4th Session, 38th Parliament
November 15, 2008
Budget 2009 Consultation Process
British Columbians’ Views on Tax Policy
British Columbians’ Spending Priorities
British Columbians' Ideas for Reallocation of Savings
British Columbians’ Proposals on Other Measures
November 15, 2008
To the Honourable
Legislative Assembly of the
Province of British Columbia
Honourable Members:
I have the honour to present herewith the Second Report of the Select Standing Committee on Finance and Government Services for the fourth Session of the 38th Parliament.
This Report covers the work of the Committee on the Budget 2009 Consultations.
Respectfully submitted on behalf of the Committee,
Randy Hawes, MLA
Chair
Randy Hawes, MLA |
Chair |
Maple Ridge-Mission |
Bruce Ralston, MLA |
Deputy Chair |
Surrey-Whalley |
Robin Austin, MLA |
|
Skeena |
Hon. Bill Bennett, MLA |
|
East Kootenay |
Hon. Iain Black, MLA |
|
Port Moody-Westwood |
Harry Bloy, MLA |
|
Burquitlam |
Dave S. Hayer, MLA |
|
Surrey-Tynehead |
John Horgan, MLA |
|
Malahat-Juan de Fuca |
Richard T. Lee, MLA |
|
Burnaby North |
John Rustad, MLA |
|
Prince George-Omineca |
Diane Thorne, MLA |
|
Coquitlam-Maillardville |
John Yap, MLA |
|
Richmond-Steveston |
CLERK TO THE COMMITTEE
Kate Ryan-Llyod, Clerk Assistant and Committee Clerk
COMMITTEE RESEARCHERS
Josie Schofield, Committee Research Analyst
Erin Bett, Committee Researcher
Kathryn Butler, Committee Researcher
Julie McClung, Committee Researcher
Pavlína Vágnerová, Committee Researcher
On March 4, 2008, the Legislative Assembly agreed that the Select Standing Committee on Finance and Government Services be empowered:
To examine, inquire into and make recommendations with respect to the pre-budget consultation report prepared by the Minister of Finance in accordance with section 2 of the Budget Transparency and Accountability Act and, in particular, to:
In addition to the powers previously conferred upon the Select Standing Committee on Finance and Government Services, the Committee shall be empowered:
and shall report to the House as soon as possible, or following any adjournment, or at the next following Session, as the case may be; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.
The Committee wishes to acknowledge the many British Columbians who participated in the 2009 Budget consultation process. We appreciated the time and effort of these individuals and organizations, and we sincerely thank them for their valuable input into this important process.
The Committee also wishes to acknowledge the helpful contribution of Legislative Assembly staff who helped us in all stages of the consultation process. Staff in Computer Systems managed our website; and Hansard Services recorded the thousands of words spoken at the public hearings and produced transcripts of each meeting. In particular, we would like to acknowledge the help of the Hansard staff who travelled with the Committee during September and October: Michael Baer, Polly Vaughan and Tamara Checknita.
The Office of the Clerk of Committees provided indispensable support to the Committee throughout its process. In particular, we acknowledge the contribution of Josie Schofield, Committee Research Analyst, who provided exemplary research and writing support throughout the process. She was ably assisted by Erin Bett, Kathryn Butler, Julie McClung and Pavlína Vágnerová. Mary Newell and Stephanie Hansen assisted with travel arrangements, witness registration, and many other key administrative tasks. And finally we would like to thank Kate Ryan-Lloyd, Clerk Assistant and Committee Clerk, who provided excellent overall administrative and procedural advice throughout all stages of our work.
This report summarizes the budget consultations conducted by the Select Standing Committee on Finance and Government Services (Finance Committee) during the fall of 2008. In order to learn more about the public’s fiscal and spending priorities for the next provincial budget, the Finance Committee invited the public to make submissions, based on the questions provided in the Ministry of Finance’s Budget 2009 Consultation Paper.
By October 24, the deadline for receiving public input, the Finance Committee had heard 189 presentations at 17 public hearings. We also received 308 written submissions, 1,416 on-line survey responses, and 1,002 household flyers. In total, the Committee heard from over 2,900 British Columbians, including submissions from 263 organizations. This year, the consultation process coincided with a federal election, two provincial by-elections, and municipal elections across B.C.
The budget consultations also took place within the context of the global economic crisis, precipitated by the U.S. credit crunch. In light of the uncertain economic environment, the Finance Committee’s recommendations are qualified by the proviso that government should proceed with prudence when considering the new and expanded spending proposed in this report, and make decisions in the context of available fiscal room in the province’s budget.
Bearing this in mind, we are proposing 14 tax policy changes to encourage economic growth, including: raising the small business corporate income tax threshold to $500,000; and utilizing tax credits to assist the digital media sector, the mining industry and the non-profit sector. In addition, we recommend rationalizing PST exemptions for agriculture, forestry and the trucking industry, and redirecting PST revenue collected on fees for legal services to fund legal aid for eligible B.C. families. However, while we received extensive input on the carbon tax, the Finance Committee could not agree on any specific recommendations.
For new program spending, the Finance Committee recommends government take action to protect marine ecosystems and parks, as well as fish and wildlife habitat. To encourage economic development, we suggest government consider investing more in agriculture and bioenergy products, partnering in innovative aquaculture pilot projects, and leveraging funds for leading-edge initiatives in scientific research. To promote community development, we submit proposals for regional initiatives, broadband access, a review of ferry fares, and arts and culture funding.
The report’s ten health-care recommendations include investigating cost savings relating to the purchase of generic drugs; pursuing partnerships to open up new mental health beds; standardizing licensing standards for recovery houses; and enhancing seniors’ home support services. For post-secondary education, the report recommends ways to promote greater access, including increasing the number of graduate scholarships and reducing the interest rates charged on student loans.
To address the need for more affordable rental housing, we recommend facilitating the development of affordable market-rental housing and enabling families on income assistance to qualify for the rental assistance program. The report also contains recommendations to enhance services for children with special needs, adults with developmental disabilities, and income assistance recipients.
Regarding capital spending, our report urges government: to continue to invest in strategic transportation infrastructure in all regions of B.C.; to expand public transit infrastructure; to work with other governments to develop railway infrastructure and commuter rail service on Vancouver Island; and to continue its investment in the construction of health and education facilities.
This fall, the annual budget consultations conducted by the Select Standing Committee on Finance and Government Services (the Finance Committee) took place in unusual circumstances. First of all, election fever was in the air here in B.C., as well as south of the border. The federal election campaign started on September 7 and ended on October 14. Next, on October 29, provincial by-elections were held for the Vancouver-Burrard and Vancouver-Fairview electoral districts to fill two vacant seats in the Legislative Assembly. Finally, municipal elections took place on November 15.
The other major event coinciding with this year’s budget consultations was the global financial crisis. Stock markets collapsed following the sub-prime mortgage situation in the United States. Despite attempts to protect liquidity in the financial sector, there are signs of a global economic downturn resulting from a credit crunch. In British Columbia, the international financial crisis has prompted the B.C. government to undertake a number of initiatives to alleviate the impacts, which are noted in the course of reporting on this year’s budget consultations.
“What we are doing as a province and as a Ministry of Finance is to ensure that we take a cautious and prudent approach as we go forward. We're certainly not going to be spending revenues that we are not certain will be there for us.” (Hon. Colin Hansen, Minister of Finance, Vancouver meeting)
In preparing the estimates for the next budget, the Minister of Finance is required to release a fiscal forecast and a budget consultation paper by September 15 of each year. The paper provides a description of the major economic and policy assumptions underlying the fiscal forecast, and identifies key issues that need to be addressed by the public.
