know several fields in these hospitals where we could really reduce the costs by proposing certain technologies, which actually we already have almost commercializable.

Obviously, if we set up our minds on this particular task of reducing the costs, we can have 20-plus more faculty members free who our request is to be funded by the government — free faculty who would specifically focus on the saleable part of research. It means we would convert these research results from the majority of our faculty involved in the biomedical engineering program into products.

This way we could generate a number of either products or technologies or systems that would reduce the costs in hospitalization. The same way, we could also educate a new number — and hopefully a large number — of biomedical engineers who would think in the same way of cost-effectiveness as a most important parameter of the design.

This is what, in general, I wanted to say. Our goal is to help the government with reducing the costs of health care, and the main focus would be on reducing the hospitalization rate. For doing this, we would need free faculty positions, which we don't have because of budget cuts that unfortunately happened when the baby called biomedical engineering was born — and now is starving.

This is our request.
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R. Hawes (Chair): As we read it, it's very clear in your written submission, too, as to what you're looking for. So thank you very much, Dr. Rawicz.

A. Rawicz: Actually, it was done through Mr. Harry Bloy. I already communicated several times with Mr. Bloy, and he's very supportive of this. He encouraged me to come here, because I might have the chance of presenting it to you.

R. Hawes (Chair): You certainly have had the chance. Congratulations, first, on being here, and second, thank you for that. Thank you for your presentation.

A. Rawicz: Thanks. No questions?

R. Hawes (Chair): In the open-mike portion we never take questions. But I think your presentation is very, very clear.

We're recessed.

The committee recessed from 3:23 p.m. to 3:30 p.m.

[R. Hawes in the chair.]

R. Hawes (Chair): Our next presenter is Sylvia Sam of the Real Estate Board of Greater Vancouver.

S. Sam: Government Relations Committee.

R. Hawes (Chair): Government Relations Committee. Sylvia, you are on.

S. Sam: Thank you. Well, there is no way to break the news, so I'm going to be as clear as possible. The housing market in Metro Vancouver is headed for trouble. So what does this mean? It means fewer sales, and that would result in less government revenue.

In 2007 government collected about a billion dollars in the property transfer tax. For 2008-2009 the government has revised its forecast to $900 million, and that still may be optimistic.

After eight years of solid, often double-digit, annual growth, signs of housing market adjustments are everywhere. This downturn affects a broad range of market participants, from appraisers to electricians to plumbers to lawyers, landscapers, house painters, home improvement stores — almost every facet of our economy.

So why is there a downturn? Well, homebuyers are sitting on the sidelines, and this should concern all of us because of the negative implications it can have on our neighbourhoods and our economy.

Hello. I'm Sylvia Sam. I'm chair of the Government Relations Committee at the Real Estate Board of Greater Vancouver, and I'm here to talk to you about the vital importance of market housing to the provincial and local economies. I'm also here to make two recommendations about how government can help market housing remain a forceful economic driver.

The real estate board is a non-profit, non-partisan association of about 10,000 members, and the board's area extends from Pemberton to the Sunshine Coast in the north to Tsawwassen in the south, from the southern Gulf Islands in the west to Maple Ridge in the east. So it's a large area.

One of the board's key strengths is our statistics. We collect data on homes for sale, homes that sold, homes sitting on the market, and our data is often used by government, academics, demographics, economists, journalists — you name it. We're a good source of credible information. This data gives us a clear picture of the market activities, and what our data is telling us right now is not so great.

Although the economy is still relatively buoyant in B.C. and continues to create jobs and attracts workers from other parts of Canada and the world, this growth has been overshadowed by a perception that the sky is falling. This is largely the result of affordability concerns and continuous bad news about the turmoil in the U.S. and European housing markets and their global economy and even talk about a possible international meltdown, if you're watching all the news that's going on. It's not looking so great.

It's affecting us so strongly in B.C. that we're recording our lowest level of consumer confidence since 2000. All this makes homebuyers extremely cautious, and many are wondering if this is a cyclical dip or if it's a U.S.-style disaster. Families across our board area are clearly worried about their financial future. So how bad is it out there for the real estate environment?

Well, I'm going to cite some real estate board statistics to highlight the seriousness of your situation. If you look at the first page — and we're talking about unit sales now — during the third quarter of 2008 — that's July to September of this year — residential sales in the real estate board area dropped 47 percent compared to the same period in 2007. Only 5,446 homes sold compared to 10,300 in that same quarter in 2007. That's 5,000 homes that didn't sell in this three-month period compared to last year, and it doesn't seem to matter what type of home it is — if it's detached, attached, apartments. About 50 percent of them are not selling. They're just sitting and sitting and sitting.

Detached home sales dropped more than 50 percent; attached townhomes dropped 48 percent; and condominium apartments, our most affordable forms of housing, dropped 43 percent. So within every neighbourhood of the real estate board area, these sales are down. So you can still see the graphs down on the side of the first page.

[1535]

Prices have fallen about 8 percent overall, and this is the graph that's on page 2. If you flip over, you will see
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that this price drop has helped some buyers get into the market, but the prices are still too high for first-time and moderate-income buyers. If this situation continues or worsens, already low consumer confidence could erode, and we could have a meltdown.

How would this play out in our neighbourhood? Well, the housing market is vital for our economy, as it generates so much employment in economic spinoffs. In Metro Vancouver area alone in 2007, residential housing starts and MLS home starts combined generated $10 billion in economic impact, $4.26 billion in GDP, $3.5 billion in household income and 69,185 jobs — all from housing. We're not seeing this level of economic buoyancy in 2008.

I am here today to talk to you about how government could help, and I urge you to pass along our message. The government should act now before consumer confidence erodes further. Homebuyers sitting on the fence need an incentive now, and we think a break on the property transfer tax is one incentive.

The PTT or property transfer tax is charged at a rate of 1 percent on the first $200,000 of the purchase price and 2 percent on the remainder of the home price. This tax makes home ownership less affordable for homebuyers, particularly those who can least afford to pay it — those homebuyers with moderate incomes and only modest savings.

The PTT reduces the amount of the down payment that a homebuyer can afford. With the smaller down payment, homebuyers end up spending a larger proportion of their income on their mortgage.

So how much does the PTT add to the cost of homes? It adds $8,700 to your average $535,000 home. This is the average price in our board area. That's taking detached houses, townhouses and apartments. This is your average. At 6 percent amortization over 25 years, this amount is $16,722 over the life of the mortgage or an additional $55.74 a month. Buyers are still telling me that PTT is a factor when they decide whether or not they are ready and able to afford that home.

So our first recommendation concerns the first-time-homebuyers exemption program. The program provides a full PTT rebate for qualifying first-time buyers of homes priced up to $425,000. In 1994 when the legislation first introduced the exemption for first-time buyers, the price threshold for qualifying homes in the Lower Mainland was $250,000. I know that many of us in the Coquitlam area were very happy we were able to look at houses that were about $250,000, and we were able to put our families into it and not have to pay extra taxes on it. For the rest of the province it was $200,000.

Over the years the price threshold has been increased, but there have always been two ceilings: one for the high-cost urban areas, such as our Vancouver area, and one for the rest of the province. Then in 2007 the government introduced a one-price ceiling of $375,000 for the entire province. This amount increased to $425,000 in the 2008 provincial budget.

We'd like to see a return of the urban-rural price thresholds to better reflect the regional price differences, because $425,000 up in Kamloops is certainly not a $425,000 similar house in the Vancouver area, Burnaby or Coquitlam — or even Mission, for that matter. It's a different home. We have different price points.

So our first recommendation that we're asking the government to do is to raise the price threshold for the first-time-homebuyers program to $600,000 from $425,000 for the high-cost urban areas. We estimate that this would result in about a hundred additional first-time homebuyers each year in our area that would qualify.

Our second recommendation is to raise the price threshold from the first 1 percent of the tax to $400,000 from $200,000. In 1987 when the PTT was introduced, the $200,000 price threshold was meant to cover about 95 percent of the residential property transfers.

[1540]

The then Finance Minister Mel Couvelier stated at that time…. This is a quote, I understand. "The proposed rate structure will result in over 95 percent of transfers of single-family homes being subject to a single 1 percent tax."

But according to our board's statistics, so far in 2008 only 692 home sales, or less than 2 percent of the board area, were priced at less than $200,000. In other words, only 692 homes in this vast region that we call the Real Estate Board of Greater Vancouver board area…. There are only 692 of them that were out there for $200,000. That's quite a change.

To maintain the same tax coverage as legislators intended when the tax was first introduced, the threshold would have to be raised to at least $1.4 million. A home has to be $1.4 million to be equivalent to the intent of the legislation back then.

We therefore recommend you raise the price threshold for the 1 percent portion to a very modest amount of $400,000. We estimate that this would result in 150 additional first-time buyers being able to afford a home in our area each year.

The combined benefits of our recommendations are 250 more homebuyers per year in our area. Over five years this would generate 1,250 more homebuyers, and the benefits are $52.5 million in economic output, $25 million in GDP, $16.25 million in household income and 350 jobs.

You have asked us what choices we would make for the next provincial budget. We believe that the choice is clear. Homebuyers have been helping to fuel strong economic growth in our neighbourhoods for the past several years. Every time a home sells, we all benefit from the resulting job growth, higher earning powers, prosperity and services paid for by government revenues.
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But if the homebuyers don't get a break on PTT, consider the negative implications.

A better choice is to help the homebuyer. Our recommendations do this by making home ownership more affordable for an additional 250 homebuyers each year in our board area. Our recommendations will help spur much-needed home-buying by providing some good news to homebuyers, which in turn will help them get off the fence. It's the affordability lift they need, and it's a win-win for everyone concerned.

Now I welcome your questions.

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

B. Ralston (Deputy Chair): Thanks very much. I agree with you that affordability is a concern. Can you tell me what the real estate commission paid to the vendor's agent would be on a house selling for $400,000?

S. Sam: There is no standard commission that is paid to any particular realtor. It is an individual contract between the seller and their realtor, so I cannot answer what is average or what is expected or anything in that regard. It's a wide range.

D. Hayer: Thank you very much. Now, do you think that making this change, with the way the economy is going, actually will increase the number of sales, even in a short period of time?

S. Sam: There's no guarantee that any particular one measure will generate an economic boom. However, every little step that we make to boost up consumer confidence is a step in the right direction.

My estimation, just sitting here very quickly calculating…. With these two programs in play, where we're increasing the 1 percent of the threshold from $200,000 to $400,000 and we are also increasing the first-time homebuyer exemption from $425,000 to $600,000…. The cost of that program is $1.4 million. That's a lot of goodwill that would generate a lot of confidence. We're talking about first-time homebuyers. We're talking about property transfer tax in that particular bracket. Any measure is good for the economy.

D. Thorne: Sylvia, we've discussed this many times.

S. Sam: Yes, we have.

D. Thorne: I know your feelings — and all of the different real estate associations — about the PTT. I share some of your concerns, and you know that as well.

[1545]

If you had to choose between one of these recommendations — if we said, "Well, we might take one of them forward" — which one would you choose? Which do you think would generate the most help?

S. Sam: Well, if you're talking about increasing the first-time-buyers threshold only from $425,000 to $600,000 as an exemption for 100 buyers, which is our estimate in our board area, that exemption would be $12,000 per person, per buyer, times 100.

If we're talking about an increase of 1 percent from the $200,000 to $400,000 and then 2 percent of the balance, we estimate that would be bring about another 150 buyers at a cost of $4,000. That's what the government costs would be.

D. Thorne: Can you just run those by me?

R. Hawes (Chair): Diane, we don't have to worry. We're over time now.

D. Thorne: It'll be in Hansard anyway.

S. Sam: It's in the package.

R. Hawes (Chair): It is spelled out in the package.

Thank you, Sylvia.

With that, we will now go to the Cement Association of Canada. Michael McSweeney and Tom Gibson will be our next presenters.

M. McSweeney: Hi guys — ladies, gentlemen. It's nice to see you all again. I remember meeting many of you at the cement caucus we had over in Victoria in March of this year.

As you said, my name is Mike McSweeney. I represent the Cement Association. Tom Gibson is the manager of environmental affairs with Lehigh Hanson, and his plant is in Delta. Our other two plants are in Kamloops and in Richmond — the Lafarge facilities.

At the outset I just wanted to say that our manufacturing sector has been really engaged on the B.C. climate action plan and the implementation of the B.C. climate action plan for six months now. We're probably spending over 50 percent of our time on the B.C. climate action plan.

At our request, the climate action secretariat established a cement action working group, which is to provide input on the policy development process and to look for alternate means of reducing the impacts of the carbon tax on the cement industry. We've also established, under the climate action secretariat, a cement energy subcommittee that will establish processes to facilitate the use of alternative and renewable energies for our industry.

In short, we've been really working hard, negotiating in good faith with your government. We've established real productive relationships, and we're delighted to do
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so. We've had a real sharing of information between our association and the government representatives, the civil servants as well as elected and other unelected officials.

If you look at slide 2. As I mentioned, we have facilities in Richmond, Delta and Kamloops, and these facilities produce all the cement that's required for British Columbia's infrastructure needs. But what is crucial to the competitiveness of the three plants in British Columbia is export to the United States. Fifty percent of the cement that's produced in British Columbia is exported to the United States.

On slide 3 we talk about the longstanding and high-quality jobs that have been created and maintained by these manufacturing facilities in British Columbia. What you have to understand is that it's not just the cement manufacturing jobs; it's the concrete and the construction industry. Cement is the glue that holds the concrete together. Ten percent of cement goes into the concrete mix with water, aggregate and sand. There is no substitute for cement. If you don't have cement, you don't have concrete.

There are other contributions, though, that the cement sector makes to the overall economy. Looking at slide 3…. The fact that domestic demand can be satisfied with the production from B.C. is important to keeping the costs of construction down and reasonable and affordable here in British Columbia.

In Budget 2008 the government made significant investments in British Columbia, which we applaud, but the extent and costs of these projects are made more affordable by a healthy domestic cement industry.

[1550]

There are significant risks associated with relying on imported cement from Asia or the United States to satisfy our domestic demand — risks of competitively priced supply, risks of timely delivery, risks of political situations in other countries.

Three months ago Hugo Chavez nationalized the cement industry. He said to Lafarge, Holcim and Cemex: "You're done. I'm buying your plants." He came to an agreement with Cemex and Lafarge, couldn't come to an agreement with Holcim and paid them what he thought the plant was worth. So we always have to be aware of what's going on in political situations in other countries.

We believe the government must consider the health and competitiveness of the B.C. cement industry as the cornerstone for your infrastructure plan here in British Columbia for today and tomorrow. We ask that when you consider recommendations on future competitiveness, you keep in mind the strategic importance of a domestic cement industry.

Cement and concrete are the most widely used building materials in the world, but they're not just construction materials. Why would we say that? Simply put, cement and concrete buildings, highways, infrastructure — that beautiful SkyTrain that comes out here — all have attributes that should be seen as a vital component to a greener, more energy-efficient and sustainable community.

When governments truly understand the sustainability of cement and concrete products and how they contribute to a lower-carbon economy, I'm certain a newer understanding will lead to an increased demand for cement and cement products here in British Columbia.

If you look at slide 4, you can see where our concern is rooted. Findings from a study that we hired Mark Jaccard and EnviroEconomics to help us with indicate that the net cost of the carbon tax to our industry is projected to be $65 million over the next five years.

Yes, you reduced corporate taxes. But in the scheme of things, over a five-year period, that is only a million dollars a year. Yet in five years the carbon tax to the cement industry will be $20 million a year. Corporate taxes were reduced, as I said, but these merely offset the removal, that was also in the budget, of the provincial sales tax exemption on the cement industry's purchase of coke and petroleum.

The net effect of the carbon tax payments goes straight to the bottom line of our companies. To gain a sense of this importance to the bottom line, you have to understand that for all the cement that's sold in British Columbia, the revenues are about $250 million. With carbon tax payments scheduled to reach $25 million a year by 2012, it's easy to see why Mark Jaccard and Associates have concluded that the carbon tax by 2010 could potentially place B.C. cement manufacturing facilities at operational risk of closure.

Under the best-case scenario, which is today at $10 a tonne, our compliance costs exceed 20 percent of profits. If you owned a business, would you keep investing in it if the cost exceeded 20 percent of profits?

Under the worst-case scenario, in 2012 the tax could reduce profits by 107 percent. I ask you: would you invest in those kinds of companies?

There are no quick and obvious ways to reduce the impacts of the tax. Some suggest that we should move to natural gas, but we can't move to natural gas. The cost would make our cement more expensive than our competitors'.

At the same time, some people say we should use wood biomass, but it's not economic either. Today wood biomass in British Columbia sells for twice the amount that coal sells for, and you have to use twice the amount of wood to get the same heating value as coal. So really, wood biomass is four times as expensive as coal.

If you have a look at slide 5, you can see that we just can't pass along our increased costs to our customers. It's not feasible. As soon as the carbon tax was implemented, we started getting invoices from our rail suppliers, our road transportation suppliers, and they just put on a B.C.
[ Page 2172 ]
carbon tax surcharge and charged it to us. But we can't do that.

We're not like the transportation sector. We're not like the electricity sector. We're highly constrained to pass on our costs. Presently almost 50 percent, as I said, of our cement is exported to the United States, a market where there is today no carbon tax.

[1555]

As you see in slide 5, the cement industry is a price-taker in a marketplace that is dominated by low-cost cement and from less regulated environments, like Asia. Likewise, we're greatly restrained in our ability to pass on the cost to the customers within our domestic market. The slowdown in the U.S. economy has resulted in both offshore and U.S. Pacific Northwest manufacturers looking for alternate markets.

In June of this year we saw a 26 percent increase of imports from Washington and Oregon into British Columbia. That's because they can ship their cement up here and not pay a carbon tax — 26 percent cut right from the knees.

With the B.C. economy still growing and major infrastructure investments being undertaken, we have to comply with all of the other issues, such as the lower dollar — although we were helped with that over the last week, but we're certainly not happy about that — increased energy costs and multiple regulatory environmental systems. We've got the federal plan. We've got the provincial plan. We have cap-and-trade. It's really making us uncompetitive here at home.

The clear conclusion for us is that the carbon tax announced in Budget 2008 is contributing and will contribute to the leakage of cement production and greenhouse gas emissions to offshore jurisdictions. So what you've done is that you may think you're helping the environment here in British Columbia, but you're not going to get any economic benefit, and you're not going to get any reduction in greenhouse gases in the global environment if we don't manufacture here, and it's just manufactured somewhere else.

On slide 6 we outline the realities for our industry. As I said, we're extremely vulnerable to indiscriminate greenhouse gas mitigation policies and price signals. Some people say we should have an import tax — let the province of British Columbia put an import tax on cement coming into British Columbia — but we all know that wouldn't withstand a court challenge under the WTO. We can't respond overnight to these kinds of price signals.

When it was originally introduced, it was thought the cement sector would only be subject to the carbon tax until 2010. When we met with Graham Whitmarsh, he said: "Don't worry. Carbon tax will only be for 2008-2009. In 2010 we'll have cap-and-trade. We'll be with the western climate initiative."

Now the earliest date for the western climate initiative to kick off the cap-and-trade system is 2012. For the cement sector, the impacts of the carbon tax will be unsustainable well before 2012.

The B.C. industry does, however, support the need to address environmental issues. We really do. We understand it, and we're committed to it. We're committed to being part of the solution in global climate change. But it must be done in a manner that protects the environment through timely regulatory and fiscal regimes that add momentum to reducing greenhouse gas emissions that result from current fossil fuel combustion, yet at the same time maintains a strong, vibrant and competitive economy.

On slide 7 we have our request for you. We ask that you forgo the planned increase in July 1, 2009, on the carbon tax. This will allow us to work more closely with the climate action secretariat and complete the work of the cement climate action working group with Graham Whitmarsh and his team.

If you can't do that, we'd ask you to consider implementing an exemption on the carbon tax on the 50 percent of our product that goes to the United States. Surely to God, you weren't trying to put us out of business when you came up with the carbon tax. If 50 percent of our product goes to the United States, maybe we could be exempted for the carbon tax on that portion.

Perhaps you could exempt mixed-composition, post-consumer and refuse-derived energy sources from the carbon tax. This will allow us to look for alternative and renewable fuels that are economic and, at the same time, help us to reduce our reliance on fossil fuels.

We need to have a level playing field with all programs and incentives designed equally for all the manufacturing sectors. You should have a look at what's given to the electricity sector — the amount of support, the financial incentives that are given to the electricity sector here in British Columbia. Is it fair for the government to pick winners and losers in the economy, or should everybody be treated the same?

Finally, we ask the government to integrate the carbon tax with other policy measures that are being undertaken both nationally across Canada and in the United States.

Members of the committee, there are other areas, and we list them on the next slide. I won't get into them because of the time today. You could tinker with tax policy that would assist not only our industry but other industries across British Columbia. I would invite you, when you have an opportunity, to read our written submission that will be sent in by the deadline.

[1600]

We are obviously anxious to work in any capacity with your officials and are delighted to report back to you. You should be very proud of all the people that work in the Ministry of Finance and the climate action secretariat. We have an excellent relationship with them, and it certainly is a testament to the people that you hire within the civil service of British Columbia.
[ Page 2173 ]

Thank you for your time today. Tom and I will be happy to answer any questions you may have.

R. Hawes (Chair): Questions? I think your submission is pretty straightforward.

J. Yap: Thank you for your presentation. You were suggesting that the July 1 increase — that we forgo that. I just want to be clear here. Yet on the next page you are saying that we should fast-track the remaining tax reductions.

My question is going to be: what about the offsetting income tax reductions? You're suggesting that we do both, which would have a double whammy on the revenues for the province.

M. McSweeney: As I mentioned, the corporate tax reductions…. It was 1 percent. In 2012 that will be a million dollars, but the carbon tax will be $20 million. So you talk about revenue neutrality, and everybody in B.C. that isn't as educated as we are or as the legislators are thinks that industry is getting off and that large industry is not paying its fair share.

But when you look at three little cement companies in British Columbia paying $20 million a year in carbon tax — and that's 107 percent of their profit — how could any politician or any ENGO say that industry is not paying its fair share?

We would either like to see the carbon tax delayed…. We understand your role as politicians. It's very difficult to climb down from policy decisions. However, the Premier has climbed down from his carbon tax for the municipalities. We saw what he did there. We've seen other climb-downs in other sectors that the Premier and the government have done.

So we're asking that you consider climbing down on the carbon tax increase in '09 or exempting our exports. It's shameful to see these exports…. In the month of June — and that was before the carbon tax came in — we saw a 26 percent increase in cement coming across the border. Why? Because the United States economy has also gone into the toilet, more so than us. So they're looking for new markets. Where are they looking for markets? Right here in British Columbia.

That's the first time ever we've seen cement…. Not the first time ever, but one of the first times we've seen such a large increase of cement coming from the United States. Usually it comes from Asia. We always say that when oil is less than $100 a barrel, which it is today, you can make cement cheaper in China and ship it to North America cheaper than we can make it here in Canada.

So we're faced with that. And when they can charge $100 a tonne…. We can't charge any more than $100 a tonne. So that's what we say when the price elasticity is not there for cement. It's there for electricity because of the way the legislation is written. The electricity is a publicly regulated utility that passes its rate increases down to the consumer. We don't have that same luxury, because it's an international industry.

R. Hawes (Chair): Okay. Thanks very much for your presentation.

M. McSweeney: Thank you for your consideration. See you in March.

R. Hawes (Chair): Next we've got the British Columbia Real Estate Association, and they're joined with the Canadian Home Builders Association. It is Robert Laing and M.J. Whitemarsh.

M. Moloney: And guest. My name is Moss Moloney. I'm a director at the British Columbia Real Estate Association. I'm the chair of the Government Relations Committee.

R. Laing: Thank you for seeing us this afternoon. I am Robert Laing, the CEO of the British Columbia Real Estate Association. With me this afternoon is M.J. Whitemarsh, the CEO of the Canadian Home Builders Association of B.C., and Moss has introduced himself. Moss is also the chair of BCREA's Government Relations Committee this year and on our board of directors.

[1605]

I've been with BCREA for eight years, joining the association after 15 years at the University of British Columbia. For just about 30 years now I've been a real estate lawyer in the province.

B.C. ramped up its non-partisan government liaison activities considerably in 1987, when the Social Credit government of the day introduced the property transfer tax. As you are aware, the residential housing market is one of the key economic drivers in British Columbia. As you heard from a previous speaker, the market is currently in decline, which brings our two organizations here with suggestions to address housing availability and address at the same time the government's desire to reduce our carbon footprint.

We are focusing our submission on the property transfer tax in an effort to increase housing obtainability for average British Columbians. As you've heard, currently buyers pay a tax of 1 percent on the first $200,000 of the sale price of a home and 2 percent on the balance thereafter.

Our first recommendation is that the 1 percent threshold be increased to $400,000, with 2 percent on the balance being left.

M. Whitemarsh: Our second recommendation concerns green housing. You've all heard me talk to you about this before. It's not the first time I've done it.
[ Page 2174 ]

With the introduction of our new building code, which came in on September 5, and a desire by CHBABC to build higher-energy, more energy-efficient, environmentally sound houses, we have been to see most of you. We've been to see the Premier.

As you know, your government was kind enough to give us $150,000 back in September to help us start ramping up and training the builders around the province that needed to learn better about green building.

We administer the Built Green B.C. program. It has been a success to this point in time. It's also a program that…. When you use it for building the houses, you're adding about 4 to 6 percent to the cost of a home.

In a province where the real estate market is the highest in the country, you're looking at close to…. Even now, with the decline in the real estate market, you're looking at about $580,000 for the average price of a home in greater Vancouver and not much different in the city of Victoria. So when you're looking at adding another 4 to 6 percent onto the cost of a home, it's actually coming out of people's hands to be able to build to that higher environmental standard.

One of the suggestions that we've had, which is not different from what we did last year, is to talk to you about tying the levels of a Built Green home to the property transfer tax and reducing the tax as the home is more energy-efficient.

And Robert, I'm sorry. I'm all over the map here, but these guys have all heard me before, so….

R. Laing: I can stick to a script here.

The property transfer tax was introduced as a progressive tax, with the highest levy intended to apply to 5 percent of the homes sold in British Columbia — 5 percent of the homes. At the time, the average house in greater Vancouver sold for approximately $102,000.

When introduced, the government described it as a wealth tax. It accounted for just over 2 percent of government revenues. Now it accounts for almost 6 percent of government revenues.

Today the average cost of a house in greater Vancouver is approximately $450,000, and the highest levy applies to 80 percent of those houses sold. It is a tax on low and medium incomes, not a wealth tax anymore.

In Canada, B.C. has the highest land transfer tax, basically making it the worst in terms of tax burdens on its citizens. Ontario has the second-highest land transfer tax, but B.C.'s tax is double that of Ontario.

B.C. homebuyers pay 222 percent more transfer tax than average Canadians. If you take the average transfer tax across the country, B.C.'s rate is still 129 percent higher than the average.

We're coming to you today on the issue of equity. The tax is paid every time a family moves to a new home. Most citizens move every five to seven years. A lot of people move more often due to job transfers or the need to move to find a job. Each time they move, families pay an estimated 10 percent of their income in property transfer tax.

The tax, therefore, is a disincentive to move around the province, and we believe it's discouraging new business and entrepreneurs from coming to B.C. It is negatively impacting the work the government has done to actually increase labour mobility.

The recommendation to increase the 1 percent threshold is supported by both the Vancouver Board of Trade and the B.C. Chamber of Commerce. If implemented, our recommendation will take us back to the original purpose of the tax for government, and it will make housing more obtainable for average British Columbians.

M. Whitemarsh: We applaud our government on measures taken to help all British Columbians to lessen their carbon footprint and to reach the level that we want to have — of 33 percent by 2020.

[1610]

The recent changes to the B.C. building code are requiring that all houses now be built to an EnerGuide 77 level, which is just at the base part of a Built Green gold home.

Every Built Green gold home built removes 2.5 tonnes of greenhouse gas emissions from the air. Usually when I say that people's eyes glaze over, because they don't really know how to equate that. But an average subdivision like the ones you probably drove through to come here today would take about 165 cars off the road every year as long as that house is standing. That is huge. If you want to reduce greenhouse gas emissions, that is one huge way that you can do it.

We're partnering with the government right now to get the LiveSmart B.C. program out there, to make sure that renovations that are done are built to higher energy-efficient standards. We believe that our government has an opportunity to continue its efforts in reducing the carbon footprint. We suggest that the province provide property transfer tax rebates tied to the Built Green levels, as I said earlier. By tying these reductions to the property transfer tax, we could help offset all costs associated with the increase in price to build a more energy-efficient home.

The incentive is consistent with the revenue neutrality, that principle of the carbon tax, as it would help return money to British Columbians in a way that is definitely directly targeted at reducing greenhouse gas emissions.

We realize that the property transfer tax revenues are needed by our government. We know that those revenues help support things that we care about and enjoy: a better health system, better schools for our children, the arts. However, creating a cultural change in buying green and reducing our carbon footprint will be more readily achievable if the government gives a little, while
[ Page 2175 ]
still maintaining the much-needed funding that we know you people need.

Last year's windfall of $1.1 billion in property transfer tax was way over any dream that any of you had for collecting that money. Housing starts were way over what we thought they would be, and now that they're lower, believe me, the sky's not falling. Our guys are happy to have a little bit of a reprieve and a breath.

Just helping us to get houses up to a higher standard and tying those property transfer tax levels to the higher-energy efficiency levels will detract a little from what that $1.1 billion was, but it will only be small and insignificant in the whole realm of things.

R. Laing: We'd be pleased to take any questions.

R. Hawes (Chair): This is not an unfamiliar presentation.

M. Whitemarsh: I've given you an updated checklist for Built Green. Last year, Dave, you asked me about a couple of things that B.C. did not have on that list, and they're now on there, so it is an updated list.

D. Hayer: I appreciate that.

J. Yap: M.J., your comment about how your guys are appreciative of a bit of a breather. I know that on the sales side, there's been a slowing down since about the beginning of this year. Sylvia presented us with numbers year over year, September to September.

We're seeing a clear decline in prices. I've heard it described as…. We're now in a more normal market. Like, 2007 was an exceptional year. So how does the current year, 2008, so far compare to 2006, 2005?

R. Laing: Towards the summer we said we were in more of a normal market. I think it's the only thing you can say right now — that we're in a buyer's market. There is more stock available, houses aren't moving, and it's been impacted somewhat by the American situation, but by the global situation.

Mr. Ralston asked a previous question about commissions. It is absolutely correct. Commissions are negotiable, so we can't give you an exact figure, but I suspect the real question reflects the media impression that realtors are fat cats sitting back with lots of money. I should let you know that the ….

M. Whitemarsh: That's builders.

R. Laing: Perhaps it is builders. Of the 18,000 realtors in the province, about 10 percent, or 1,800, make very good livings. The bulk of the realtors are low- or medium-income earners. There's a significant number who make nothing in a year. They do not sell one house in a year. A very large percentage make less than $15,000 a year. I raise that just because there is an impression that the realtors are this group of wealthy individuals — anything from the truth.

R. Hawes (Chair): I'll know things are really bad in the real estate industry when the signs start going up in offices again saying: "Lord, let there be another boom. I promise not to blow it all this time." Have those signs started going up yet?

M. Moloney: I haven't seen any.

M. Whitemarsh: Stay tuned.

[1615]

R. Hawes (Chair): Thanks very much.

Our next presenter is Robert Dean of the Tri-City Men's Resource Centre.

Welcome.

R. Dean: Thank you. I know my official time isn't till 4:20. Do I wait until everyone is back to start?

R. Hawes (Chair): No, you can go ahead. There are people who can't come in now, but they will always review what you have to say. We get Hansard, which gives a complete…. We also get a précis of what you had to say as well.