This year, the public consultations formally began with the Minister of Finance’s presentation of the Budget 2009 Consultation Paper to the Finance Committee at its meeting in Vancouver on September 15. In his opening remarks, Hon. Colin Hansen summarized the findings of his ministry’s First Quarterly Report, which was released on September 12, 2008:
“[T]he bottom line is we started looking at some of the budget revenue numbers for the province and we are still running ahead of what we had anticipated at the time of this year’s budget. We’re still looking at a surplus that’s going to be greater than the $50 million that had been budgeted for. Also in this fiscal year, we have built in a $750-million forecast allowance. I think that the prudence of a conservative and cautious approach to building budgets in British Columbia is actually going to serve us well as we go into some of these difficult times that lay ahead of us.” (Hon. Colin Hansen, Minister of Finance, October 22)
Since September 15, the global financial crisis has prompted the provincial government to revise its fiscal forecast. On October 22, in a media briefing before the Premier’s televised state-of-the province address, the Minister of Finance provided an economic overview that focused on the impacts that the downturns in the U.S. economy and global markets are having on the province’s fiscal forecast.
Subsequently, the Minister of Finance forwarded to the Finance Committee a copy of the “Economic Update” PowerPoint presentation he had used in the October 22 media briefing. This information was provided in response to committee members’ earlier invitation to provide a fiscal update to assist their deliberations.
The first slides in the “Economic Update” illustrated how the U.S. economy was continuing to shed jobs, and the pace of housing starts was still falling. Turning to B.C., the slides noted that: consumer confidence was declining; unemployment was starting to rise; wood-manufacturing shipments and lumber prices were in decline; retail sales growth was slowing; home sales were declining in the B.C. housing market; natural gas prices were falling; and the value of the Canadian dollar was also falling.
The rapidly changing economic situation formed the backdrop for the Finance Committee’s consultation process and its subsequent deliberations. In light of this uncertain economic environment, the Finance Committee believes that government should proceed with prudence when considering the new and expanded spending proposals proposed in this report, and make decisions in the context of available fiscal room in the province’s budget.
During the last two months, committee members have concentrated on fulfilling our statutory mandate — namely, to report by November 15 on the public consultations we conducted across the province on proposals and recommendations regarding the provincial budget for next year.
The Finance Committee strives to promote an inclusive consultation process, by using a variety of methods to reach the broadest possible cross-section of the province’s population. This fall, the public was invited to participate by: making oral presentations at public hearings; sending written submissions to the Finance Committee; submitting on-line responses to the questions in the Budget 2009 Consultation Paper; or returning the household flyers.
The Finance Committee’s website contained information on how to “Have Your Say on British Columbia’s Budget Priorities” throughout the consultation process, which spanned the period from September 15 to October 24. The deadline for the receipt of all submissions was extended by one week, due to the federal election campaign.
The public had the opportunity to make oral presentations at one of the 17 public hearings held in different regions of the province between September 15 and October 16. Each public hearing location was advertised in regional and community newspapers. The dates and locations are listed in the schedule of meetings on pages 3 and 4.
The Finance Committee heard 189 oral presentations mainly from local governments and organizations representing key sectors of the provincial economy, the K-to-12 and post-secondary sectors, and community-based social services. All the witnesses who participated in the 17 public hearings are listed in Appendix A.
British Columbians could also submit their ideas in writing to the Finance Committee. A general call for submissions was placed in regional and community newspapers. In response, 230 individuals and 78 organizations used this consultation method to express their views on budget priorities. They are listed in Appendix B.
Members of the public also had the option of completing an on-line survey form that contained the questions in the Budget 2009 Consultation Paper. Input was received from 1,416 respondents, including 23 organizations, who are listed in Appendix C.
Another way British Columbians could participate in the budget consultations was to mail their answers to the questions in the flyer distributed to households across the province. The Finance Committee received 1,002 flyers, and another 105 that contained incomplete contact information. The names of people submitting household flyers are listed in Appendix D.
In line with past practice, all the submissions received by the Finance Committee were reviewed and considered in its deliberations. We would like to thank again everyone who participated in the Budget 2009 consultation process for their valuable input.
March 5, 2008 |
Organization meeting |
Victoria |
May 14, 2008 |
Planning meeting |
Victoria |
September 15, 2008 |
Minister’s Briefing |
Vancouver |
September 15, 2008 |
Public Hearing |
Vancouver |
September 16, 2008 |
Public Hearing |
Kitimat |
September 16, 2008 |
Public Hearing |
Smithers |
September 17, 2008 |
Public Hearing |
Fort St. John |
September 17, 2008 |
Public Hearing |
Prince George |
September 18, 2008 |
Public Hearing |
Williams Lake |
September 18, 2008 |
Public Hearing |
Kamloops |
September 23, 2008 |
Public Hearing |
Penticton |
September 29, 2008 |
Public Hearing |
Vancouver |
September 30, 2008 |
Public Hearing |
Cranbrook |
September 30, 2008 |
Public Hearing |
Nelson |
October 1, 2008 |
Public Hearing |
Courtenay |
October 2, 2008 |
Public Hearing |
Langford |
October 15, 2008 |
Public Hearing |
Abbotsford |
October 15, 2008 |
Public Hearing |
Surrey |
October 16, 2008 |
Public Hearing |
Burnaby |
October 16, 2008 |
Public Hearing |
Coquitlam |
October 29, 2008 |
Deliberations |
Vancouver |
November 5, 2008 |
Deliberations |
Victoria |
November 10, 2008 |
Deliberations |
Victoria |
November 13, 2008 |
Adoption of Report |
Victoria |
The next sections of the report summarize what the Finance Committee heard and read during the course of the budget consultations. They are organized according to the questions in the Budget 2009 Consultation Paper, beginning with British Columbians’ views on tax policy, then their spending priorities and suggestions on other measures.
Q.1: By law government must table a plan each year showing how the money generated by the tax on carbon emissions will be returned to British Columbians. Which taxes do you want to see reduced next?
Before we summarize British Columbians’ views on the question of tax cuts, we would like to address the issues raised by British Columbians relating to the carbon tax.
In British Columbia, the tax on carbon emissions applies to virtually all fossil fuels, such as gasoline, diesel, natural gas, heating fuel, propane and coal, and the initial carbon tax rates came into effect on July 1, 2008. Under the Carbon Tax Act, 2008, all revenue generated by the carbon tax will be offset by tax reductions in other areas.
Over the course of the budget consultations, the Finance Committee received extensive public input on the new carbon tax, ranging from submissions voicing unequivocal support for the tax to others expressing strong opposition to “the gas tax.” While there are diverse perspectives throughout British Columbia on the desirability of the tax, it is clear from many submissions that there is a strong desire for government to continue to work to reduce greenhouse gas emissions.