R. Dean: Okay. My name is Robert Dean. I'm the executive director of the Tri-City Men's Resource Centre. It was founded by Patricia Dean, my wife, a registered counsellor, when she realized that there weren't any resources available for men, fathers especially, to help them through difficult times and also to share information on parenting.

The Tri-City Men's Resource Centre. Our website is tcmrc.net, and we got established in February of last year. Right now we're operating a Dads Make a Difference program at the Tri-Cities East Neighbourhood Centre, and it runs every Wednesday night.

We want to offer a Doing the Dad Thing program. We applied for funding from the United Way, and we were unsuccessful in getting that funding. We plan on still going forward with the program, and I'm really the facilitator of that.

I'm facilitating the Dads Make a Difference program right now, and when I finish here, I'm going to be going to Maple Ridge this evening to meet with another social service provider in Maple Ridge that wants to offer a Daddy and Me program. They wanted to go to their local men's resource centre in Maple Ridge, but there isn't one, so we were the closest one available. I said I'd do it, so my schedule has been pretty busy.

We really, really need funding. We were able to establish our first office in the Tri-Cities East Neighbourhood
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Centre through a grant from MCFD. It has been a huge benefit to be able to get that, but by getting established, we've been able to realize how much the resources that we offer are really needed in our community and beyond. I personally have been fielding phone calls from Langley, Maple Ridge, Surrey and Vancouver, because there isn't anything in the Lower Mainland that offers what we offer.

We would like to be able to offer — my wife has already gotten together information to be able to run it — a divorce recovery program, and we would also like to run an anger management program, because there isn't anything available in our community. The closest thing is in Maple Ridge.

I've found through conversations in the Tri-Cities east neighbourhood house that men who are denied access to their children because they have to go to anger management find that the closest one available is in Burnaby. They're working a ten-hour day, then having to drive to Burnaby, then getting home — possibly in Pitt Meadows — and getting up in the morning for work again. It's just not conceivable. Kids are missing out because their dads aren't able to jump through the hoops that are put in front of them by the court system as far as anger management is concerned.

Our main purpose is to try and enrich children's lives by supporting their dads. We've been really successful so far with the dads that we have been able to handle and work with, but it's just because my wife and I are donating our time why we exist right now. With what we want to offer, there aren't enough hours in the day and not enough days in the week for us to be able to offer all the programs.

[1620]

We need funding so that we can get facilitators to facilitate a divorce recovery program, anger management and Dads Make a Difference — support through separation programs such as that.

We have a lot of support in the community. We've been able to run a Father's Day picnic, which has never happened before in our community. We were able to give away 300 lunches and have, like, an old-fashioned picnic, with three-legged races and potato sack races and things like that and offer prizes to first place in each one of those because of being able to get donations from the community. We were able to give away 300 lunches at that picnic because of community support.

We've tried doing our own fundraising, such as I've handed out. We had our first annual toy wooden boat race in September. We were able to raise just over $600 doing that. It morphed from a rubber duck race. The environmentalists said: "Where are the ducks coming from, who made them, how many miles did they have to travel to get here, and what sorts of poisons might they be leaching into the rivers and killing vegetation and fish and things?"

It turned into…. My wife actually came up with the idea of toy wooden boat race. I work in construction, in the elevator industry, and I took wood from crates that elevators were shipped in, and we made these boats. Also because of the concern about the environment, we didn't paint them or attach paper or anything else to them. I made brands and burn-branded these boats so that if one of them did get loose, there wouldn't be an environmental disaster through it.

We then were in the PoCo Pride Day. We volunteered for that. We were in the May Day Parade. We were surprised at the support that we got just from the May Day Parade — just going down the street and people noticing us, like: "Wow. You guys exist." We've been able to post ads in the PoCo Family Justice Centre at the courthouse and have been able to get a pile of phone calls as a result of that. Again, we need funding to be able to offer the services that we do right now but on an expanded basis.

I'm willing to answer any questions that you have.

R. Hawes (Chair): In your material here it says you're also getting funding from the Ministry of Children and Family Development and a grant from Coast Capital Savings.

R. Dean: Correct.

R. Hawes (Chair): To what extent are you funded?

R. Dean: MCFD has given us a grant to pay for the office that we have until March of '09, and then that runs out. We got a grant from Coast Capital Savings to buy the Doing the Dad Thing program, so we can offer that.

We've found that commonly it's like: "Well, if you're going to offer services, then you have people pay for the services that you offer." I personally know from going through the court system…. It runs you dry, and you don't have any money. Kids shouldn't have to suffer because their parents don't have the finances to gain the resources that they need to support them and their children.

Another little thing. This is our logo. My wife and I made this, and the idea of this logo is…. It's two strong parents with their arms joining behind their child, supporting their child. The child is in bold because the child is the most important, and they should have two strong parents that support them.

I know years ago when I went on line, there were 27 different support services exclusively for women in the Lower Mainland, and there was one for men. It was for the adult survivors of child sex abuse, and that was it. My wife said: "That's just not right. It has to change." And that's why she established the men's centre.

R. Hawes (Chair): For the committee, I notice in here that there's no dollar figure attached to your ask. There's
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no dollar figure that you've put in here — the amount of money….

R. Dean: Well, rough figures like $45,000 to have one person — my wife, who is a counsellor — that could operate it all day, every day. She has to work…. I mean, we still have bills. I've got a 40-hour job that I do every week, and I'm doing all this by just volunteering my time.

[1625]

We haven't specified. We were thinking in the area of…. It was $35,000 a year for anger management, about $10,000 a year for rent, $1,000 for insurance, $10,000 for Doing the Dad Thing course that we want to run. These are just rough figures. Personally, I earn $72,000 a year, and to quit my job to make my child support payments, I'd have to be able to make at least as much as that, because payments don't decrease; they only increase.

D. Thorne: Hi, Robert. I live in Coquitlam. I'm the MLA for this area, actually. When I worked at SHARE Family and Community Services, they at that time…. I thought they still were actually running anger management groups for men. But you said there's nothing in Coquitlam or in the Tri-Cities at all anymore.

So what I'm wondering is if you…. Instead of having to pay for an office and do all of those things, have you tried to contact, talk to, Joanne Granek at SHARE and try and work with them?

R. Dean: I didn't.

D. Thorne: I see this as a win-win for both of you to do that. They have secretarial there — everything.

R. Dean: Okay.

D. Thorne: If you could complement their programs and help each other that way, it would be terrific.

R. Dean: We'd love to take advantage of that. I've personally found that men have a difficult time going to SHARE or the women's centre. I know the women's centre offers dad-oriented programs as well, but men are uncomfortable going in that direction. Because it's a men's centre, it's more of a welcoming thing for men to go to a men's centre.

D. Thorne: But they have physical space. And they have even more now than they did when I worked there. They could probably…. If things were right, they could even do a men's centre. You know what I'm saying? I think the whole women's centre thing is a different issue — right? But SHARE is for family services, and a lot of men go to programs there. I worked there for years. And they're quite comfortable. So try it out.

R. Dean: I will. The office that we did get…. I was the president of the Tri-City Family Place for three years, and through connections from that, we got the neighbourhood centre.

D. Hayer: We have heard some other similar types of presentations from men's groups. When I talk to some of the constituents, they say they seem to be having problems going into the women's centres. Mostly it was for ladies. They were saying there is not enough service for the men. But in this case I see your wife is the one who's running it. Do the men have a problem, then, because they see there's a lady running a men's resource centre?

R. Dean: My wife is the one that established it, but I'm the executive director, and I field the majority of the calls that come in. It's either-or. If men have a problem dealing with my wife, then…. And fortunately, my last name is Dean, so my wife's last name is Dean, and people sometimes get confused when they see Dean and they contact her, and she can just forward them to me.

But we haven't experienced that yet. I don't know if people are avoiding because of my wife being involved or not, but it's a very welcoming environment, regardless of whether it's a male or a female that's greeting people when they first come in.

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

The B.C. Child Care Advocacy Forum is not yet here, but Matt Horne is here from the Pembina Institute.

Welcome.

M. Horne: Good afternoon. My name is Matt Horne. I'm the acting director of the B.C. energy solutions program with the Pembina Institute. We're an environmental organization focused on energy and climate issues across Canada. I'm based here in British Columbia.

What I wanted to talk about today, and it's covered in the materials that are being handed to you…. I apologize for the print quality. We'll submit a formal submission in writing, as well, on top of those materials, but what I wanted to cover is with respect to B.C.'s carbon tax and our perspectives on it and also some opportunities to improve it going forward, both in the 2009 budget and subsequent to the 2009 budget.

I thought I would start just by clarifying Pembina's perspective on the carbon tax. It has been an issue of fairly heated debate in the province. We have been and continue to be supportive of the carbon tax as what we would characterize as a core policy in the province's efforts to deal with global warming. There are a few reasons for that support.

[1630]

First and foremost is the emerging consensus that there needs to be a price on carbon dioxide emissions,
[ Page 2178 ]
and the carbon tax is one approach to implementing that price on emissions.

Specifically with respect to B.C.'s carbon tax, we have been appreciative of the fact that that carbon tax is increasing steadily over time from now until 2012 and that basically, it's providing an increasing signal to reduce emissions and pursue greener alternatives. It's also giving families, communities and businesses time to adapt to that changing price and not be saddled with an unfair burden.

In the first two years of the carbon tax it does provide adequate protection to low-income families to ensure, in the form of tax credits and tax cuts, that the most vulnerable in British Columbia are not adversely affected by the carbon tax.

Thirdly, in its current form the carbon tax covers a relatively broad proportion of emissions in the province. The graph on page 1 is basically showing…. If you look at the black line around the outside, or the black bar on the outside of the emissions that are covered by the carbon tax…. So homes and buildings are in green, transportation in yellow, combustion emissions from industry in the reddish-pink, and then the grey bar around the outside is the emissions not currently covered. Those are waste and agricultural emissions and industrial process emissions from the industry sectors.

In summary on these points, we have been supportive of the carbon tax as a strong starting point. At the same time, we don't see it being sufficient in its current form to reach the goals that have been outlined for the province for 2020 in terms of reducing greenhouse gas emissions.

Turning to the second page, I'd like to talk about where we see some opportunities to improve and strengthen the carbon tax, moving forward. We have four areas here, four elements. Elements 3 and 4 have the most relevance for the 2009 budget. Elements 1 and 2 are important, but I guess I would characterize them for subsequent budgets. But we did want to give the full package on our perspectives in this presentation. All these align fairly closely with a subset of the recommendations that were recently released as part of the Climate Action Team's report.

The first is increasing the price above $30 per tonne after 2012. Many people have commented that at $30 a tonne, there is not a strong enough price signal there to really be driving technology and behaviour change to the extent that we're going to need to see, moving toward 2020 and beyond.

According to the national round table, which has done quite a bit of modelling on carbon pricing, they're seeing a need for a carbon price of at least $75 a tonne by 2020 to get emissions down to 1990 levels. In British Columbia our goal is beyond that, so it stands to reason that the price will need to be higher than that — in the $75-to-$100-a-tonne range by 2020.

Second, increasing protection for low-income families. We have in the current policy a good window on the next two years of what those protections are going to be but very little information on what they would be beyond that, both for the increases between 2011 and 2012 and then, if they happen, increases beyond that — the price pressures on low-income families in particular. Those prices will be increasing, and the risks of having regressive impacts are there. It will be important to make sure to scale up the protection for low-income families accordingly.

The third is not the carbon tax directly but a piece that we would see bundled very closely, and that is increasing access to solutions for families and businesses. As the price on carbon increases — and we're seeing some evidence of this today — British Columbians and British Columbia businesses are looking more and more for green solutions. Those solutions need to be there if the carbon tax is going to be effective.

Yeah, we have some examples already. The LiveSmart program has been fairly successful in bringing people in to look at the opportunities to retrofit their homes and reduce energy consumption. We're going to need to see a scaling-up and an increase of those types of programs across the spectrum of opportunities to ensure that solutions are available and both citizens and businesses are aware of those solutions.

The fourth area is broadening the coverage to additional sources of greenhouse gas emissions. Where we're at currently is that the carbon tax covers approximately 70 percent of emissions in the province.

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The table at the bottom of page 2 basically gives some information on some of the emission sources that aren't currently covered by the carbon tax. In the different rows of those various sources of emissions — the emissions from cement production, lime production, aluminum production and so on — the second column indicates the percentage of B.C.'s emissions that come from those various sources.

The third is the revenue that would be generated if they were covered by the carbon tax at $15 per tonne.

The next column is the uncertainty in the data. So how certain are we, at a facility level, that the data we're currently reporting is accurate as to what those emissions are? There's a range as to the level of uncertainty. For cement production, we have a very good handle on what those emissions are, whereas for landfill wastes, it's relatively uncertain as to exactly what those emissions are.

The second-last column is whether or not the carbon tax will be an appropriate signal to reduce emissions. I think when you're dealing with business in particular, it is fairly clear that it is going to be an effective signal. The agriculture and waste sector — it's unclear at this point if the carbon tax is an appropriate measure or maybe regulation is a better approach.
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The final column is whether or not they're already covered in existing systems elsewhere by a carbon tax or a carbon price through a cap-and-trade system. Both cement production and lime production are, and aluminum production and natural gas are both proposed to be covered by existing systems, whereas the remaining four are not.

With that information, our recommendation would be to include cement, lime and aluminum production under the scope of the carbon tax for the 2009 budget, coming on the same schedule as the increase to $15 a tonne in July of 2009. That would add an additional 3.8 percent of B.C.'s emissions under the carbon tax base. Based on all the information we've been able to research, it both seems feasible and could be accurately included under the carbon tax, similar to the emissions that are already included.

I think it's important to keep the door open on the natural gas–venting emissions, which are on the fourth row in that table. Based on what we've been able to learn, it seems technically feasible to include those, but the quality of data will need to be improved between now and July 2009 to make that a reality in B.C.

Just quickly talking about the rationale for this, as I know there's been some discussion. Some people have said that we should wait, because these may be covered under a cap-and-trade program. Our perspective is that it does make sense to move quickly on those and make them covered by the carbon tax in 2009.

The first reason, given the negotiations that are currently underway, is that the soonest we'll have a cap-and-trade system operational in B.C. is 2012, and it's still unclear as to how effective that system is going to be, based on the western climate initiative negotiations. If we can do it in B.C. sooner than that, we see no reason to delay.

The second is that it puts British Columbia business in a competitive advantage. If there's an earlier signal to reduce emissions, if and when a cap-and-trade system is up and running, we're in a much better position to benefit from that system. Third, it sends sort of a consistent and fair signal that if emissions can be covered by a carbon tax, they will be covered by a carbon tax, regardless of the source.

The two graphs on the bottom of the page 3 just give you an indication…. All that's changing is the black line around the outside, just showing how the coverage of the carbon tax would change. On the left-hand side you get approximately an additional 4 percent if you include the aluminum, cement and lime emissions and then an additional 5 percent if you're able to successfully include the natural gas–venting emissions.

I guess in conclusion, our perspective on the carbon tax is that it's an effective approach for B.C. to be taking. What's in place now is a strong start. We would encourage Budget 2009 to continue on that path. With respect to opportunities to reduce emissions, we see the budget as an effective tool to make sure that British Columbian families and British Columbia businesses have access to solutions and that those solutions are as affordable as possible.

Thirdly, the carbon tax base should be broadened to include industrial process emissions from cement, lime and aluminum, and further consideration given to the possibility of including natural gas–venting emissions.

R. Hawes (Chair): Thank you. Just a question. When you say cement, are you talking about concrete, or are you talking about the actual manufacture of cement? The cement industry was in here an hour ago laying out…. The B.C. cement industry will pay $14 million to $25 million per year on carbon tax. So they are included.

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M. Horne: Yeah. They are paying already for their combustion emissions. So where they are burning tires, where they're burning coal and where they're also burning some natural gas, those are all included under the carbon tax. The chemical processes involved in producing cement also actually release greenhouse gas emissions, and those emissions are not covered by the carbon tax currently.

R. Hawes (Chair): So that's what you're talking about here?

M. Horne: Yup.

R. Hawes (Chair): Okay. That's clear.

B. Ralston (Deputy Chair): My question was just along the same lines, from the cement sector. They apparently have hired Mr. Jaccard, who's the all-purpose guru in these matters. He concurs with what they're saying — that the impact of the carbon tax just on their production inputs, primarily coal, will make their operations at three cement plants in British Columbia uneconomic. I think they said by 2010 — $20 million a year.

You're proposing a further impact of carbon tax on their operations. Have you had any discussion with the cement sector or with Mr. Jaccard about the impact of the tax on the economic viability of the industry here in British Columbia?

M. Horne: I have had discussions with the cement sector about the proposed cap-and-trade system, not specifically about the carbon tax implications. I haven't had discussions with Mark Jaccard about the cement industry specifically.

My perspective is that there definitely is an impact. There's no question that you're putting a financial burden, through the carbon tax, on those industries.
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We've also been supportive of the approach of recycling those revenues in the form of tax cuts. If those dollars are coming in, we don't have any problem with them being recycled to the industries being affected so that the signal is still there to reduce emissions. But their overall profitability doesn't have to be impacted if they're able to move forward and reduce emissions.

D. Hayer: I have a question for you, because we had some of the business organizations…. They said that right now is the wrong time to have a carbon tax and to maybe delay the next phase of it. Then we have the opposition leader, who has said that if they form the government, they're going to eliminate this anyway. And then we have some MLAs running ads saying: "Slash the carbon tax."

I'm just trying to get your opinion. Where should we be going, looking at the economy changing around the world? Markets were crashing lately, which is much different than when we brought in the carbon tax last year at this time. The economy was much different — the Canadian economy, the world economy. Considering that, especially with opposition to another one, how do you sell it to the public?

M. Horne: It's a difficult one. I'm out there talking about it as much as possible as well. There's lots of concern about the economy. There's no question about that.

In many ways B.C. is on the vanguard of the carbon tax approach. Whether it's a carbon tax or a strong cap-and-trade system, there are similar impacts on the economy. We shouldn't be placing ourselves in a box where it's trading off the economy against the environment.

All the modelling I've seen — and admittedly, it is modelling — shows that a carbon tax approach or a cap-and-trade approach can be very beneficial to the economy, especially if we're finding effective ways of recycling that revenue into the things we want to encourage, whether it's income or whether it's jobs.

There are some studies that show that a carbon tax with a revenue recycling in the tax cuts can lead to increasing overall economic growth. Others show basically a break-even, and others show moderate losses. So I think there are ways of managing that and thinking credibly in the way we recycle the revenue that we're not exposing B.C.'s economy to undue risks.

R. Lee: Along the same line, we heard that for the cement industry, they are not competitive if they have this carbon tax on fuel. Now you propose that even in the processing, they release carbon dioxide. To be competitive, what can you suggest to keep the cement industry here so that they are competitive?

M. Horne: First of all, it's important to look at it on a case-by-case basis. I haven't seen the cement numbers. But if we just take it that they are sort of exposed to competition because of the carbon tax, I don't see any reason why we can't be recycling those revenues just so that B.C. has a more competitive business tax rate so that their overall tax burden is very similar. Presumably, then they are still able to maintain competitiveness with competitors in the Pacific Northwest and around the world, and then they have a strong signal to reduce emissions.

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In the case that they are able to effectively retrofit plants and drive down emissions, they become that much more competitive. And if they're unable to move forward, they're in a sort of status quo position if the revenue is recycled effectively to maintain their overall tax burden.

R. Hawes (Chair): With that, thank you very much for your submission.

The B.C. Child Care Advocacy Forum is here. That's Pat Frouws and Darcelle Cottons.

Welcome, and the floor is yours.

P. Frouws: We'll switch gears from cement to children.

R. Hawes (Chair): Close, very close.

P. Frouws: They both start with "c." That's about it.

I'd just like to read our brief to you, and then Darcelle and I can respond to questions afterwards.

The B.C. Child Care Advocacy Forum welcomes this opportunity to appear before this committee again this year to make the case that the best choice B.C. can make in the 2009 budget is to invest in a universally accessible, high-quality, publicly funded system of early childhood care and learning.

The advocacy forum is an alliance of six provincial child care organizations that have worked together since 1999 to advance a common vision and agenda for child care in B.C. Together we represent thousands of front-line providers and employers from all types of child care, families and concerned citizens.

As a result, our positions reflect the highest level of consensus that exists within B.C.'s child care community today. The evidence and the lived experience of B.C. children, families, caregivers and communities support this high level of consensus on four key points.

The first one is that current policy approaches to child care have failed. Second, as a result, child care in B.C. is in a crisis. Third, there are solutions. Fourth, others do it, and we can too.

Under the first heading, "Current approaches have failed," since 2001 B.C. has cut $40 million from its own child care budget. These cuts were being restored with federal transfer funds that under the early learning and child care agreement, were designated for child care and couldn't be spent on other things.
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As we all know, in 2006 the federal government cancelled this agreement, replacing it with a taxable allowance of $100 a month to families for every child under six. They also transferred some funds to B.C., which they hoped B.C. would use to build child care spaces.

B.C. was the only province in Canada to pass the federal cuts directly to families and caregivers, arguing that parents could now use their federal benefit to pay higher child care fees.

B.C. then spent close to $100 million in remaining federal funds in a flurry of one-time-only untendered expenditures that did not build a system. Since then B.C. has continued to limit its involvement to a subsidy program for low-income parents, small operating grants to providers and partial capital grants for minimal space creation, without a public accountable vision of where they are headed — all without a plan, without time lines and without targets.

Instead, the provincial action has shifted to the Ministry of Education, which is exploring early learning programs for three-, four- and five-year-olds regrettably with little, if any, reference to the care that young children and working families need.

It is no surprise that child care in B.C. is in crisis. In fact, we expect that based on what you hear from your own constituents, you know that we're not crying wolf.

On three key measures, child care in B.C. is moving backwards. Parent fees are up from 2001 to 2006. The average annual child care fees for preschool-aged children in B.C. went up by $672. For school-aged care, the increase was more like $800.

In the city of Vancouver, child care fees often top $1,000 per month for infants and toddlers. That's vastly happening also in the metro areas like Burnaby.

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Wait-lists are long and growing. B.C. only has regulated spaces for about 15 percent of the children in our province, and waiting lists, especially for infants and toddlers, can be years long. Recent media reports also highlight the shortage of before- and after-school spaces. The 2,200 promised new spaces that federal transfer payments are helping to fund won't close the gap, especially given that without adequate support, existing spaces continue to close.

Wages remain at poverty levels. In 2006 the median gross hourly wage for B.C.'s college-trained caregivers in group child care centres was only $12.58 an hour. For many caregivers, wages have in fact gone down. Early childhood educators are leaving the field for jobs where they can earn enough to raise their own families, making it even more difficult for communities to provide quality care.

Children, families and child care providers are paying the price for failed policies. Their sacrifices are part of the hidden cost of B.C.'s current economic strength.

There are solutions. The good news is that we do have solutions. Child care crises can be solved if B.C. makes a commitment to build a child care system based on sound policies. The current examination of expanded early learning programs for young children indicates that B.C. may now recognize that the founding principles of our public education system — legislative entitlement, universality and public funding — are equally important to sound public policy for younger children.

Enshrine universal entitlement for young children. Just as every child has the right to attend school, it's time to ensure that every child also has the right to access a high quality, regulated child care space if their family wants or needs it.

Let's end the false divide between early learning and care. B.C. currently separates its policy, planning and funding of early learning programs from its approach to child care. This does not meet the developmental needs of young children or the needs of B.C.'s working families. It's time to end the divide and build a truly integrated system of early learning and care.

Provide adequate sustained public funding. In a publicly funded child care system parent fees could be a fraction of what they are now, and child care workers could earn a living wage.

Canada's shameful record on child care has been well documented. The OECD reports that Canada still spends less on early childhood education and care services than 13 other developed countries. Canadian children still have less access to early childhood education and care services than those in 19 other countries.

These jurisdictions recognize that investing in young children is sound economic and social policy. They recognize that investing in child care promotes healthy child development; reduces the cost of education, health, criminal justice, social services and income assistance down the road; supports the labour force attachment and productivity; and builds strong, inclusive communities.

We agree with B.C.'s Budget 2009 consultation paper that it's about choices. Here are ours.

B.C. can maintain a strong economy by investing in quality, affordable child care. Given the current economic uncertainties, some will likely say that we can't afford child care. But B.C. still has the fiscal capacity to build the child care system we need. Now more than ever, continued economic strength depends on a substantial investment in child care.

B.C. can better support communities by investing in quality, affordable child care services. This creates local jobs, generates local spending, makes it possible for communities to attract and keep young families and builds social cohesion.

Finally, our choice for shaping B.C.'s future is to put the needs of young children at the top of the agenda and ensure that they get the best possible start by investing in quality child care programs. B.C., we believe, has the strength and capacity to get the job done. Now let's get on with it.
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R. Hawes (Chair): Thank you.

D. Thorne: I'm looking at your solutions. Thank you for the presentation. We had a presentation last night from the coalition. We discussed the same issues, so we're all aware that the crisis is upon us.

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I was sitting here and thinking: what could I ask that I didn't ask last night — you know, to put it on the record? I'm looking at No. 3. I'm not sure when the separation occurred or if you folks have any idea why. Was there consulting with the…? I know there's the child care committee, and I know that Wendy Cooper was the chair, I think, at that time. She lives here in Coquitlam, as do I. Actually, we're friends. But what was the rationale for that? Do you folks know?

D. Cottons: Not how the decision was made to separate the issues, but there's a sense that education and child care are two separate things, when really the learning that happens with children happens all day every day in whatever situation they're in. It's ensuring that the support systems that are in place to help those children and to be with those children integrate both things.

So it became the us-and-them thing — that child care is about just physical care, and education is more rote learning in desks in a more structured environment, which we know, and research proves, doesn't work well for children under the age of four.

D. Thorne: If you could get some information on that to the committee over the next little while — like a week or so — I think that would be very helpful when we're doing our final recommendations. If I don't understand it, I'm pretty sure that…. Well, I shouldn't say that. I was going to say that maybe nobody else on the committee really knows how that happened either. Perhaps they do. But that would be great.

P. Frouws: It is a puzzle for us as well, because the early childhood educator licence required for preschool or child care…. It's the same qualifications.

D. Thorne: Yeah. It's very strange. Maybe you could talk to Wendy and get something for us.

R. Lee: Thank you for the presentation. You say that Canada spends less on early childhood education and care services than 13 other developed countries. Does the spending include…? For example, a family may not put their children in care, but inside the family they have early childhood education as well. So they spend their resource probably at home or in communities, not necessarily going through a formal child care centre.

If you understand my question…. Do you have any statistics showing that, overall, a child individually is getting less care than in other countries?

D. Cottons: We're talking about publicly funded services, comparing other countries' publicly funded services — things that might have government support, like preschool, mom-and-tot programs, things through the health system, anything that has to do with children under the age of five. But if you're talking about informal music lessons or things that parents dole out money for separately, no, it would not include that, anymore than it would include, for school-aged children, hockey and those other things.

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

Next we have the B.C. Brain Injury Association — Margaret Ickert.

The floor is yours.

M. Ickert: Hello. As you are aware, my name is Margaret Ickert. I'm with the B.C. Brain Injury Association, and I'm very glad to be here today to speak to you on behalf of the people with brain injuries in the province.

Our mandate with B.C. Brain Injury Association is two very straightforward tasks. The first is to help promote brain injury prevention initiatives, and the second is to help advocate for services to and for people and individuals and families with brain injuries. Today I'm hoping to appeal to this committee to help us correct what we see as problems throughout the province in the delivery of services to people with acquired brain injury.

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It is our assertion that if the services to people with acquired brain injuries were delivered in a more efficient, more cohesive fashion, we can save the province, the taxpayers, a tremendous amount of money.

Now, it's not to say that the services to people with brain injuries are all bad. That's not true. There are some excellent programs in the province just now as we speak — excellent programs. The problem is that the services are fractured.

Several years ago the health authority assumed responsibility for delivering brain injury services throughout the province, and at that point we started to take steps backwards in terms of the ability to service this community. The results of that we see every day.

We are seeing an increase in homelessness. We're seeing an increase in recidivism rates with crime. We're seeing all kinds of problems, and we know that we can address them better, and we know that the services to people with brain injuries need to be addressed not simply at the acute care level but in the long term.

Brain injury is forever. It's not something we recover from. For example, in terms of showing you a program that is working, that is doing well, I would share with you some of the results from a partnership that was recently developed with Interior Health with the Canadian Mental Health Association in Kelowna.
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It's a pilot project that's still underway, and their initial report is showing some fantastic results. What they did is they partnered mental health practitioners with brain injury practitioners, because they realized that a large portion of the homelessness and the homeless people in Kelowna were also people living with a brain injury.

It is a very simple, cost-effective program funded by Service Canada in partnership with Interior Health, where they have taken a small group of, I think it was, 13 people. The results have been amazing. They've taken people who were not well serviced, not well attached and not progressing. The mental health practitioners were able to help educate the brain injury practitioners, and the brain injury practitioners were able to help train the mental health practitioners. Together they've made partnerships and been able to very successfully move people forward.

For an example, in terms of the cost of brain injury to the people in this province, let me give you some of the numbers that we have. Now, I will apologize. Some of the statistics that we have in Canada and in B.C. are not terribly accurate. The reason for that is that the bulk of our statistics comes from the States. So what we have to do, unfortunately, is rely on some mathematical wizardry to sort of relate it to Canadian populations and Canadian statistics.

Right now our worst estimate is that there are 33 new acquired brain injuries in the province every day — 33. I know. It's staggering. We also have seen statistics that say it's as few as 16 a day, every day, but even at 16, that's staggering.

Knowledge Network recently produced a film where they actually said that at this point head injury, brain injury, is the number one killer of young men in Canada under the age of 45 — the number one killer and disabler. So these are the numbers we're looking at.

In the province of B.C. we have some statistics that we think are fairly accurate, and those say that people with acquired brain injury are four times more likely to commit suicide than people with a typical mental illness. Why is that? Our assertion is that it's because they are not able to access services the way they should.

What typically happens is that someone with an acquired brain injury will go for mental health services. Mental health will say: "Oh, your primary disability is brain injury. Go get brain injury services." Brain injury will say: "Well yes, you have a brain injury, but you're really struggling with mental health issues. Please go back to mental health." So we play this game. Again, the Kelowna partnership is an excellent example of what has gone right and what we can do.

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People with brain injuries are three and a half times more likely to develop major depressive disorders, five times more likely to develop bipolar disorder and four times more likely to develop schizophrenia. In people incarcerated, we are seeing 88 percent in some statistics. We're seeing that anywhere from 15 to 20 percent of police contact in the streets with homeless people, they feel, is a combination of mental health and brain injury.

We recently had a conversation with one of the staff at the new community court in B.C., the new community court in downtown Vancouver. They're saying that they are constantly seeing people with brain injuries, and again, they don't know where to send them. They don't know where to access resources for them.

What I'm hoping today is that you will appreciate that we need to do better for people with brain injuries in this province. Specifically, we'd like three things to happen. We would like to see a central organization similar to the BCBIA, which I represent.

At one point we were funded to provide that central piece to make sure there were services delivered throughout the province and that there was a central contact person. So a social worker in Chetwynd can phone and say: "Where do I get services?" "Here you go. This is the community contact that you need to be in touch with." GPs are asking for that, social workers are asking for that, the police are asking for that, and we know that that service needs to happen.

The second thing that we're hoping with a central organization to support brain injury services is that we can also move forward with better training. Social workers need more training, corrections officers need more training, and it needs to happen consistently and cohesively across the board and throughout the province.

We had a call last week from a parent who is absolutely flabbergasted and frustrated that a year post-injury her child's teacher said: "Well, why do you still have services? It's been a year now. Get on with it." That's a typical example from the school system. We need to educate right across the board.

The second thing we'd like to see is better funding for resources that will address the ongoing post–acute care needs. Generally speaking at this point, we're finding that the ABIP programs that the province is funding, the acquired brain injury programs, are overwhelmed, and they're underfunded. They themselves are absolutely exhausted, with wait-lists of ten months for acute care.