Well-known environmental organizations voiced unequivocal support for retaining and enhancing the carbon tax. In their submissions, they pointed out that carbon pricing is the key to encouraging households and industry to adopt greener technologies and practices. To enhance the effectiveness of the B.C. carbon tax, they proposed that government needed to provide greater clarity and assurance of the “revenue-neutral” concept, and further incentives and programs for families to make environmentally-responsible choices. Other proponents included prominent academics in the province’s universities, specializing in earth and ocean sciences or economics. Here are some examples of the support voiced for retaining the carbon tax:
“We’re urging the current government to stay the course with the carbon tax. It’s really important that we have a price signal on carbon.” (Guy Dauncey, B.C. Sustainable Energy Association, Langford hearing)
“Pricing emissions through a carbon tax (and cap-and-trade system) is one of the most powerful incentives and tools that governments have to encourage companies and households to pollute less by investing in cleaner technologies and adopting greener practices.” (Ian Bruce, David Suzuki Foundation, Vancouver, WS292)
“Economists around the world agree that there is only one way to deal with global warming and that is to put a price on emissions. This can be done through a carbon tax, a cap- and-trade system, or both. The carbon tax provides price certainty, is easier to implement, more transparent, easy to make revenue-neutral and less open to abuse than the cap-and-trade system.” (Dr. Andrew Weaver, University of Victoria, WS104)
“I strongly support the continuation of the B.C. carbon tax policy, which is a vital and economically sound policy to address climate change.” (Dr. Nancy Olewiler, Simon Fraser University, WS291)
More qualified support for the carbon tax was voiced by the business community. The Vancouver Board of Trade, for example, urged the Finance Committee to recommend government adopt a more cautious approach, by freezing future planned increases and undertaking economic impact assessments. Other sectors of the provincial economy also asked for some form of financial relief because their costs of conducting business have risen with the carbon tax as it is currently designed. Here is a sample of the views expressed by B.C.’s private sector:
“It is important to continuously monitor this tax-neutral plan to ensure it accomplishes its climate improvement objectives without creating unintended adverse consequences. Inequalities are inevitable, especially in business. The government must be prepared to move swiftly to deal with these inequalities. Government may have to find other means to provide businesses with a benefit to offset the carbon tax. The government must also measure the impact of these measures, making sure that the carbon emission reductions are achieved.” (Bernard Magnan, Vancouver Board of Trade, Sept.15 Vancouver hearing)
“The Chamber recommends that the provincial government should: encourage solutions beyond tax cuts, including targeted incentives and changes to policy that would mitigate any financial impact of the tax; enhance industry’s ability to reduce emissions on a permanent basis as a mechanism to defray the tax burden; introduce a carbon-smart program that will provide audits to small business on how they can save money by reducing their greenhouse gas emissions….” (John Winter, British Columbia Chamber of Commerce, Penticton hearing)
“The direct cost of the carbon tax to the agricultural sector in year 1 is $10 million…. The BC Agriculture Council recommends first of all that the proposed incremental increases to the carbon tax be withheld until a full economic impact is undertaken and until a fully functioning, efficient carbon offsets market is implemented and operational, and secondly, that the provincial government change its approach to revenue neutrality and provide mechanisms to make the carbon tax collected available to sectors and businesses that are impacted by the imposition of the tax.” (Garnet Etsell, BC Agriculture Council, Abbotsford hearing)
“The B.C. cement industry will pay $14 to $25 million per year in carbon tax and can’t just pass on the costs…. Forego the planned (July 1, 2009) increase in the carbon tax and implement a rebate/exemption on the share of carbon tax associated with cement exports.” (Michael McSweeney, Cement Association of Canada, Coquitlam hearing)
“Revenue neutrality may apply province-wide but no amount of tax reductions will compensate for the negative impact the tax will have on the carbon-intense trucking industry (est. contribution = $460 million by 2012).” (Paul Landry, B.C. Trucking Association, Sept. 29 Vancouver hearing)
Organizations in the public sector also voiced concerns to the Finance Committee regarding the added costs of the carbon tax, and requested various forms of financial relief. They included municipalities and school districts that, in fact, have been promised offsets under the new Climate Action Incentive Program, announced by the Premier at the Union of B.C. Municipalities annual convention on September 26, 2008.
Pleas for assistance were also made by students who were concerned about having to bear the costs of retrofitting post-secondary institutions, and individual citizens with similar concerns about the cost implications for health authorities. Here are some of the comments we received about the tax’s impact on the public sector:
“The City of Prince George believes that the carbon tax is not revenue-neutral for municipalities and therefore acts as a barrier to funding greenhouse gas reduction initiatives.” (Councillor Don Zurowski, City of Prince George, Prince George hearing)
“We recommend the government review the carbon tax’s impact on school districts and provide the necessary funding to achieve the required refitting of schools.” (Doug Boyd, School District No. 60, Fort St. John hearing)
“We’d like to express concern with any impact that the carbon tax may have on the resources of universities and colleges. We do not believe that the loss of badly needed resources in the post-secondary education system is an appropriate means of achieving sustainability objectives. Universities and colleges should be funded for sustainability upgrades….” (Shamus Reid, Canadian Federation of Students, Sept. 29 Vancouver hearing)
"If the health authorities have to send money back to the government by way of a carbon tax, that just means less money in health.” (Jean Leahy, Save Our Northern Seniors, Fort St. John hearing)
A significant number of individuals who participated in the budget consultations were strongly opposed to the carbon tax. Concerns about the added costs to themselves and their families were expressed, particularly by residents of rural communities. Many small business owners also opposed the carbon tax, arguing that the tax imposed additional costs at a time of economic uncertainty. Here is a sample of their views:
“Living in rural B.C. doesn’t give me any choice but using my vehicle to get groceries, see the doctor and dentist and so on because there is no public transportation available. Where in rural B.C. is the incentive to make cleaner energy choices, except to walk 20 km to the nearest grocery store or buy a horse?” (Ulrich Patalong, Clearwater, WS025)
“The carbon tax treats different parts of the population differently. Rural and northern residents have a different lifestyle than lower mainland residents. We have higher heating and fuel costs and do not have access to alternative transportation modes.” (William Herringshaw, Quesnel, Survey855)
“The carbon tax has created a burden on low-income earners.” (Mr. & Mrs. Frank Quiring, Abbotsford, Flyer432 )
“The recent introduction of the carbon tax on all fuels is destructive and detrimental, not only to my business but to every business north of the Port Mann Bridge. At best, I want the Committee to recommend the removal of the carbon tax altogether or, at worst, maintain the tax at its current level….” (Dave Holmberg, Bobcat Country Inc., Abbotsford hearing)
“In our BC pre-budget survey, 63 percent of our members thought the government should abandon plans to increase the carbon tax in 2009 and 2010 and 23 percent favoured retaining it.” (Brian Bonney, Canadian Federation of Independent Business, Sept. 29 Vancouver hearing)
Committee Decision
During our budget consultations and deliberations, the all-party Finance Committee has strived to work in a collaborative manner and seek common ground. However, we have divided on party lines over the controversial issue of the carbon tax — a difference of opinion which, of course, reflects the polarization among British Columbians. In view of our disagreement on the merits of the tax, we have decided to make no recommendation on the topic. Instead, we have recorded what we heard from individuals and organizations across the province, and we hope that the government will take this public input under serious consideration as it moves forward.
The Finance Committee received many suggestions on tax cuts from all four streams of public input, which covered mainly income taxes, provincial sales tax, and the property transfer tax.
Throughout the budget consultations, there were repeated calls for cuts to personal, small business and corporate income taxes in order to stimulate the economy. Here is a sample of what we heard:
“Tax cuts, including personal, small business and corporate taxes, should be a priority and not dependent on tax increases elsewhere. Real tax cuts ensure our economic competitiveness, not tax shifts.” (Brian Bonney, Canadian Federation of Independent Business, Sept. 29 Vancouver hearing)
“The CTF recommends the establishment of a public tax review committee to examine corporate and personal income taxes.” (Maureen Bader, Canadian Taxpayers Federation, Coquitlam hearing)
“I recommend that the surplus be used to reduce income tax in the lower tax bracket, or to increase the basic personal (exemption) amount. This would be of greatest advantage to low-income earners, and be stimulative to the economy….” (Gerry Kirk, Surrey, WS029)
“For the provincial personal income tax rate, cut the upper bracket rates and raise the income levels at which they apply.” (Dr. Jonathan Kesselman, Simon Fraser University, Sept. 29 Vancouver hearing)
Committee Decision
The Finance Committee has decided not to recommend any additional tax cuts beyond those already scheduled and planned for. Faced with a deteriorating economic situation, the Premier announced in his televised address on October 22 a “10-point Plan on British Columbia’s Economy” that included reductions in personal income tax rates and the small business corporate tax rate for this fiscal year and subsequent years.
Another common theme, raised in the oral presentations and written submissions, was the need to increase the small business corporate income tax threshold so that British Columbia can remain competitive with other provinces, especially at a time of economic downturn. Here is a sample of the input we received from accountants and small businesses:
“Increasing the small business tax threshold can help our small business sector grow and prosper. In Alberta the business tax threshold was raised in their last budget to $500,000, which is consistent with Ontario and Saskatchewan. It would seem appropriate that B.C. match other jurisdictions and also increase our threshold.” (Tara Benham, Hayes Stewart Little & Co., Langford hearing)
“We recommend government increase the threshold from $400,000 to $750,000 and cut the small business tax rate to 2.5 percent today, and not wait until 2011.” (Brian Bonney, Canadian Federation of Independent Business, Sept. 29 Vancouver hearing)
“We would like to see further cuts in personal and business taxation to stimulate the economy as a recession looms. In particular, a reduction of the small business tax rate to 3 percent and an increase in the small business tax threshold to $500,000.” (Barbara Tinson, Richmond Chamber of Commerce, WS258)
Committee Decision
As an economic stimulus to the flagging economy, the Finance Committee recommends that the provincial government consider raising the small business corporate income tax threshold to $500,000 to match the threshold in Alberta.
The Finance Committee received many pleas for reductions to the property transfer tax which, under the formula, is 1 percent of the first $200,000 of a house sale and 2 percent of the remainder. Here is a sample of the public input on this topic:
“The government should raise the threshold at which the property transfer tax rate changes to 2 percent. Raising the threshold from $200,000 to $400,000, we estimate, would cost $165 million a year.” (Doug Wittal, Canadian Home Builders’ Association – Central Interior, Kamloops hearing)
“Except for first-time home buyers, B.C.’s property-transfer-tax regime is the most onerous in Canada and exacerbated by our relatively high home prices. Alberta and Saskatchewan do not levy such taxes. Therefore the Tri-Cities Chamber recommends the government increase the threshold at which the 2 percent PTT rate applies from $200,000 to $400,000 of real estate purchase value” (Jill Cook, Tri-Cities Chamber of Commerce, WS228)
“If there is any room left in the surplus funds, you should consider a further reduction in the property transfer tax or an increase in the current cut-off levels. This is a very negative tax and hurts first-time buyers (usually young couples) or lower-income people. (Robin Hill, Delta, Survey174)
“Since 1974 I’ve moved 9 times and this tax is depressing and debilitating.” (Sandra Gall, Port Coquitlam, Flyer489)
At the Surrey hearing, in the open-mike session, the Finance Committee heard a plea to amend PTT regulations in relation to bankruptcy. The British Columbia Insolvency Practitioners Association voiced its request in the following way:
“We request that government investigate to determine whether the regulations of property transfer tax can be amended to accommodate a bankruptcy situation so that the PTT is either: tax-exempt when the trustee in a bankruptcy transfers the estate’s interest back to the bankrupt, or calculated only on the value of the non-exempt equity paid to the trustee.” (Deane Gurney, B.C. Insolvency Practitioners Association, Surrey hearing)
Committee Decisions
Despite the repeated calls to consider addressing the 2 percent threshold, the Finance Committee has decided not to make a recommendation this year on the topic. Housing prices are adjusting to the changes in market conditions as a result of the economic slowdown.
The Finance Committee endorses the modest request for a change in the rules regarding a bankruptcy situation and asks government to consider amending the PTT regulations.
PST reduction
A considerable number of British Columbians who submitted flyer or on-line survey responses were in favour of cutting the provincial sales tax. The business community also advocated for a reduction. Here is a sample of their views:
“Reduce or eliminate the sales tax altogether and government will see a huge boost in the economy.” (F. Armanious, Vernon, Flyer475)
“The Kelowna Chamber recommends the government consider reducing the PST by 1 percent….” (James Paterson, Kelowna Chamber of Commerce, Penticton hearing)
“I would like the PST reduced to 5 percent and aligned to GST.” (Duncan Forbes, Victoria, WS093)
Committee Decision
At this time of economic uncertainty, the Finance Committee is not prepared to endorse pleas to reduce such an important source of government revenue.
PST exemptions
The Committee also received a number of submissions relating to PST exemptions for agriculture, forestry and the trucking industry. The requests were framed in the following way:
“Because of the high costs of inputs like fertilizers, we would really like to have the PST removed from all products sold to agricultural producers, (est. cost: $24 million)…. The present system is a list of exempt and non-exempt products, but it’s very inconsistent. One example is gravel — if gravel is spread by a truck, it’s exempt; if gravel is put in a pile, it’s not exempt.” (Hedy Dyck, B.C. Landscape and Nursery Association, Abbotsford hearing)
“While some aspects of the forest industry are PST-exempt, other costs are not. This has led to confusion amongst industry participants. The PST application needs streamlining, and the exemption status should be applicable across all manners of costs to log harvesting.” (Justin Rigsby, B.C. Chamber of Commerce, Courtenay hearing)
“To help the industry reduce fuel consumption, we request an extension of a PST exemption for the purchase of environmentally-friendly technology and other similar financial incentives (est. cost: $12.9 million per year for 3 years), as well as a one-year license fee exemption as an incentive to purchase 2009 or newer smog-free trucks (est. cost: $8.4 million per year for 3 years).” (Paul Landry, B.C. Trucking Association, Sept. 29 Vancouver hearing)
Committee Decisions
The Finance Committee is sympathetic to the requests for rationalization and simplification of the rules and, in some cases, a reduction of the PST for agriculture, forestry and the trucking industry.
For the trucking industry, we would propose creating a PST exemption for the purchase of proven fuel-reducing technologies, and providing truckers with a one-time licence fee rebate on the purchase of smog-free trucks.
PST on legal services
At the first Vancouver hearing, the B.C. branch of the Canadian Bar Association, which represents 6,000 practising lawyers from across the province, repeated its annual plea to eliminate the PST on legal services. The CBA president described the tax as “unfair and discriminatory” and pointed out that no other professional services are subjected to the tax, nor are legal services in any other province, making the cost of doing business in B.C. greater than elsewhere. She claimed the tax is also regressive, having a disproportionate impact on low and modest-income individuals and small businesses who are the least able to afford it. Here is a sample of support for the proponent’s case:
“We recommend government amend the Social Service Tax Act to remove the PST on legal services in B.C.” (James Paterson, Kelowna Chamber of Commerce, Penticton hearing)
“My first preference is to see the PST on legal services reduced or eliminated. This tax has two particularly negative effects on British Columbians that outweigh the usefulness of the revenues raised: (1) it is an impediment to access for justice to those who cannot afford legal services; and (2) it makes legal services provided by B.C. lawyers less competitive than lawyers in other provinces where legal services are not subject to provincial sales tax.” (Clayton Whitman, Vancouver, Survey033)
“End the PST on legal services – it is taxing access to justice.” (Karl Maier, New Westminster, Flyer666)
Committee Decision
After carefully considering this request, the Finance Committee has decided to recommend that the provincial government consider redirecting the PST revenue collected on fees for legal services to fund legal aid for eligible B.C. families.