I'll give you a good example. We had a client last year who was homeless, who was hungry and, because of a variety of circumstances, wasn't able to access his LTD from his former employer and wasn't able to access income assistance. He was so hungry that he actually killed one of his pets and ate it. When we phoned for acquired brain injury services to pick up the lead, they said: "My gosh, that's terrible. We'll get him on our wait-list as fast as we can." It's not good enough. That is simply not good enough.

Like I said, there are some excellent services out there in the province. There are some excellent partners in
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the community that are willing to work with us, but the main point that I want to impress upon you today is that the cost of underfunding brain injury service is tremendous to the taxpayers. It's tremendous to the workers in social service, it's tremendous to police, it's tremendous to corrections, and it's incredibly difficult for the taxpayers to continue to fund services that aren't meeting where they're supposed to be.

That's pretty much all I have to say today. I hope it's clear. I provided you some paperwork there. I didn't want to overwhelm you with a bunch of documents. I thought you could look at them on line. They're great. They're nice and concise.

The 2002 guidelines there. I'm almost embarrassed to point you to that because it is old, but that is one of the last good looks that we had formally done in the province about brain injury services.

Last spring we had the Health critic, Adrian Dix, pose questions to the Health Minister about brain injury services: what has been done, and what follow-up has been done since the 2002 guidelines? To date we've really had quite a vague reply to those questions.

The reply we did get was that the Health Minister was aware of the problems and that he was addressing them under the ten-year mental health plan. We have since spoken to a director in mental health, and he said: "No, sorry. That's not correct. Brain injury is not being addressed in the ten-year mental health plan."

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That's how fractured the services are. Our own Health Minister is not clear on what's happening and where the funding is.

R. Hawes (Chair): Okay, thank you.

Questions?

Maybe I'll just ask you: it's the Provincial Health Authority that now has the responsibility for this?

M. Ickert: Provincial Health Authority does. Right now we have in the five health regions…. Brain injury services are managed in four of them through Health, and in the north it's managed through mental health.

Again, each region is providing services as it sees fit. What we're asking for is that…. We need to have a central body that is aware of where the services are within the health authority in each community. We need to have a better understanding of who is providing services, how they're accessed and when and where services start and stop.

Our primary concern is that at this point the services are by and large focused on acute two years post-injury, and the long-term health needs and care needs and ongoing care needs…. Of course, as brain-injured survivors age, we do see digressions. We do see more family breakdowns, employment breakdowns.

R. Hawes (Chair): That function, though, was at one point done by the Brain Injury Association.

M. Ickert: It was at one point done by our organization. When they dissolved that process and spread it out amongst the health authority, that's when we really started to see the wheels on the wagon fall off for brain injury.

R. Hawes (Chair): So if it were to go back, then, what's the cost of running that program if, for example, the Brain Injury Association again took on that duty?

M. Ickert: Well, it would be very, very small. Really, the cost-effectiveness of it would be fantastic.

R. Hawes (Chair): Can you put that into order-of-magnitude dollars?

M. Ickert: Yeah. In our last conversation at our board meeting we were looking at approximately $250,000 to run that. That would provide staff. That would provide education. That would provide awareness. We're talking about a very small amount of money.

What we don't want to do is get into providing direct services to clients. The health authorities are doing some good work out there, but the challenge is that they don't talk to each other. A lot of the services are contracted out, and it becomes very competitive.

I was recently at a conference, and just about every single player was offering an education program in the school. They'd spent a ton of money, each and every one of them, to develop the program. Why is there not just one program? How much money was spent in organizing that? It's ridiculous.

R. Lee: The acquired brain injury is physical, and mental health and other problems are actually more on the functional side. Are there any statistics on the correlation between those two? Are you aware of that? Is any brain research centre doing anything on those correlations?

M. Ickert: Well, in terms of brain injury, the statistics I read to you, again, are primarily extrapolated from the United States because there is no one funding that right now in Canada. Are you asking me how many people with brain injuries move on to have other difficulties?

R. Lee: Yeah.

M. Ickert: Yes. If you refer to the documents I provided. If you want to go to the BrainTrust report. It's a very nice…. I picked that one because it's very simple. If you weren't involved in that community, you can quickly garner that.
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People with acquired brain injury are three and a half times more likely to develop major depressive disorder, five times more likely to develop bipolar disorder, four times more likely to develop schizophrenia. We're seeing children and teens with brain injuries go on…. I can't remember exactly what the statistic is, but I think it was two-thirds more likely to be involved in crime.

Again, if we support those brain-injured individuals early on and maintain the support over time — and that's key; it has to be maintained over time — we're going to see a reduction in those costs.

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

We're going to move on now to the Greater Vancouver Alliance for Arts and Culture — Roger Chilton and Ivan Habel.

The floor is yours.

R. Chilton: Thank you very much. My name is Roger Chilton, and I'm on the board of the Downtown Vancouver Association and on the Community Arts Council of Vancouver. I'm here to represent the interests of Arts Future B.C.

Arts Future B.C., as you may or may not know, represents, is made up of, the Assembly of B.C. Arts Councils, the B.C. Museums Association, the B.C. Touring Council, the Canadian Artists Representation of British Columbia, the Greater Vancouver Alliance for Arts and Culture, the ProArt Alliance of Greater Victoria, the Professional Association of Canadian Theatres and an organization known as the Citizens for the Arts.

Arts Future B.C. represents the interests of the future of arts and culture in British Columbia and, in doing so, really represents the interests of all British Columbians and the interests of the province of British Columbia, the government of British Columbia, because what we know now is that we are in a new world economy. This is an economy that's a creative economy, and it's driven by ideas, innovation and communication.

We're reminded every day that our future prosperity lies not simply in our economic wealth. Our future prosperity lies in our education, health, community development, cultural development and social development, and it really depends upon contributing to the quality of life for all people, because we can see what's happening.

In British Columbia our natural resources have made us very prosperous in the past. We have an opportunity in British Columbia for our creative resources, which are substantial, to make us prosperous in the future, and we need to invest in this creative economy.

So where are we now? Our investment in our cultural and creative resources hasn't changed significantly over the past year. The $150 million endowment fund that was created by the provincial government last year will certainly provide more funds for the British Columbia Arts Council, but it will still not bring their budget to the $32 million that was recommended last year. In addition to that, the highly leveraged $25 million Renaissance Fund that was created in 2005 is going to be depleted by the end of 2008, two months away.

This program, which has been highly successful, has been matching grants for endowments and, in doing that, has contributed to more than 160 arts organizations across the province and is creating a perpetual investment in the arts for these communities for the future.

More significantly, what we're becoming aware of now is the need for cultural facilities in communities throughout the province. The city of Vancouver has created a cultural facilities development strategy in response to its awareness of the need, and other communities — like Kelowna, Nelson, Chemainus and Langley — have all put development plans into place that are focused on arts and culture, to drive their economies and the social health of their communities.

So that's where we are now. The good news is that we have the cultural and creative resources. The good news is that the investment needed to capitalize on those resources, to develop those resources, is relatively modest, and the contribution to our cultural, social community and economic development is highly leveraged with every investment we make in our arts and culture.

[1720]

What we recommend, as Arts Future B.C. and all the people in this province that Arts Future B.C. represents, is that the government of British Columbia increase the budget for the British Columbia Arts Council to $32 million, as was recommended last year; that the government renew the Renaissance Fund with another $25 million; and that the government also conduct, as are many communities throughout British Columbia, a comprehensive review of our cultural facilities and develop a cultural facilities development plan, a strategy for the province of British Columbia for the future.

That's in some ways a modest investment. The cultural facilities could be a significant investment, but what about the return on investment? Well, this is what we know about investing in arts and culture. Investment in the arts and in our cultural resources enhances education. It promotes health and healing. It contributes to our community development, our economy, our employment growth and our ability to compete and contribute in the future. It's a very wide-ranging and very high return on investment.

We know that in the world of education, participation in the arts contributes to the development of academic skills, to our reasoning ability and to our creativity, problem-solving skills and expression. They contribute to the development of positive social skills, self-confidence, self-control, conflict resolution, collaboration, empathy
[ Page 2186 ]
and social tolerance, and they nurture a motivation to learn, particularly with students at risk and with special needs.

In the area of health and healing, research has shown that the arts improve the health and well-being of both individuals and communities. Cultural activity contributes to improved community identity and social cohesion, community revitalization and the redevelopment of inner cities.

The arts are particularly effective with youth at risk, people with disabilities and older citizens, where health care and social system costs are the greatest. The arts also contribute to create connections. Participating in arts activities has proven to reduce youth violence, help prevent drug addiction, contribute to rehabilitation and be a critical element in mental health treatment.

The arts increase our understanding of our common interests and our appreciation of our differences. The Canadian Council of Chief Executives has concluded that artistic and cultural creativity has a direct impact on quality of life and on the competitiveness of communities in attracting people and investments.

So the arts contribute in many ways, and they contribute more than simply to our economic and employment growth. The creative economy is leading the growth of all economic sectors in British Columbia. The economic impact of the arts on our creative resources is greater than simply employment or economic multipliers. Creative industries need creative people. Creative people are attracted by opportunities to experience and engage in the arts.

The arts also, finally, stimulate discussion and creative thinking. Our world is wrestling with environmental and human sustainability challenges. Our future depends upon our ability to learn how to connect, communicate and understand one another, to create intercultural relationships and to work together to create new ideas and ways of doing things. There's more need now for creative problem-solving than ever before.

The arts create connections, stimulate divergent thinking and discussion, and build communities around common concerns. Investment in our creative resources is an investment in the contribution we can make to the challenges we're facing everywhere around the world.

How will our investment recommendations contribute? First, increasing our investment in the B.C. Arts Council will create the fastest response in our development of any investment we can make.

Secondly, renewing our Renaissance Fund will continue to contribute to creating more perpetual investment for the arts in the future. And investing in our cultural facilities will allow us to continue to attract and develop our creative resources to contribute to healthier communities, healthier children and a healthier future for British Columbia.

Increasing our investment in arts and culture will demonstrate to the world that British Columbia is a culturally diverse and creative place to live. We have the unique opportunity here in British Columbia, because of who we are and because of what we've got, to become known not simply as "Super, Natural British Columbia" but as "Creative British Columbia." Because we have that opportunity, it would be a shame to miss it for such a small investment in a very large future.

R. Hawes (Chair): Thank you.

D. Thorne: Roger, thank you, and Ivan. It's very interesting. We do know that arts are important in a lot of ways, and you've pointed out all of the ways.

[1725]

Now, what I'd like to ask you about is…. One of the complaints that I heard as a city councillor here in Coquitlam over the years was from people from outside of the Lower Mainland who feel that the money the province contributes to arts is overwhelmingly spent in southern British Columbia, like the B.C. Arts Council. So I'm wondering — I'm sure you've heard the same thing — if you have a position on that or something you'd like to say into the record about that, because we will hear that.

I. Habel: I can certainly speak to that somewhat, and I'll speak to it on a couple of different fronts. First of all, I sit on the advisory committee to the Renaissance Fund that was created, and I can assure you that that investment has been spread very far and wide — that there's not particularly a preponderance of granting that's going on in the Lower Mainland but a pretty wide distribution across the province.

Whereas the physical numbers may look like a larger investment in the Lower Mainland, that's only because the population density in the Lower Mainland is greater than it is in the north or in the Kootenay region. But those investments were spread out across the province.

D. Thorne: And you would say the same for the arts council?

I. Habel: Yeah, and again, having sat on a couple of peer assessment juries for the arts council, absolutely. I've witnessed it both on a project-granting front and on an operational-granting front.

I'll also give some more personal anecdotal kind of evidence of how that money is utilized in the province. The company that I work for, Green Thumb Theatre, tours shows to schools and community centres and community venues across the province. Last year we performed in 89 communities across the province to over 80,000 youth and adults. Those communities were from Masset to Atlin to Sparwood. It's pretty hard to get more geographically encompassing than that.
[ Page 2187 ]

R. Lee: Some of the arts community, actually…. For example, the Vancouver Symphony Orchestra is getting support from the government as well as from the community — from individuals, corporations. So with the economy improving, they are getting more resources now than a few years ago.

My question is actually on the cultural facilities. For example, you mean a review of all the facilities in B.C. — right?

I. Habel: Yeah.

R. Lee: You mentioned that you are suggesting that government should do that. Do you know the scale of, say, how much resource or money — dollar value — on the review?

I. Habel: I'm not sure that there's a set dollar value at this point. I know that other provinces are making those kinds of cultural infrastructure investments, so that you have amounts like $200 million set aside in Alberta and $600 million set aside in Ontario.

I know also that the ministry in 2007 had conducted a study that was a basic survey, and certainly, from that study some further financial details could be worked through.

I think it's important to understand that the overall investment for cultural infrastructure for facilities and major capital projects, largely in the non-profit sector and equally so in the arts and culture sector, requires some sort of impetus to get an active program of fundraising and capital acquisition underway.

That often needs to rely on government sources as that key spark that will bring in the other revenues necessary. So I don't think that a cultural infrastructure program or a facilities and capital projects program undertaken by the province is a be-all and end-all, and I don't think that that's what the arts community is looking for. It is certainly looking for a major impetus to help those programs move forward.

B. Ralston (Deputy Chair): Thanks very much. We heard from Mr. Drance on the Renaissance Fund, so I think we're up to date on that.

[1730]

You mentioned the annual sum of $32 million. There was a very substantial endowment into a cultural fund, which would generate revenue annually. So what do you calculate the gap, if I can put it that way, to be between the $32 million and the revenue generated by the newly created arts endowment fund?

R. Chilton: That's probably anybody's guess right now, given the economic conditions, but I think it sort of brings it up about close to halfway to where it might be.

I. Habel: Yeah. Again, it's hard to say, because it's not a fixed allocation; it's a result of investment earnings. Some of it plays into that uncertainty about what exactly your budget is until you've seen the results of the investments.

One of the things that artists and arts organizations across the province certainly need and look for is an ability to have an underlying support for continued growth and for the arts council to build an ability to increase and expand its reach to emerging artists, of whom there is a very high number in the province.

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

Marni Davis from L'Arche Greater Vancouver is here.

The floor is yours, Marni.

M. Davis: My name is Marni Davis, and for the last 35 years I've been part of an organization called L'Arche. I've worked for the organization at the local level, at the national level and at the international level.

I want to say a little bit to you this evening about who L'Arche is, what our concerns are and what we are asking of you. I know by this point in time you're probably suffering brain death from all the listening you've done, so what we have to say is actually very simple.

Basically, L'Arche is and was founded by Jean Vanier, who is the son of Georges Vanier, who was the former Governor General of Canada. Jean is the recipient of a number of honours and awards, including the Order of Canada, that recognized his humanitarian work and leadership on behalf of people with disabilities around the world. If you're having trouble locating who he is, a few years ago he gave the Massey Lectures on CBC radio.

Our model is to form intentional communities in which people with developmental disabilities and those of us who assist them, build friendships by living and working together. By living communally, the people with disabilities and the assistants share life together.

We are also a large-scale movement. We are 135 communities in 36 countries and 27 communities across Canada. L'Arche is multicultural, multigenerational, ecumenical and interreligious. We've established a record as a world leader in responding to and advocating for individuals with developmental disabilities, often working through UN human rights organizations.

[1735]

In this country we've been singled out by Canada Mortgage and Housing Corp. as the best practice in Canada for "group home" living, I think because of our communal model of people living together with the people that are giving care.

In Vancouver we are a registered charitable organization, established in 1974. We are an intentional community comprising six homes and two day programs
[ Page 2188 ]
in South Burnaby. We received the highest standard, the three-year accreditation, from CARF, which is our accreditation body. At the moment we're a finalist for the Burnaby Board of Trade's Excellence Award for 2008 for non-profit of the year. So we're not a flaky organization by any stretch of the imagination.

I have to say that it was with considerable alarm that…. When we saw the budget consultation we were quite concerned that it made no mention of supports for adults with developmental disabilities. I noted that it commented about supports for seniors, children and people with mental illness and addictions, programs for housing and homelessness and a program called StrongStart early living centres, which I would hope would be of some benefit to kids with developmental disabilities. But it doesn't really address, probably, the needs of adults with developmental disabilities.