Harmonized sales tax
As in previous years, the Finance Committee also heard the accounting profession’s case for harmonizing the provincial sales tax (PST) with the federal goods and services tax (GST) so as to reduce costs and the regulatory burden. Here is a sample of their views:
“B.C. businesses require separate recordkeeping, reporting and remittance for the GST and PST, creating unnecessary costs of accounting administration. In addition, businesses deal with two sets of auditors enforcing compliance at the federal and provincial level…. We recommend government reduce costs to small businesses by harmonizing the PST with the GST, as Quebec and some eastern provinces have done, which can be applied in a revenue-neutral way. ” (Richard Rees, Institute of Chartered Accountants of B.C., Sept. 29 Vancouver hearing)
“PST should be harmonized with GST and duplicate administration eliminated.” (David Edwards, White Rock, WS226)
“Harmonize the PST with the GST and hold the rate at 7%. This will save small business money on accounting and administration." (Brendan Burgart, Vancouver, Survey1417)
“Reduce business costs by harmonizing the PST with the GST.” (Rafik Karwa, Surrey, Flyer870)
Committee Decision
The Finance Committee thinks a cost-benefit analysis needs to be conducted to determine whether a harmonized sales tax may be worth considering.
Besides tax cuts, the Finance Committee also received suggestions concerning other taxation measures — including a tobacco tax increase, and tax credits for industry and the non-profit sector.
Last year, the Finance Committee recommended that the provincial government consider increases to taxation on tobacco to discourage use. At this year’s Burnaby and Surrey hearings, the Finance Committee was asked again to consider recommending a tobacco tax increase, and individual citizens also made a similar plea. Their requests were framed in the following way:
“We would like to see the tax loophole closed, which continues to exempt roll-your-own tobacco from some of the excise taxes on cigarettes, and to use these revenues along with others from increasing taxes on tobacco products to support actions that would help smokers quit.” (Jean Blake, BC Healthy Living Alliance, Surrey hearing)
“Last year, the Committee recommended that the government increase tobacco taxes. We commend you on that recommendation, and we’d like you to make that recommendation again.” (Kathryn Seely, Canadian Cancer Society, Burnaby hearing)
“Increase taxes on tobacco and alcohol.” (Ken and Angie Norman, Courtenay Flyer492)
Committee Decision
As in previous years, the Finance Committee is sympathetic to the case for discouraging smoking, using the mechanism of tax policy, and urges the provincial government to consider closing the existing loophole on roll-your-own tobacco.
During the consultations,the Finance Committee was impressed with the arguments made by the creative media sector that tax credits are ways of financing innovation — whether it is taking a new product to market, starting a new company or upgrading manufacturing/business processes to enhance competitiveness. Requests from other industries, including insurance, were also considered.
BC film and television tax credit
The B.C. film and television tax credit provides refundable tax credits to eligible corporations that produce eligible film or video productions in British Columbia. The program consists of five distinct credits, including the Digital Animation or Visual Effects (DAVE) Tax Credit.
At the first Vancouver hearing, the Finance Committee heard two requests to consider expanding the film and television tax credit to enable the film and television industry and the digital media industry to remain competitive. Their requests were framed in the following way:
“The tax credits have worked very well in ensuring steady levels of productions in BC, despite a higher Canadian dollar…. We would like to see government: change the visual effects tax credit to include digital animation, audio effects and post-production activities….” (Peter Leitch, Motion Picture Production Industry Association of British Columbia, Sept. 15 Vancouver hearing)
“B.C. is a premier global centre for digital media creation and commercialization. However, the industry is currently facing key challenges, partly because the playing field is not level between B.C. and other jurisdictions that offer labour tax credits. Consider expanding the film and television tax credit to include games, especially in the development of new original IP…. If we could create original content that resides here in British Columbia, that’s how we can win the long-term, digital media game.” (Kenton Low, New Media BC, Sept. 29 Vancouver hearing)
Mining flow-through-share tax credit
The B.C. mining flow-through-share (MFTS) tax credit program allows individuals who invest in flow-through shares to claim a non-refundable tax credit equal to 20 percent of their B.C. flow-through mining expenditures, and the expiry date for the MFTS program is December 31, 2008.
At the Coquitlam hearing, the Finance Committee heard a presentation from the president of Geoscience BC, who suggested that one way to stimulate new investment in the minerals sector was to extend the flow-through-share tax credit to attract more exploration investment to the interior, particularly in communities affected by the forestry downturn.
Business R&D tax credit
The Finance Committee also received some suggestions to provide tax incentives for business R&D. For example, at the first Vancouver hearing, we heard an interesting proposal from Genome BC that asked government to consider introducing a tax incentive for commercialization of intellectual property, along the lines of the refund recently introduced in Ontario. Under the Ontario program, a qualifying new corporation would commercialize intellectual property in one or more of the following priority areas for economic growth: advanced health, bio-economy (which includes clean energy technologies), telecommunications, computer or digital media technologies.
Committee Decisions
The Finance Committee supports the idea of using tax credits to facilitate economic growth and so urges government to consider expanding the tax credit for the creative media sector, extending the tax credit for mineral exploration, and introducing a new credit for the commercialization of intellectual property.
The Finance Committee also received a number of submissions from the non-profit sector asking for new or expanded tax credits for caregivers, charitable donations and to promote fitness.
Caregiver tax credit
In a written submission, the Western Region of the Victorian Order of Nurses (VON) Canada pointed out that the B.C. government already provides a number of services and supports to safeguard the emotional and physical health of caregivers. However, the maximum annual savings that B.C. offers to caregivers ($412) pales in comparison to the maximum offered by the federal government ($1,440). Its request was framed in the following way:
“To support caregivers’ financial health, the Victorian Order of Nurses recommends that the government of British Columbia increase the amount of savings caregivers can claim and match the federal government’s portion of caregiver, infirm-dependent and eligible tax credits.” (Sandra Golding, VON Canada, Western Region, WS257)
Charitable donation tax credit
Another request from the non-profit sector was made by the Vancouver chapter of the national Association of Fundraising Professionals (AFP). Its written submission pointed out that B.C. currently has the lowest rate of non-refundable charitable tax credits in the country, as well as one of the lowest donor rates, ahead of only Nunavut and Yukon. Therefore the AFP asked the B.C. government to increase the provincial portion of the non-refundable charitable tax credit for donations under $200 to 9 percent from the current 5.7 percent; and for donations over $200 to 21 percent from the current rate of 14.7 percent. Combined with the current federal tax rate of 29 percent, this increase would provide a maximum 50 percent non-refundable charitable tax credit to B.C. donors (est. cost: approximately $65 million per year). Here are the witnesses’ views on this topic:
“Increasing the non-refundable charitable tax credit for British Columbians would be a straightforward demonstration of the government’s support for the charitable sector.” (Jacqueline Smith and Amanda Gellman, Association of Fundraising Professionals Vancouver Chapter, WS265)
“Reduce personal income taxes by increasing the charitable donation tax credit.” (Geoffrey Davis, Westbank, Survey557))
“There should be a one-time tax credit for any taxpayer donating a gas or diesel auto for charity or recycling which may be used or applied against the purchase of a new vehicle.” (Pieter Botman, Vancouver, Survey1434)
Fitness tax credit
Lastly, the Finance Committee also received a proposal for a fitness tax credit from the Fitness Industry Council of Canada, another national organization with headquarters outside the province. In its written submission, the Council explained that it is pursuing a two-pronged campaign for implementation of a provincial adult fitness tax credit, which Nova Scotia has recently done; and the expansion of the existing federal children’s fitness tax credit to all age groups. The Fitness Council expressed its request in the following way:
“Now is the time for B.C. to act on further opportunities, including a fitness tax credit for all British Columbians, regardless of age. This credit would not only improve quality of life for the citizens of the province now, but would create tremendous benefits for British Columbia’s future - in lowered health-care costs, greater activity rates for all segments of the population and a fitter, more active lifestyle from childhood to retirement.” (Dave Hardy, Fitness Industry Council of Canada, Edmonton, WS186)
Committee Decisions
The Finance Committee is in favour of the three proposals from the non-profit sector and asks government to consider increasing the tax credits for home-based caregivers and for charitable donations, and introducing a fitness tax credit for children, students and seniors.
The Finance Committee recommends that the provincial government consider:
Q.2 Given that the Province has committed 2/3 of all new spending in the next 3 years to health care, what choices would you make on other priority investments in 2009?
The vast majority of British Columbians who participated in the budget consultations made recommendations concerning spending priorities — indeed, a few stated that program spending was their top and only priority.
Questions 2 and 3 of the Budget 2009 Consultation Paper gave the public two opportunities to express their spending priorities. In order to avoid repetition, this section of the report focuses on summarizing public input on program spending relating to environmental protection, economic competitiveness, community development, health, education and social development. British Columbians’ priorities regarding capital spending are summarized under Question 3.
This year, the Finance Committee again heard from all four streams of public input, that environmental protection is a top spending priority of British Columbians. During the budget consultations, we heard requests from environmental organizations and individuals to protect the environmental integrity of our coastlines and oceans, to enhance interpretation programs in parks, to provide more funding for wildlife inventories and research, and to increase staffing for conservation programs. We also received numerous requests, via the on-line survey and flyer responses, calling for government to enhance the budget of the Ministry of the Environment, including additional funding to BC Parks. Here are some examples of what we heard and read:
“Preservation of the environment should be the number one priority. If the environment is destroyed, nothing else will matter much.” (Cathy Morton, Burnaby, WS46)
“I would like to see environmental conservation in the next budget: investment in habitat, fisheries, clean water, migratory birds, etc.” (Danny Jones, Kelowna, Flyer426)
“This is the most beautiful place in the world. Please make conservation of our environment a priority.” (Janie Chang, Vancouver, Survey1104)
The Finance Committee received a number of submissions concerning the health of B.C.’s marine and coastal environments. One interesting proposal came from the B.C. Environmental Non-Governmental Organization Marine Planning Caucus (BC ENGO), made up of representatives from the David Suzuki Foundation, Living Oceans Society, and Sierra Club B.C. The BC ENGO made a specific request for the provincial government to work with other jurisdictions to collaborate on ocean-ecosystems management initiatives and to establish a network of marine protected areas. Part of this request for marine protection included increasing government collaboration with First Nations and coastal communities, who are key stakeholders in this area and have valuable input to share in the marine planning process.
Here is some of the public input we received on the topic of marine ecosystems:
“The BC ENGO Marine Planning Caucus strongly recommends that $6 million be committed over the next three years between the Ministry of Agriculture and Lands and the Ministry of Environment to engage in marine planning efforts throughout British Columbia. These funds are needed to increase capacity within these ministries to fully enable project work, information management, and representation on committees, plus relationship-building with First Nations.” (Colin R. Campbell, B.C. Environmental Non-Governmental Organization Marine Planning Caucus, WS153)
“Make the same commitment to our oceans and coastal waters that you’ve done for our lands. Currently our entire coastal waters are unplanned and mostly unprotected. So we recommend that you allocate $20 million per year over the next four years for this task.” (Chloe O’Loughlin, Canadian Parks and Wilderness Society, Sept. 29 Vancouver hearing)
“B.C. has made some impressive targets to protect our air and address the impacts of climate change. However, government continues to slip on our water environment and aquatic habitat.” (Chris Johnston, Surrey, Flyer635)
This year, the Finance Committee again received a number of submissions regarding the operating budget of BC Parks. While the specific requests for investment were diverse — ranging from increasing conservation staff and improving trails and signage through to developing new educational programs and interpretation services — the clear message was that increased investment in BC Parks is needed to encourage recreation, tourism, and environmental stewardship. Here are some of the comments we received:
“A $10-million increase in the budget of BC Parks has valuable spinoffs: healthy and active living, long-term community stability and pride through shared stewardship, revenue from tourists, and protection of our natural environment.” (Bev Ramey , BC Nature , Sept. 15 Vancouver hearing)
“In the last ranking of what British Columbians love most about B.C., B.C. parks came away the clear winner…. We therefore ask the Committee to recommend a new annual $30-million investment package for our expanded system to be operational for our 2011 parks centenary.” (Colin Campbell, Elders Council for Parks in British Columbia, Langford hearing)
“Improve the conservation officer service.” (John Dafoe, Halfmoon Bay, Flyer283)
“Increase the budget for managing provincial parks, especially for ‘on the ground’ staff.” (John Millen, Denman Island, Survey37)
During the public hearings, conservation organizations raised the issue of fish and wildlife inventories. They pointed out that outdated inventories and information are barriers to wildlife management and conservation planning, and requested increased funding to the tune of $3 million. This request was supported by on-line survey and flyer respondents who cited wildlife and fisheries management as a top spending priority. Here are some examples of what we heard:
“We see a lot of money being directed to climate change initiatives, but wildlife and fish species are key indicators of the impact of climate change. If we don’t have a proper baseline for measurement, how do we know what those impacts are?” (Wilf Pfleiderer, B.C. Wildlife Federation, Williams Lake hearing)
“Now more than ever, with the increasing human footprint on our province, we need to work collaboratively to ensure conservation of our fish and wildlife and their habitats.” (Patti MacAhonic, B.C. Wildlife Federation, Sept. 29 Vancouver hearing)
“Fund an objective wildlife study which produces an accurate, independent and scientifically credible count of the many species at risk in BC. Follow this with a scientifically credible restoration, conservation and management plan for wildlife.” (Pieter Botman, Vancouver, Survey1434)
“We need to monitor biodiversity in BC and take steps to protect all species.” (Doug Goodman, Port McNeill, Survey1068)
The Finance Committee also received submissions requesting that government provide increased funding for habitat conservation and restoration, including the removal of invasive species. For example, in the interior, conservationists voiced concerns about the adverse impact the spread of the non-native spiny-ray fish is having on local fish stocks in a number of lakes throughout the region. Other submissions also raised concerns regarding invasive species in different parts of the province. Below is some of the public input we received regarding invasive species management, habitat conservation and restoration:
“We would ask the Finance Committee to consider providing more moneys for invasive species management so that we can continue with this proscription to eradicate these spiny-ray fishes.” (Wilf Pfleiderer, B.C. Wildlife Federation, Williams Lake hearing)
“We are losing Crown range in the Rocky Mountain Trench because trees are overtaking our grasslands and open forests. The invasion of rangeland by unmanaged trees has caused calamitous economic, social, cultural and environmental problems for many decades in the East Kootenay…. We urge the government, in cooperation with other stakeholders, to continue to fund the Provincial and Regional Ecosystem Restoration Program beyond 2010.” (Dan Murphy, Rocky Mountain Trench Natural Resources Society, Cranbrook hearing)
“Slow down growth and stop paving over the beauty of the Okanagan. Look after the wildlife and nature – food for the soul, which is so badly needed in our high-tech society.” (Donald Wilson, Vernon, Flyer309)
“Combat invasive species, particularly bullfrogs and knotweed.” (Brian Allaert, Courtenay, Survey847)
Committee Decision
While the Finance Committee strongly supports the government’s goal of reducing greenhouse gas emissions, we believe that environmental protection encompasses more than just climate change. Action to protect our oceans and coastal waters, support our parks system, safeguard fisheries and wildlife, remove invasive species, and conserve and restore natural habitats is to the benefit of all British Columbians.
The Finance Committee recommends that the provincial government consider:
Some British Columbians making submissions to the Finance Committee recognized that in these uncertain economic times, it is important for our economy to be as diverse as possible. To facilitate diversification of the provincial economy, they suggested ways to strengthen the agriculture industry and proposed innovative projects in aquaculture and forestry to help promote diversification. The Finance Committee also heard additional requests for investments in the world-class research facilities based here in British Columbia, to give the province a competitive edge.