Folks with developmental disabilities are often dependent on others to meet their most basic daily needs for food, shelter, personal care and ongoing education and training. It makes these people among the most vulnerable and fragile of our fellow citizens.

It's no secret today to the families or to those working in the field with adults with developmental disabilities that Community Living B.C. is seriously underfunded and is lacking the ability to meet the needs for support and services for many individuals already in care and on wait-lists.

I believe you heard a presentation from the B.C. Association for Community Living. I think the B.C. FamilyNet Society had hoped to meet with you. If not, they're probably giving you a written presentation, and you may have heard from other groups as well.

In 1996 B.C. completed the closure of the institutions, and that was the result of the efforts of a number of governments of various political stripes. It was really an incredible achievement. It was a very proud moment for B.C., and it really underlined the province's commitment to be a leader in North America in providing for citizens with developmental disabilities. But today — and I hear this because I travel across Canada and I have contacts internationally — we're kind of losing that hard-won reputation. We're kind of going backwards. We're losing ground at the moment, and it seems to be because of financial constraints.

I want to say a little bit about the impact insufficient funding has — what we see from our perspective. Other people, other groups may see it from a different perspective, but from what we see in the day-to-day from our perspective…. I just wanted to comment on that.

The insufficiency of funding for Community Living B.C. is having a number of impacts. Higher-needs adults with developmental disabilities are in day programs, principally, often sponsored by L'Arche and other agencies. Sometimes these programs are underfunded, and then they're understaffed.

The consequence of that is that individuals aren't able to receive the time and attention that allows them to continue to learn and grow to their fullest potential and to become members of the much wider community, to experience that integration into the wider community. It's becoming, for us, increasingly difficult to attract and retain caregivers who are able to exist on low wages, and the impact of that is that the continuity and quality of care for residents is a growing problem.

We're seeing that long-term skilled and experienced caregivers who are best able to meet the needs of the individuals because they've known them often for years — in my organization we have a number of people who've been with us for a number of years — are needing to leave the field in order to get better-paid employment elsewhere.

CLBC has a preferred and less expensive residential care model called home-sharing, and it works very well for individuals who are relatively independent. But it has some weaknesses. It doesn't necessarily adequately address the care costs and the needs for men and women with high needs, complex behavioural issues or some of the challenges posed by aging, principally because it often takes a network of caregivers and professionals to support some of these individuals. The home-share model doesn't always adequately allow for that.

[1740]

L'Arche and other agencies are being increasingly approached by families who are desperately seeking residential care or day program services for a relative. They are unable to get an adequate response from CLBC, and they're making the rounds of the agencies, looking for any assistance that might be available.

L'Arche and other agencies are more than willing, I gather from my conversations with other agencies, to welcome new people, in response to the wait-lists of individuals needing services. But we can't do that without adequate funding support.

The upshot is that the failure to inject more funds into Community Living B.C. places highly vulnerable people at risk. So we're really asking and requesting and recommending that you revisit your priorities and make a significant and urgent allocation of additional funding to Community Living B.C.

My basic message to you this evening is that when you do your report, please, please don't forget these people.

B. Ralston (Deputy Chair): I'll just take over, in the absence of the Chair, for a moment.

Are there questions? I have one, but anyone else?

R. Lee: Thank you for the excellent presentation. I just want to know. If funding is injected into Community Living B.C., then are there any individual programs that you think would have a higher priority — for example, individualized funding, that kind of thing?
[ Page 2189 ]

M. Davis: I'm not sure I understand the question.

R. Lee: Individualized funding.

M. Davis: Yes.

R. Lee: Those programs are within the system, and there sometimes is a lineup for funding. So inside Community Living B.C., there may be certain priorities you think should get funding ahead of others?

M. Davis: I would hesitate to say an opinion on that. My impression is that Community Living B.C. needs more funding. We're hearing about extensive wait-lists. CLBC is very hesitant to say how many people are on the wait-list, but my impression is that there is quite a number.

Certainly, by the number of people who are knocking on our front door and who I'm hearing from other agencies are knocking on their front doors looking for all kinds of things for their relatives, I would say CLBC just needs more funding — period.

B. Ralston (Deputy Chair): Thanks very much. We did hear, from some parents and their children in earlier hearings, really powerful stories about the impact that a lack of support is having on the family and, more importantly I suppose, on the child concerned.

Is your concern, then, just that there be generally more funding to Community Living B.C., or do you have any specific recommendations in terms of budget? Or is it that you're not familiar enough with the budget exactly to make that kind of comment?

M. Davis: I don't think I would be familiar enough with CLBC's budget, but certainly, being on the ground in the day-to-day, it's abundantly clear that they need more support.

D. Thorne: I'm just wondering. I don't think I saw it in here, but I know that one of the large residential homes in Port Coquitlam here in the Tri-Cities has just found out that they have to cut four beds. I'm just wondering if you've had or if other groups…. Is that a widespread phenomenon? Have you heard of that?

M. Davis: I wouldn't know. You'd have to find out why they were cutting beds. Were people being moved into home-share, and was that why they were being removed? Or was it lack of funding? I wouldn't want to comment on anything from another agency.

D. Thorne: Okay, I was just….

M. Davis: There could be a number of reasons why that might happen.

D. Thorne: My office was just told that they were cutting back on service, that they were losing four beds. So we should look into that.

M. Davis: Yeah, you would need to explore that, I think.

D. Hayer: I had some individuals come to my office, and they said the home-share was working really well for you. What is your opinion on having a program such as home-share?

M. Davis: I think it's great for people who are quite independent. I think it's probably a model that would be more a normal model of family living. To be living with a friend or living with something that approximates a family or approximates something like foster care I think is a more normal kind of setting for people than to be in a group home.

[1745]

But the reality is that there are some people who need high, high levels of care for all kinds of reasons, and in those situations, a model that looks similar to foster care…. There just aren't enough people in place to do the support that's needed by the individual.

I think what we need is basically a spread of different programs. And I think CLBC is somewhat aware that that's a necessity.

For younger people and for people who are more independent, home-share is a great model.

R. Hawes (Chair): Marni, last year there was a great deal of angst in part of the community living sector about the advance directive. They felt that was going to supplant our representation agreements. Are you familiar with that?

M. Davis: No. It's a bit outside my frame of reference.

R. Hawes (Chair): I won't ask the question, then.

There are no other questions. Thank you very much.

At this point we are out of presenters. We're slightly ahead of schedule, so we're going to take another recess, and we will reconvene when we have the next presenters presenting themselves.

The committee recessed from 5:46 p.m. to 5:54 p.m.

[R. Hawes in the chair.]

R. Hawes (Chair): The next group we're going to hear from is the Simon Fraser Student Society — Joe Paling.

The floor is yours, Joe.

J. Paling: All right. I'd like to thank you guys for giving me the opportunity to speak to you today. My name is Joe Paling, as you all well know. I'm the president of
[ Page 2190 ]
the Simon Fraser Student Society. I represent 25,000 undergraduate students at Simon Fraser University. We are both an advocacy and a services organization, with a yearly operating budget of over $2 million.

[1755]

We operate food and beverage services, including a pub, a coffee shop and a cafeteria. We are involved in U-pass, which is a program that we do at the university as well as TransLink. We offer low-cost photocopies and an extended health and dental plan.

Our advocacy work includes a recent non-partisan voting campaign for the federal election, which will also translate into similar campaigns for the upcoming provincial and municipal elections. We work with TransLink on bus service conditions for all SFU students, and we meet with local, provincial and federal politicians on a regular basis to discuss students' concerns.

We are not a lobby group, but we do….

R. Hawes (Chair): But you do lobby.

J. Paling: Yes.

B. Ralston (Deputy Chair): Are you registered?

J. Paling: Less than 25 percent of our time is spent on that.

B. Ralston (Deputy Chair): Good answer.

J. Paling: Yeah, but maybe if we change the nature of our organization, we will have to.

What we're coming to you with today is four main proposals for what we want to see in the budget. We're not making any suggestions on where you should cut. Obviously, I understand that you're going to have to cut this year because of the slowing economy in some areas. We accept that, and we understand that there are some other priorities for the government.

I wish to speak to at least four main points. The first issue is funding post-secondary education. Now we understand that total funding to post-secondary education has gone up, especially with new capital projects — the new buildings that have been built at the institutions — but our main concern is about the full-time-equivalency grant.

We feel that it should keep up with inflation — be increased to it. Originally, when the cap was put in — the 2 percent cap on tuition — the report, which I believe was done by the Treasury Board, recommended that the FTE grant also keep up with inflation. Right now every year the students are paying a little bit more, and because of inflation, they are getting a little bit less because the FTE grant is not keeping up.

Now, we also understand that there are other strains, and I do like to say that students are pleased with the cap, in that it keeps tuition predictable and allows students to save over the summer without any surprises. That being said, other aspects of quality of education are at stake right now.

British Columbia universities have a very unique tutorial system. We excel in our research even at the undergraduate level because we have one-on-one instruction with our professors. You look at some institutions back east, and they have 1,000-person lecture halls with no one-on-one sessions. This is a cheaper way, but we think it is a way that we don't want to go. We want students to have a good quality of education in B.C., and we want Simon Fraser University to represent the best teaching institution in B.C. as well as a great research institution.

We also believe that with the changing economic times, with the slowing of the economy, more young people are going to be taking advantage of post-secondary education as well as older people who have to update their skills. With such a change in the economy, it is important for the citizens to be able to adapt.

As we are moving away from an industrial sector, which has happened for many years, and as we are much more integrated with the world market, we feel that having a knowledge economy in this province is very, very important. We definitely want to see the full-time-equivalency grant go up at least by inflation.

The second issue is the $6 billion cut that was announced at the airport. Now, we understand that there were budgetary concerns and that there was a need to put money into programs the province felt were necessary — especially nursing and stuff of this nature. The issue it really comes down to is that we really feel that the goal should be predictable, unchanging commitments once budgets are expected.

We have noticed at our own institution that we've sort of been catching up and trying to figure out places to cut. They've done some really good cuts at the institution. They got rid of water coolers, and that saved us $60,000 for the administration. We thought that was a prudent financial decision on their part. But they are still using money from cash on hand to fund some of the shortfalls. The previous year, because of the FTE not keeping up with inflation, they were cutting tutorials in some departments, so we had a couple of programs that were only offering lectures. To students, losing tutorials and labs means a real reduction in the quality of their education.

We also see problems when courses can't be offered every semester or every year. That means students have to take longer to finish their degrees, which means they incur more debt, which means they are out of the job market longer, which means they are not contributing to the budget of the province.

[1800]
[ Page 2191 ]

So to us, a last-minute cut is very problematic, and that's how we see this cut. Overall, the province education funding has not changed, but SFU's has.

The third goal is about access to education. The students I represent feel very strongly that they want to see a reinstatement of some sort of B.C. grants program. This becomes especially relevant with the sunset of the millennium scholarship, which offered retroactive grants to student loan borrowers and was a great program, with some good federal money coming in. So that was very helpful, but that's going to be gone soon.

The new national grants program that the federal government is now offering is actually going to offer less to each student in grants. It'll cover more students, but it's going to offer less to individual students, which means there's going to be a need for funding elsewhere.

We were very disappointed when the grant program was cut. We understand that there are financial burdens, and when it was cut, there were financial problems in the province in the sense that balanced budgets weren't exactly the norm in the mid-1990s to the late 1990s. So we understand, but now that we have a fiscally prudent government that has kept balanced budgets for quite a few years, we think the reinstatement of this program would be very helpful to students.

I don't think we should kid ourselves. Whether it be a grant or a loan, the student who gets that funding will be paying that back either way — one, through student loan payments or two, through their income taxes. And we all know that university graduates make more money over a lifetime than non–university graduates. Even arts graduates, who people sometimes don't like to point out, are…. It takes a little longer for them to get into the job market and everything. It still increases their earning potential by a million dollars. That means 10 percent of that is going to be brought back into provincial coffers.

The last thing I want to talk about is the student loan system itself. The federal government has announced that they're going to be moving to a student loan repayment schedule that is geared towards helping those who have the most difficulty paying it back — the people who remain low-income for a few years afterwards. They have the repayment assistance plan.

We would like to see something similar at the provincial level. Considering that student loans have an interest rate of 8.5 percent, we'd like to see a cut to the interest rate so that at least student loans were revenue-neutral or even less.

Those are our four major concerns, and we hope that the committee will consider that for the budget.

R. Hawes (Chair): Thanks very much, Joe.

D. Thorne: Just quickly. When were the bursaries actually cut?

J. Paling: The B.C. grant program you mean?

D. Thorne: Yes, I guess I keep….

J. Paling: That was cut in the first Liberal term in the first or second year, I believe.

D. Thorne: Okay, so it's been quite a while.

J. Paling: Yeah. I'm an older student, so I remember that.

R. Hawes (Chair): But they are back-loaded — correct? I mean, there are grants available.

J. Paling: The millennium scholarship came in a couple of years after that, and they're retroactively applied to student loans. So right now there are no upfront grants for students other than….

D. Thorne: That's totally different than a bursary program.

J. Paling: The grant program is not a bursary program.

D. Thorne: No.

J. Paling: Bursary programs are at the local level, at each institution.

D. Thorne: Okay, well, "grant." I'm calling them the wrong thing. But they were at the front end — the regular grants.

J. Paling: They were, and the millennium scholarship was at the back end. Each province chose how they wanted to implement the millennium scholarship. It's called a scholarship, but it's actually not based on academic performance. It's actually more like a grant.

D. Thorne: So the fees started to go up, and the grants were cut basically at around the same time.

J. Paling: Yeah.

R. Hawes (Chair): Any other questions?

Very salient presentation, Joe. You know, we have heard it. Yours had a couple of different twists to it, so that's appreciated.

J. Paling: I appreciate the time, and thank you very much for having me.
[ Page 2192 ]

R. Hawes (Chair): We have Pristine Power next and Harvie Campbell.

H. Campbell: Thanks very much. By the way, I agree with everything Joe said, as a former SFU alumni.

A Voice: You're still an SFU alumni.

H. Campbell: I'm still an SFU alumni. I think my student loans were paid off a while ago, though.

Good evening, Mr. Chair and committee members. I have been accused of talking softly, so please don't hesitate to tell me to speak up as necessary.

[1805]

My name is Harvie Campbell. I'm the executive vice-president of strategy and development for Pristine Power. I'd like to thank you for the opportunity to talk to this committee tonight on our views on the 2009-2010 provincial budget. I know these hearings can be long, so we've put our long-form submission in and invite you to review it at your leisure.

I would like to emphasize and highlight a few of the things we put forward there. First of all, I'd like to tell you a little bit about Pristine Power and what we do. We develop, own and operate environmentally responsible power generation projects in British Columbia and across Canada, using proven and — when we can — innovative, clean technologies to put the power generation in place.

I'm proud to say that the staff at Pristine have held senior management positions in developing over 3,000 megawatts of capacity across Canada and internationally over the last 20 years. That includes the majority of the IPP power being delivered into the grid today in British Columbia.

We are committed to contributing to the economic, social and environmental sustainability of the communities in which we operate, while sustaining growth and value for our shareholders. The former is an absolute must in the development business in British Columbia and every jurisdiction that we're active in today.

We demonstrated this by recently producing clean electricity at our new plant just outside Kamloops, at Savona, together with our partner ENMAX. We have also recently completed a plant at 150 Mile House in the Cariboo.

We are very proud of the fact that these two plants are the first projects from B.C. Hydro's open call for power in 2006 to begin commercial operations. Through the use of an innovative, alternative energy source, waste heat from existing gas compressors on Spectra Energy's natural gas pipeline is recovered and used to generate clean energy at both plants. These are, respectively, the seventh and eighth such facilities in North America.

These plants also offset greenhouse gas emissions by about 25,000 tonnes a year, which is equivalent to removing about 9,000 vehicles from our roads. About half of the over $31 million invested in these projects was spent locally. As well, they created 36 new jobs in these communities.