Ministry's operating budget
As in previous years, the Finance Committee received several requests asking for more investment in the agriculture industry, especially for local food production. The major organizations representing the B.C. agricultural sector, as well as individual citizens, requested increased funding for the Ministry of Agriculture and Lands, to bring that ministry’s budget closer to the Canadian average ratio of agricultural spending to agricultural GDP. Here is a sample of what they had to say:
“When provincial spending on agriculture is compared to economic contributions of agriculture, only the province of New Brunswick invests less in agriculture than B.C.” (Garnet Etsell, BC Agriculture Council, Abbotsford hearing)
“Increase funding to the Ministry of Agriculture and Lands to at least 16.4% of farm GDP. Our farmers are aging; our farmland is being developed. People need and want to eat local, but there is no support from the ministry to increase production, train new farmers, protect farmland and address food storage and distribution issues.” (Sandra & Jo Magee, Vancouver Flyer991)
“Increase the investment in agricultural infrastructure and assistance to new farmers, particularly those practising sustainable farming. The Canadian average investment is 16.4% of farm GDP and British Columbia should at least match, if not exceed this.” (Sue Moen, Black Creek, Survey717)
“Currently the COABC has received provincial government funding for three years for one position based in the Okanagan. We request funding of $1 million to expand the number of organic agriculture extension agents to four, to serve B.C. farmers and food processors across all regions over a three-year period.” (Peter Johnston, Certified Organic Associations of B.C., WS244)
Local food-processing facilities
The Finance Committee received some submissions asking for an increase in local food-processing capacity. Some British Columbians see this as a way to reduce our carbon footprint and increase self-sufficiency, while others focused on economic competitiveness. Here is a sample of their views:
“It would be terrific if some of this carbon tax went to projects that actually reduce carbon emissions…. Provide incentives to British Columbians to make the right choice when they’re looking at their projects. A perfect example is the Northwest Premium Meat Co-op, a small meat-packing plant in Telkwa, our neighbouring community. Cattle that are raised in the valley are put on a truck. They might go ten kilometres, or they might go 50 kilometres — probably not much more than that. They arrive at the Telkwa plant, are processed here and then sold to the local communities.” (Michael Mehr, Smithers hearing)
"The recent listeria outbreak in a federally registered processing plant in Ontario puts B.C.’s provincially licensed system under more scrutiny. The provincial system is smaller, is health-focused, and is intended to help meet the ever-increasing demand for local food. Short supply chains and regionally-based facilities support climate action, as well as disease control.” (Nico Human, B.C. Food Processors Association, Abbotsford hearing)
“Government should provide mechanisms to assist local farmers to bring their production to market. I urge the government to fund such actions as underwriting cooperatively-owned and operated portable abattoirs in many locations across the province and providing zero-interest loans to farms that opt to set up their own regulation-compliant abattoirs. The amount of money invested would be a few million dollars, yet these actions would do much to make small farming operations more viable and help B.C.’s citizens reduce their carbon footprint through buying locally.” (Bruce Batchelor, Victoria, WS240)
“Promote purchasing food from within B.C.; invest in programs and regulation that will encourage local production and manufacturing for local food markets.” (Nolan Steinwand, Fort St. John, Survey410)
Committee Decisions
The Finance Committee agrees that there is a need to increase the budget of the Ministry of Agriculture and Lands, and to expand local food-processing facilities. Therefore we urge the government to consider increasing the ministry budget closer to the Canadian average ratio of agricultural spending to agricultural GDP for further promotion of local food production and local food consumption. We also ask the government to consider working with the agricultural sector to encourage the development of local food-processing capacity in different regions of the province.
The Finance Committee heard concerns about the impact of open-net-pen fish farms on the marine environment. Others, though, proposed that fish farming could be a viable and sustainable industry. For example, an interesting joint proposal was submitted by Marine Harvest Canada and the Coastal Alliance for Aquaculture Reform, a coalition of seven environmental groups representing the David Suzuki Foundation, Friends of Clayoquot Sound, Georgia Strait Alliance, Living Oceans Society, Raincoast Conservation Society, T. Buck Suzuki Environmental Foundation and the Watershed Watch Salmon Society. They requested funding for ocean-based closed-containment pilot projects, which could generate an innovative, ‘made-in-B.C.’ solution to developing a sustainable industry in the province. Here is a sample of views on this type of proposal:
“The Coastal Alliance for Aquaculture Reform and Marine Harvest Canada recommend that the provincial government make a substantial investment in a new, closed-system aquaculture innovation pilot program to ensure that a fund is created to allow for development assistance for three commercial-scale pilot projects. Such a program should be set up in 2009 with funds becoming available for pilot projects by the end of that year. We estimate the cost to be $14 million; $10 million of public funding and $4 million from private sources.” (David Lane, Coastal Alliance for Aquaculture Reform; Clare Backman, Marine Harvest Canada, Campbell River, WS286)
“The majority of B.C. salmon farms are operated by companies with head offices outside of Canada. The global aquaculture industry suffers from many of the same issues wherever it operates. It would be nice if the solution, developing closed-system technologies, came from this province.” (Rob Walker, Middle Bay Sustainable Aquaculture Institute, Courtenay hearing)
“Invest in restoring the health of wild salmon stocks by moving to closed-containment fish farms.” (Darcy Mann, Victoria, Survey864)
Committee Decision
The Finance Committee supports additional investment in aquaculture projects that offer the potential of developing a made-in B.C. solution to the challenges facing the global industry. We urge the government to consider becoming a funding partner with the federal government and private industry in pilot projects for developing ocean-based, closed-containment fish farming technology.
Bioenergy products
The Finance Committee received presentations from the wood pellet industry, as well as individual citizens, on the economic potential of biomass energy production. Here is how they expressed their ideas for innovative uses for pine-beetle wood:
“Fibre from British Columbia’s pine-beetle infested woods could be dedicated to biomass energy production, in this way converting wood waste into a valuable wood pellet product that not only produces a highly efficient source of energy but also contributes to the reduction in carbon emissions.” (John Swaan, Wood Pellet Association of Canada, WS306)
“Last year, we made requests in a couple of different areas. One was the promotion of biomass heating systems, or green-energy solutions for home, commercial and industrial heating. The other was addressing stumpage rates on timber utilized for biomass production and ensuring bioenergy can create products from unwanted mountain pine beetle wood. This year, we would also like to add…the need to really seriously look at the harvest and reforestation of mountain pine beetle in the province.” (Paul Adams, SBC Firemaster Ltd, Abbotsford hearing)
“I would like to see subsidies to help start clean fuel or clean energy initiatives, like cellulosic ethanol from wood scraps.” (Olivier Lebastard, Burnaby, Survey533)
Committee Decision
The Finance Committee recognizes the urgent need to revitalize the forest industry. Therefore we ask the government to consider continuing to invest in emerging industries in the bioenergy sector that are utilizing pine-beetle wood.
Mountain pine beetle epidemic
At the public hearings in Prince George and Courtenay, the Finance Committee heard pleas for assistance to deal with the consequences of the mountain pine beetle epidemic from elected officials of the cities of Prince George and Quesnel and the B.C. Chamber of Commerce. Individual citizens also asked for support to revitalize the forest industry. Here is how they framed their requests:
“We recommend that the 2009 budget create strong incentives for the future of our communities in the face of the pine beetle epidemic.” (Mayor Nate Bello, City of Quesnel, Prince George hearing)
“The forest industry is facing a reduction in timber supply resulting from the pine beetle epidemic, and the traditional market for manufactured products is weakening. Unless there is an investment in new industries, northern British Columbia will experience job loss and all of British Columbia will feel the pain.” (Councillor Don Zurowski, City of Prince George, Prince George hearing)
“The Cariboo-Chilcotin area needs economic diversification to remain a net contributor to the province. We ask that government support the Cariboo-Chilcotin Beetle Action Coalition plan. This plan constitutes a best effort on behalf of the people in the region, and it’s not to be underestimated in terms of the potential it holds for economic diversification.” (David Zirnhelt, Williams Lake hearing)
“Put more effort with support from the federal government into identifying ways to control and contain the pine beetle infestation.” (Ron Beer, Peachland, WS278)
Committee Decision
The Finance Committee encourages the provincial government to continue working closely with the federal government, as well as industry and local communities, to develop a more comprehensive and coordinated response to the mountain pine beetle epidemic.