These two plants, together with our proposed bioenergy and run-of-river projects, reflect the shift of demand for energy from fossil fuels to clean electricity, which is impacting the way we live.

This impact is clearly being seen in the transportation sector, where we will see the emergence of electric cars and plug-in hybrids in the market by 2010. While they have the potential to improve air quality, their environmental effectiveness depends on a source of clean electricity. It does no good to take a fossil fuel car off the road and drive it with electricity produced by a coal plant.

What does this mean for British Columbia? Let me back up a little here. We all know that less than 90 percent of B.C.'s electricity needs are being met by domestic generation. This is largely due to two decades of undercapitalizing generation and transmission assets now in need of costly upgrades and to a system highly reliant on annual precipitation.

In a dry year the 90 percent would be much, much worse. The problem is that your imported power is coming from jurisdictions that also depend on hydroelectricity. It's an energy security problem.

Finally, demand for electricity, despite the most aggressive demand-side management program in North America, is outstripping capacity.

Moreover, we need to factor in that under the tentative agreement with the western climate initiative, we will be responsible for greenhouse gas debits associated with a source of generation of imported electricity. As most of our current imports are from coal- or gas-fired sources from the Pacific Northwest and Alberta, this will significantly increase our carbon footprint.

[1810]

Now I want to go back to my initial question. What does this shift in demand towards clean energy mean for British Columbia? To me, it means a more secure energy future — energy supplied from British Columbia, not from imports — and a more sustainable energy future — cleaner air.

The smog issues in the Lower Mainland are something that can be addressed by movements, particularly movements to electricity-based transportation and dramatic GHG reductions — British Columbia and Canada meeting their greenhouse gas reduction targets. The change and the size of the change that is possible here can be as dramatic as that experienced when the existing Peace River and Columbia systems were developed 30, 40 and 50 years ago.

I can tell you that the work that IPPs do, and plan on doing, in B.C. will help meet that demand and are, in fact, necessary to provide a new supply of incremental clean electricity from a variety of technologies and sources.
[ Page 2193 ]

The positive electricity policies put into place by government since 2002 have and will help us to meet this demand and, just as importantly, to tackle climate change. These policies also fill the growing electricity gap between domestic demand for electricity and capacity by helping to meet the targets of energy self-sufficiency set by the provincial government.

The province's leadership in this area is attracting progressive, forward-thinking and innovative firms from around the world that embrace environmental responsibility as fundamental values — values that are at Pristine's core. The province's leadership is a key reason why this government is in a position where it can offer choices to British Columbians on how best to shape the future in order to enable business, communities and individuals to reach their full potential.

However, none of us can overlook the challenges facing government today as it heads into the budget process. As you know, B.C.'s rate of economic growth is expected to slow this year and next, and although British Columbia's fundamentals are sound, it is not immune to the downturn seen elsewhere in the world. It is a given that the choices government deliberates on must be balanced to ensure that any increased program spending or tax cuts or reductions be sustainable now and in the future.

Compounding these challenges is the very important need to provide support for, amongst other things, the forest sector, which is at a crossroads because of circumstances outside their control. I think "crossroads" is probably the greatest underestimation in this entire discussion.

The forest sector, as you know, is…. The number of sawmills shut down and pulp mills shut down, workers out of work and concerned families is something that I certainly have never experienced before. We have the opportunity of being the promoter of the Mackenzie Green Energy project in Mackenzie in northern British Columbia. Right now seven out of eight people in that community are out of work, and frankly, given that all of the mills are shut down, I honestly don't know what the other, the eighth person, is doing.

It's a rough time up there that doesn't seem to meet fundamentally sound economic principles. There's a sound forest resource there that the world needs, but it just isn't coming together. It's something that the bioenergy sector — more than just Pristine or electricity but the bioenergy sector as a whole — can contribute to, to bring the full economic value of those trees and keep people working. But let me come back to that.

I do believe that through the province's bioenergy strategy, the viability of communities hit hard by the slowdown of the forest sector can be sustained. Others have told you during these hearings, and I will repeat as well: there is a huge potential available to convert biomass into electricity and deliver it to the grid.

The cost of the fuel is our challenge. Its ownership and means to access is unclear. It is difficult for us to lock down prices with these risks hanging over our heads, and that is the biggest challenge to bioenergy in the province.

We ask, Mr. Chair, that the committee recommend to the minister that the government expeditiously resolve the issues around price and access to biomass fuel.

[1815]

Furthermore, IPPs face a host of logistical and financial constraints to get projects ready for consideration by B.C. Hydro. The development of power generation involves substantial risks. Getting environmental and government permits and approvals is complicated and time-consuming. Delays can adversely affect IPPs. In some cases, by the time the process is complete and the contract awarded, construction costs have gone up substantially, and these cannot be passed on to the consumer.

We are recommending to the committee that one way to reduce the lumpiness of the procurement process and introduce more certainty is for B.C. Hydro to have a more regular call for power.

We also recommend that a more coordinated and proactive approach to the transmission planning process be developed. This means that B.C.'s renewable generation will flow into the grid and to the consumer, ensuring a dependable, secure source of electricity.

But let us not overlook the huge potential B.C. has in becoming North America's leader in clean energy. In fact, in my estimation, one of the fastest-growing clusters of alternative energy companies and related professional service firms in the world is taking shape here in B.C. The potential for an increasingly dynamic and economically robust clean energy industry in B.C. is limitless. All that is required is the rekindling of the vision that made B.C. a leader in hydroelectric power 50 years ago.

The damming of the Columbia and the Peace helped to build the province and delivered economic and environmental benefits that British Columbians enjoy to this day. Today B.C.'s burgeoning clean energy industry can be the source of new energy and environmental and economic benefits that can see the province through the next 50 years.

We believe the fundamentals to achieve this type of vision have been set out in the 2007 energy plan. However, our experience and that of the other technology clusters the world over indicate that a stronger mandate to drive a commercial paradigm to fulfil B.C.'s renewable energy potential is required.

This would involve an office with ministerial authority and with some degree of IPP involvement that would bring together stakeholders in a more focused way to reduce barriers and expedite the industry's development.
[ Page 2194 ]

Let me close by saying that there are real opportunities for British Columbians that are being realized by the move towards more environmentally responsible clean energy. Pristine is proud to be playing a key role in providing clean, reliable and renewable energy today, and we look forward to continuing to do so into the future.

R. Hawes (Chair): That was just over 14 minutes. We have about 30 seconds if somebody has a question, and that's about it. I think your four recommendations are pretty clear. Thank you, Harvie. That was a good presentation.

Next we have Geoscience B.C. and 'Lyn Anglin.

L. Anglin: Thank you very much, Mr. Chair, for the opportunity to speak this afternoon — or this evening, as I guess it is now. It's getting near the end of a long day for you, I'm sure.

What I wanted to do today, which I've done the last couple of years, is to come and essentially present a report to the committee on how Geoscience B.C. has been spending the province's money that we've been granted over the last couple of years.

What I'd like to do in this presentation — and I won't go through most of the material that's here; that's available to you for background information, if you have any spare time to read it — is give you a summary of the funding we've received to date, some of the major projects we've undertaken, the results that we've seen, and some recommendations to government on things that can be done to help grow the mineral and oil and gas industries in B.C. through geoscience and through other initiatives.

Before I start, I would like to say that the government is to be congratulated on a couple of recent moves. One is going forward with the Highway 37 assessment. That went over really positively in the communities in the north with whom we've been dealing. Also, the creation of the minister's advisory council. Those things are seen very, very positively by the industry and the communities and the first nations in the north who are looking for options for economic diversification.

[1820]

Just to give you the overview, although I'm sure you are aware of this, Geoscience B.C. is a not-for-profit, non-government. We have been granted $25 million originally in 2005 and then an initial $11.7 million this year to carry out geoscience to attract exploration and investment to B.C.

On the next page is a map. Unfortunately, in the colour print that we did here, the outlines didn't show up very well. But we've undertaken three large projects in the last couple of years in the mountain pine beetle–affected area of the Interior: the QUEST project, which is outlined in the fine orange line; the QUEST West project that we started this year, which is the yellow outline; then the Nechako seismic project, which is the smaller red box, all in the interior of B.C. Those projects, as I say, have been our major mountain pine beetle area initiatives.

The QUEST project. We committed $4¼ million and attracted partnership from the Northern Development Initiative Trust and three-quarters of a million dollars to carry out a geoscience survey of the area from essentially just north of Williams Lake up to northwest of Mackenzie and included some work around Mackenzie itself.

The result of that project is that over 850,000 hectares of new mineral staking took place in that project area. The data were actually released in early 2008, and there's been a lot of exploration follow-up. I'll touch on that in a minute.

On the next page is the new project we've undertaken this year. QUEST West is essentially taking the large project we did in the QUEST area and extending it from the Vanderhoof area west to Terrace and Kitimat. Again, this year Geoscience B.C. committed $5.4 million, and that was of the $6 million that was granted to us in this year's budget.

We attracted a matching grant from the Northern Development Initiative Trust of $1.15 million. Well, as a result of that grant and in creating the opportunity for that grant for the northern trust…. It really came from the community support for seeing investments in attracting more exploration activity to their region.

Again, as the previous speaker mentioned, the forestry industry is certainly struggling in the north, and the opportunity to bring diversification is really our primary goal with this project. Already the industry has shown their commitment with over 190,000 hectares of new staking in that area, and we expect we'll see more as we release results.

Then in the Nechako basin, the area west of Quesnel, we undertook a seismic survey this summer to try to evaluate what the oil and gas potential is of that interior basin. There was work done there in the early 1980s. It's the last time any companies did work in the Nechako, and we're collecting new information to try and see if we can improve the understanding of that basin and see if there is in fact potential for oil and gas in that area.

On the next page we mention the partnerships that we've been involved with. In addition to these major projects that we've undertaken, we've also funded since 2005 about $6 million into partnerships which have been levered about 1 to 1. So we've matched that money with another $6 million from partners. Those partners include universities, industry, communities and also working with the ministry and with the federal government geoscience surveys.

Speaking a little bit now about the results that we've had to date. As I said, between the QUEST and QUEST
[ Page 2195 ]
West projects, we've seen over a million hectares of new mineral titles staking. That really indicates the industry's interest in the area.

Our other projects, which I didn't put on that map. We've done projects in various parts of the province. With them included, it's another 300,000 hectares of staking that we're fairly confident has been stimulated by these projects. So we're seeing a real buy-in from industry.

In terms of marketing of B.C. and the advantage that we have in terms of the geology we have and the geoscience we can present, that makes us really a world-class jurisdiction. But B.C. still has some challenges in terms of attracting exploration dollars here. We found that doing these major projects has really generated national and international interest.

In addition, some of the really innovative things that the ministry has done — and I didn't list them on the overhead here, but MapPlace, MINFILE, the on-line staking, these on-line geoscience databases — all really give B.C. a competitive advantage and one that I think we could market even more.

Getting to another aspect of the results, we've been essentially interviewing some of the companies that have taken out mineral title in our first major project area, the QUEST area. We've talked to about 20 companies, and they have already spent in the last two field seasons, last year and this one that's just winding up, about $12.5 million in that area.

I don't think we can claim credit for every dollar that was spent there, but I'm fairly confident we can say that the money we spent on the QUEST project, which is about $5 million and a bit, has probably triggered at least that in industry activity, plus additional work from companies that were already active in the project area.

[1825]

Interestingly enough, what's come out of our interview with those companies is that about 15 percent of their exploration expenditures are spent locally. So about 15 percent of that $12.5 million has gone into consumption of meals, food, buying food, vehicle rentals, hotel accommodation, fuel purchase and chartering of aircraft, etc.

In addition, the companies have all been very active in trying to hire locally. We know of a couple of examples where it has been an advantage for the exploration companies. There are some displaced skilled forestry workers available that they've been able to pick up as heavy equipment operators, etc. in their projects. So there's a very nice, albeit for the wrong reasons, fit between the downturn in the forestry industry and the opportunity to really build up the exploration industry.

As I said, we've had good buy-in from the mineral industry, including Don Lindsay, who's the president of Teck. At a speech last year he did comment that this QUEST project, these large projects, are an example of what B.C. is doing right to really attract industry investment.

We're finding that exploration companies are using the fact that B.C. is investing in these kinds of projects to help raise investment from international sources. As I said, B.C. still has a challenge to market ourselves to the exploration community and to investors worldwide.

The industry definitely feels strongly that there's significant potential for undiscovered resources in B.C., and as I said, the databases and the geoscience that we're generating, I think, are a big part of really marketing that geological advantage and bringing the investment to B.C.

So opportunities for growth of B.C.'s economy. Really, the reality of today's market conditions is a little bit frightening. We'll probably see a downturn in consumer spending. We've seen a bit of a reversal in commodity prices — though those of us involved in the industry don't think that that's going to last very long because I don't think the demand is going to go away. Though, it will be a period of volatility for sure.

Combined with the challenges in the Interior, of the mountain pine beetle and the other challenges faced by the forestry industry, I think really the real opportunities for growth in the economy are going to be in mineral exploration and mining, and oil and gas exploration and development.

So what are some of the things that we've heard from communities, first nations and industry that government might be able to do? From the first nations — and I'm sure this is not news — they're definitely looking for resource-revenue-sharing opportunities, business opportunities, increased capacity, training, etc., but definitely while protecting the land, the water and the air, and their culture.

We've found that some first nations groups are contacting us for advice on how they can attract exploration activity and investment. We think from our experience talking to communities and first nations that there's a real need for an increased understanding of the exploration business in the industry. I think that's something that we may be able to do through Geoscience and through projects like the ones that we've undertaken in the last couple of years.

Similarly, from the communities — and these are the ones primarily in the pine beetle–effected area, where we've been doing major projects — we've heard that they are also very interested in attracting exploration investment. They're looking for viable economic options and opportunities.

Again, the Premier's recent announcement about Highway 37 was received very positively by the communities in the north.

We've also heard quite clearly from the mineral industry associations that there are quite a few issues. I think you'll hear these probably from them directly and from submissions that they make.
[ Page 2196 ]

A couple of things I'm going to highlight are the access to mineral resources. In saying that, they certainly mean also the identification, the knowledge, the infrastructure. They have told us that they think that what Geoscience B.C. is doing, what the ministry is doing in terms of the geoscience work being done within the provincial ministry is very important and very, very valuable.

In terms of the ministry, something that we've heard from industry and communities, with the challenge of the increased activity that has gone on in the last couple of years the Ministry of Energy, Mines and Petroleum Resources is really at capacity to the point where it's probably slowing down the pipeline of projects, and what we get into the permitting and development stage, because the ministry is facing that capacity challenge. I mean, we're all facing a capacity challenge in terms of labour.

One of the things we're wondering about is, if in a period of downturn from the forestry industry, whether there's any possibility of seconding staff from the Ministry of Forests and Range to Energy, Mines and Petroleum Resources to help move forward some of the projects that are in the pipeline.

Just very quickly, some of the comments we've heard from the oil and gas industry — though we're really just starting to engage with them. They like the idea of the Geoscience B.C. model for frontier areas of the province. They value — something that was interesting to me — our projects as being a good gauge of what kinds of concerns communities and first nations have about their industry and what might be coming if there's an opportunity for oil and gas development.

[1830]

They've also shown a real willingness to participate. And what I haven't included in here is the partnership that we're undertaking with the Horn River BasinProducers Group. With the additional money that was granted to us this spring in the budget for oil and gas, we're undertaking a major partnership project in northeast B.C. to really evaluate sources of water in that basin.

To develop the unconventional gas that companies are looking at in the Horn River basin, there's going to be a real challenge in terms of supplies of water. We want to make sure that it can be done cleanly and sustainably, without affecting the surface. We're going to do that in partnership with about eight different companies — hopefully, if we get them all on board. That's the direction we're going, so hopefully, this time next year I'll be reporting on that project when I come and talk to the committee.

To be quite honest, one of the things we have heard from industry is that we're very, very small compared to them right now. Even $5.7 million for a northeast B.C. project…. As you're probably aware, they've spent about $2 billion in land sales in the last couple of years and are probably going to spend a lot more. But we think that we can be very strategic with that money by getting them as a group to work together as partners.

Just to give you the financial picture of where we are now, we have committed, including this new Horn River basin study, about $9.6 million of the $10.7 million we've been granted for oil and gas. We've committed about $16.8 million of the $26 million that we've been granted in terms of minerals projects.

On the minerals side we have room for another major project of QUEST style, and we want to continue to target the mountain pine beetle area. On the oil and gas, we'll just be looking at probably finishing up the projects that we have on the go.

We've managed to keep our overhead very low by, I should say, accessing a lot of volunteer ideas and advice from the industry itself. We have technical advisory committees of volunteers, and we've been able to attract some fairly knowledgable consulting expertise.

Our recommendations, in terms of how we think geoscience can move forward and really contribute to expanding the industry and the opportunities for growth in the economy in B.C., are to do more of these regional-style surveys, not only in the pine beetle area but in other areas of B.C., where we think there is lots of potential for discovery.

The oil and gas question. There are still some frontier areas, frontier horizons in the rock record that haven't been really examined. We think some work in that area can help stimulate more industry activity and interest.

We definitely think that working at the very front edge, which is what geoscience is…. It's the knowledge infrastructure for the industry, so it's really low impact, but it's the first step in exploration activity. If we can engage with first nations and communities and increase their understanding and awareness of the industry and answer some of the questions and concerns that they have, I think we can go a long way to really move more of the industry opportunities forward in B.C.

Finally, I think British Columbia does have a huge advantage in terms of the geology that we have, the geoscience that we're generating in Geoscience B.C. and, as I said, in the ministry — and also in universities and industry themselves — to be really competitive and to maintain the economic growth through these industries.

Thank you very much for the opportunity to speak.

R. Hawes (Chair): Thank you, 'Lyn. We're down to about 30 seconds.

B. Ralston (Deputy Chair): Quick question on Highway 37. The Highway 37 project was put on hold when Galore Creek went down. The government says they're going forward again without a private sector partner.

What's your sense of the prospects for recouping that public investment down the road?
[ Page 2197 ]

L. Anglin: Well, without being able to speak for any of the mining companies directly, I would say my feeling, in terms of knowing what the mineral potential up there is, is that it will be a good long-term investment.

Galore Creek is a big, big project, and the rocks are still there. The potential is still there, but they ran into some challenges. But there are a lot of other projects up there, a lot of exploration going on. There are some known resources in that area. I think that this investment in electrification of that corridor is going to open up a lot of other opportunities, not just Galore Creek.

R. Hawes (Chair): Thank you very much, 'Lyn. Your work is very valuable.

L. Anglin: Thank you. Sorry I didn't leave more time for questions, but thank you very much for your time.

R. Hawes (Chair): We have the Emily Carr Students Union next — Miles Thorogood and Rachel Simpson.

You're on.

[1835]

R. Simpson: My name is Rachel Simpson, as you already know. I'm a member of the Emily Carr Students Union, local 33 of the Canadian Federation of Students. I'm studying in my second year of design at Emily Carr University.

M. Thorogood: I am Miles Thorogood. I'm an elected student on the university senate and representative of the Emily Carr Students Union, which represents 1,600 students at Emily Carr University. I am studying in my first year of the master's program in applied arts.

Our organization works with over 18 students unions in British Columbia and over half a million students across the country to campaign for accessible, high-quality post-secondary education.

Our presentation tonight will focus on our students union's recommendations to increase access to post-secondary education. I'll also be addressing the issue of the need for increased transit funding earmarked towards creating a standardized U-pass program for all post-secondary institutions in Metro Vancouver.

We're concerned that the B.C. government has been building short-term wealth for some British Columbians at the expense of investing in the long-term, shared prosperity of the province as a whole. Students and the post-secondary community alike were frustrated with the government's last-minute cutback to badly needed and promised operating funding in the range of $55 million. We are witnessing the effects of these funding cuts with the existence of 20 less sections of our required classes this year as well as a lack of studio space.

We're here tonight to recommend that the government's priorities for the 2009 and 2010 budgets should include a reinvestment in post-secondary education through increased government funding, reduced tuition fees and new upfront grants to assist students in pursuing an education. A basic post-secondary credential — whether a degree, diploma or certificate — is almost essential in today's economy.

The students who study at Emily Carr as well as students across British Columbia will play an important role in benefiting our society in the future, and this role needs to be recognized.

R. Simpson: Statistics Canada has cited cost as the number one deterrent to pursuing post-secondary education in Canada. The province of British Columbia will benefit when the barriers to attending university are reduced.

The students who are obtaining a degree at Emily Carr have been accepted because they have proven excellence in their fields. The financial barrier and fear of debt is turning away potential students who would be contributing significantly to our economy in a province that relies heavily on creativity. Our province is in need of educated graduate students. However, the tuition fees for the master's program are above $10,000 per year.

In the 2007 federal budget an additional $800 million was allocated to the provinces, specifically for post-secondary education funding. Of that $800 million, an estimated $110 million was transferred to B.C. for use in the 2008-2009 fiscal year. With tuition fee revenue collected by the provincial government now just under $1 billion annually, the $110 million in extra federal funding announced in the 2007 federal budget can and should be used towards providing relief to students through a 10 percent reduction in tuition fees.

It is not only tuition fees that need to be addressed to make post-secondary education more accessible. This year students celebrated the creation of an upfront federal system of needs-based grants. However, with tuition fees as high as they are, it is necessary for the province of B.C. to complement the federal program with an upfront, non-repayable grants program in order to ensure that those students who are most in need are able to attain an education.

The provincial government should follow suit and develop a system of upfront, non-repayable grants for those students who are most in need of financial support. A needs-based grant program would ensure that the students who we represent graduate with much less debt and are therefore able to participate more fully in the economy upon graduation. With average debt levels in B.C. as high as $27,000, we must address student financial assistance and fairness for students from modest backgrounds.

Members should be aware that following graduation, student loan borrowers pay interest on their public student loans substantially above the government's cost
[ Page 2198 ]
of borrowing and that nearly every province charges a lower rate on student loans than in B.C.

Students with higher debt levels upon graduation pay more for their education than those who had to borrow less or nothing at all, due to higher interest rates. Fundamentally, the reduction of interest rates is an issue of fairness. Low- and middle-income students should not be expected to pay more for their education than those who can afford to pay up front. By keeping interest rates as high as they are, the government is penalizing those students, and their families, with the least amount of financial resources.

[1840]

In terms of the impact on the provincial treasury, the annual cost of eliminating interest on student loans would be negligible. Our recommendation is that the government immediately reduce interest rates to the government's rate of borrowing and then eliminate them to ensure that those who can least afford an education no longer have to pay the most.

Each September students who can afford B.C.'s record-high tuition rates return to school only to pay more and get less. We are therefore recommending a reinvestment of operating funding to our universities and colleges.

Following the spring cut to expected operational funding, the public was deluged with stories of the hardships of B.C.'s post-secondary institutions. However, the reality is that colleges were already affected by chronic underfunding. After last spring's cut to operational funding, Emily Carr was budgeting a $500,000 deficit. While the government has publicly touted funding increases as high as 40 percent in post-secondary education, the reality is actually a decline in funding when measured on a per-student basis.

Since 2001, accounting for inflation, per-student operating funding to colleges and universities has declined from $8,786 to $7,736. This means that with tuition fees doubling since 2002, every year we return to school to pay more for less.

Included in this recommendation is also ensuring that post-secondary institutions have the necessary funding to meet the government's goal of becoming carbon-neutral by 2010.

Students have been leaders on campus and in our communities in support of environmentally sustainable practices. We are pleased to see that the government has also made environmental sustainability a core goal, as the government has the greatest role to play in ensuring environmental standards and regulations for all of B.C.

However, we are concerned that without adequate funding, universities and colleges will invariably download the additional costs of retrofitting and other green measures onto those who can least afford them — the students.

We are seeking funding to green campus buildings and operations as well as a sustainability framework from government for all public buildings and operations, in addition to the regulation of emissions in the private sector. Furthermore, we would like to express concern about any impact that the carbon tax may have on resources of universities and colleges.

We do not believe that the loss of desperately needed resources in the post-secondary system is an appropriate means of achieving sustainability objectives. Universities and colleges should be funded for sustainability upgrades and offset any additional emissions through the research and teaching that are developing more sustainable industries in communities.

Our final recommendation is regarding the universal transit pass, or the U-pass, for post-secondary students. We would like to first congratulate the B.C. government on its ambitious climate action plan that claims to double transit ridership by increasing travel choice for people. We share the government's hope that students will become lifetime transit riders and thus play an active part in helping to reduce greenhouse gas production now and in the future.

Our members participate in the Canadian Federation of Students' We Ride student action for public transit campaign, which has now collected the signatures of over 15,000 students calling for action for high-quality, affordable public transit. This clearly demonstrates student support for the government's transit goals.

Unfortunately, TransLink is pushing thousands of students out of the transit system due to its discriminatory policy that the U-pass program be revenue-neutral. This means that schools with the most students dependent on transit will pay the most for the same services, even when adequate infrastructure is already in place.

We believe that TransLink undermines not only its role as an essential public service but also the provincial government's goals set out in the provincial transit plan. We are asking that the B.C. government intervene to impel TransLink to implement a standard U-pass for all students in Metro Vancouver that will not raise the price for students already on the program and, moreover, substantiate its own stated commitment to this cause by assisting in the funding of the U-pass program.

M. Thorogood: To summarize, our recommendations for the 2009 B.C. budget include the following six initiatives.

Firstly, the reduction of tuition fees commensurate with the approximate $110 million received from the federal government for post-secondary education this fiscal year.

Secondly, the development of a provincial upfront grants program complementary to the new program announced by the federal government.

Also, the reduction of interest rates on B.C. student loans to the government's rate of borrowing.
[ Page 2199 ]

Also, the restoration of per-student funding, accounting for inflation, to 2001 levels and the indexation of base annual operating funding to inflation.

Ensuring that universities and colleges have the requisite public funding to meet the government's goal of carbon neutrality by 2010 and do not suffer further funding shortfalls as a result of carbon tax.

Lastly, immediate resolution to TransLink's discriminatory policy that the U-pass be revenue-neutral by providing dedicated funding for the expansion of the universal pass to all public post-secondary institutions in Metro Vancouver.

[1845]

We are urging this government to recognize that the most important investment it can make for the province's future is in post-secondary education.

Thank you for your time, and we'll be happy to answer any questions.

B. Ralston (Deputy Chair): Just a quick question about your campaign for the universal pass. You say that TransLink calculates the price that they're proposing for each institution on the basis of what you call revenue neutrality. I take it that they have some idea of how many people use the system already and how many people would take a pass.

Have they revealed to you how they calculate that amount or how they calculate the current ridership at any given institution? Have they shown you that?

R. Simpson: I'm not sure exactly how they calculate the number of students that currently ride transit per institution, but they do calculate the revenue neutrality based on the number of students at a university who ride. Then they essentially transfer those costs and divide it amongst the students. That would be how they, to be clear, divide those costs amongst the students, and students would then pay collectively.

R. Hawes (Chair): Sort of like a bulk purchase. You have more; you pay less per….

R. Simpson: Yes, but hypothetically, that would be giving U-passes to students who aren't already riding transit. Whether or not that's effective remains to be seen.

B. Ralston (Deputy Chair): So if you have an institution where already there's a high transit usership, to get the pass, you're going to be asked to pay a higher fee. Is that right?

R. Simpson: Yes, that's correct.

B. Ralston (Deputy Chair): So people that are successful in using transit are being asked to pay more.

R. Simpson: Yes, penalized.

B. Ralston (Deputy Chair): I see. Okay.

R. Hawes (Chair): I just have one question, because I've heard one statement made pretty much repeatedly, and I'm trying to wrap my head around the logic. That's when you say that those who have to pay an interest rate…. It's fundamentally unfair, you're saying, that those who have to finance their education through student loans are paying more for their education than those who could pay cash up front. Somehow you make the case that that's fundamentally unfair.

I'm trying to wrap my head around that. If I can pay cash for my home, and you have to put a mortgage on your home, you have to pay more for your housing than I do. Is that fundamentally unfair? Or is that just the way things are?

R. Simpson: The assumption would be, then, for students — or anyone, really, who's attempting to get a job in the economy today — that you really do need a post-secondary education of some kind, whether that be a certificate or a degree.

Fairness? Well, essentially what we're saying is that it's very important for our economy to be filled with people who have wonderful skills, who are….

R. Hawes (Chair): Nobody argues that. I'm just trying to figure out the part of your argument, because I've heard it so many times — that somehow you're paying more for your education because you had to have student loans; that fundamentally, it's unfair that you had to pay more, because you had to have a student loan, than someone who could finance it from their resources.

I don't see the unfairness when, like I say, in housing and in every other thing — whether you're buying a vehicle, buying your car insurance — if you have to finance it, you pay more. That's the way life is.

I do get the rationale behind lower interest rates. I get that. I just don't get the argument…. It doesn't wash with me — I'm sorry — the other part of the argument.

M. Thorogood: I understand what you're saying there, but when you think….

D. Thorne: Okay, I'm going to just take a stab at what I'm hearing, and maybe you can say…. What I understand you to be saying, or maybe it's a different point, is that in many provinces student loan interest is revenue-neutral — we all love that word "revenue-neutral" in government — so that nobody is making any money off of student loans. Now, that's what I hear you saying and that in B.C. the interest rate is higher.
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So if somebody — I'm not entirely sure if it's a bank or the government; I think it's a bank — is making money off of student loans, just like a car loan, it's business. They're making money. But in other provinces it's revenue-neutral. You pay what the money actually costs. Is that correct?

R. Simpson: I'm not certain. I think it might be the government that gives the student loans or an organization under….

D. Thorne: Well, it doesn't matter who gives it. Is the point about the interest rate correct?

R. Simpson: That students who are…?

D. Thorne: That in some provinces the interest rate is lower than it is in British Columbia.

R. Simpson: Yes. British Columbia has the highest.

D. Thorne: So nobody is making any money. It's revenue-neutral.

R. Hawes (Chair): That's not the point that I was raising. The only point I was raising is….

D. Thorne: It's a different point.

R. Hawes (Chair): When you say that somebody has to pay more…. I don't care what interest rate it is. Clearly, they have to pay more, if you want to put it that way, for their education if you add in the interest.

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You seem to be making the case that there's something wrong with that. Frankly, I don't see anything wrong with that. If you need to finance your education or your car or your home, you are going to pay more, in some ways, than someone who paid cash. They have opportunity costs on their money that's lost, but that's neither here nor there.

I get your argument. I just don't care for that part of your argument, because it just doesn't hold any logic to me. The rest does. I get the part about interest rates being higher.

R. Simpson: That seems reasonable to me. But at the same time, the major difference to me would be the difference between owning a home and, say, having an education, based not only on the individual but on the collective economy as well.

Firstly, starting with the individual, in order to finance an education, you have to come from a background of education again.

R. Hawes (Chair): I get your point. Anyway, I think we're almost at the end.

R. Simpson: It's an interesting comment, for sure.

R. Hawes (Chair): I probably shouldn't even have raised that.

R. Simpson: Oh no. I totally understand exactly where you're coming from.

R. Hawes (Chair): Now it'll get out of control, and we are at the end of our time. I'm going to exercise the Chair's authority to say thank you very much. Your presentation was well received.

D. Thorne: We didn't mean to pick on you. You're just the last ones, and we've been at this since nine o'clock this morning. Great presentation.

R. Hawes (Chair): So we're going to move to the open-mike portion. There is no open mike?

Interjection.

R. Hawes (Chair): With that, we do come to the end of the oral part of our meetings. We will now begin some deliberations very shortly. There is still until the 24th to receive written submissions. Those will of course be gone over very carefully and will be a part of our deliberations.

With that, the meeting is going to be adjourned. Thank you, all, very much. Thanks to the Hansard staff and thanks to the staff from the Clerk's office. I'd like to also thank all the members of the committee. It's been remarkably friendly, and we've been pretty well-behaved. So thank you very much.

The committee adjourned at 6:52 p.m.

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