At the Vancouver hearings, two research organizations, based in the lower mainland, requested additional resources in scientific research. Genome British Columbia is an independent non-profit organization that invests in and manages large-scale, cutting-edge research projects in such important areas as human health, forestry, fisheries, ethics, agriculture and the environment. TRIUMF is a world-class subatomic physics research laboratory located on the campus of the University of British Columbia. Here is a summary of their requests:
“We are requesting an investment from the BC government of $85 million for the 2010-2015 cycle. Receiving these funds will allow us to leverage more funds from other investors.” (Alan Winter, Genome BC, Sept. 15 Vancouver hearing)
“The challenge for us at the moment is how we can engage the provincial government in trying to get the funding for our laboratory for the next five years and also making sure that the company we just started becomes a really innovative engine for developing technologies in B.C.” (Jean-Michel Poutissou, TRIUMF, Sept. 29 Vancouver hearing)
Committee Decision
The Finance Committee thinks investing in scientific research will have significant payoffs down the road. We propose that government continue working with B.C.-based research agencies to ensure that their ongoing research programs, especially leading-edge initiatives, receive sustainable funding.
Several submissions were received by the Finance Committee requesting additional resources for the Provincial Nominee Program. This program offers accelerated immigration for qualified skilled workers and experienced entrepreneurs who wish to settle in British Columbia and become permanent residents of Canada. Here is a sample of the submissions we received on how to promote greater labour mobility:
“BCCA recommends that government reinforce their commitment to the Provincial Nominee Program and commit additional resources to bolster it, to ensure both employers and immigrants have timely access to the program.” (Manley McLachlan, B.C. Construction Association, Langford hearing)
“The B.C. government has done a great job managing our economy for the last eight years and has got it right on the big-picture issues like lowering taxes, investing in infrastructure and working to reduce barriers to trade and labour mobility. As we enter the next budget cycle in tightening world economic conditions, ICBA believes we should focus even more on these priorities.” (Philip Hochstein, Independent Contractors and Businesses Association of British Columbia, Langford hearing)
“Increase assistance to new immigrants in obtaining suitable employment on the qualifications they have.” (Joseph Fernando, Nanaimo, Flyer403)
Committee Decision
The Finance Committee recognizes that barriers to labour mobility are impediments to economic competitiveness, and asks that government consider revising the Provincial Nominee Program.
The Finance Committee recommends that the provincial government consider:
The Finance Committee received various suggestions on how to promote community development. One common message from interior and northern communities was the need for continued investment, through the Northern Development Initiative Trust, a regional economic development corporation that focuses on diversification and job creation. We also received ideas on how to utilize technology to promote regional development and promote arts and culture. Calls for a tourism marketing strategy were also considered.
At the Prince George hearing, a number of presenters described the Northern Development Initiative Trust as an innovative option for cost-effective program delivery to rural, central and northern B.C. The Finance Committee also received a more modest request to consider funding the installation of video-conferencing facilities in cities throughout the north to increase participation in regional meetings and training. Here is a sample of what people had to say on regional initiatives:
“The communities and businesses involved take pride in the shared governance and the highly effective, low-cost delivery model where performance is measured. The Trust has a balanced suite of community funding and business programs. We have over 96 percent consensus, and that means very little controversy. The communities have really seen the opportunity to build capacity and collaborate rather than compete.” (Janine North, Northern Development Initiative Trust, Prince George hearing)
“The Trust has been a very effective low-cost delivery agent for a significant amount of dollars that have flowed into our community. We have seen just a tremendous boost from those dollars that enabled us to take on projects and initiatives that we would not have been able to do without that assistance…I and my whole community wholeheartedly support the mandate of the Trust being expanded and more dollars being placed into it.” (Mayor Len Fox, District of Vanderhoof, Prince George hearing)
“We congratulate the government for its creation of the Trust, and we recommend that government continue to invest in the sub-regional portfolios of the Northern Development Initiative in the amount of at least $10 million a year over the next ten years to start moving beyond planning.” (Mayor Nate Bello, City of Quesnel, Prince George hearing)
“Video conferencing will expand the opportunity for people to attend regional meetings and also to train at home, which will increase productivity and reduce costs. Video conferencing facilities should be funded by the province in partnership with the colleges.” (Rick Publicover, Central Interior Logging Association, Prince George hearing)
Committee Decisions
The Finance Committee encourages the government, if there is fiscal room in the next budget, to look at continued investment in the Northern Development Initiative Trust, which has developed an innovative service-delivery model to meet the need of northerners.
We endorse the modest request for video-conferencing as this would significantly reduce the cost of travel and accommodation, as well as greenhouse gas emissions, and provide opportunities to network and share information.
At the public hearings in Williams Lake and Prince George, and via the on-line survey responses, requests were made for government assistance to ensure that rural remote communities throughout the province have access to broadband Internet services:
“Broadband connectivity across the north is an issue, despite very progressive efforts of the Premier’s Technology Council and other government efforts to bridge the digital divide in the north…When we’re trying to build an economy based on transportation and logistics moving forward, we do need to have leading-edge fibre and connectivity in the north.” (Tim McEwan, Initiatives Prince George, Prince George hearing)
“We would like to see government commit to providing Alexis Creek with an affordable high-speed Internet service currently enjoyed by other communities and offices in the Chilcotin.” (Doug Porter, Williams Lake hearing)
“We need to make sure we keep our small towns running so getting high speed Internet to them is important. It may sound like a simple thing, but it would enable a lot of people to stay in the small towns and develop some home-based businesses.” (Sarah Ruth, Squamish, Survey1353)
Committee Decision
The Finance Committee endorses the idea of providing all citizens of the province with broadband access to the Internet.
The Finance Committee received a clear message from many written submissions that ferry fares on southern coastal routes are having a detrimental effect on isolated communities. Residents of the Gulf Islands, for example, reported that increases since 2003 have led to fewer visitors and less business, negatively affecting their communities' social and economic fabric. They requested government consider reducing fares on minor routes. Here is a sample of what they had to say:
“Accessible and affordable transportation is a key to economic activity for coastal communities. The budget should provide for an immediate cash infusion into the minor routes of B.C. Ferries, enabling a rollback in fares.” (Tony Law, Ferry Advisory Committee Chairs, Courtenay hearing)
“Recent fare increases by BC Ferries are endangering the well-being of many of these communities and forcing some residents simply to leave. In particular, these increases are threatening the core of residents who operate businesses, teach in our schools, serve as trades people and make up the artistic component of our communities. Many of these individuals depend heavily on tourists visiting the islands. It is imperative, therefore, that the ferry system remain affordable for the average British Columbian wanting to visit these areas, as well as for the many residents of modest income.” (Chris Luckett, Denman Island, Survey44)
“The Chamber is writing to support the Ferry Advisory Committees Chairs’ submission requesting more funding for the ‘minor routes’ serving south coast communities.” (Dr. Jan Maynard Nichol, Mayne Island Community Chamber of Commerce, WS290)
“I took out a mortgage for a B&B to build on tourism and now I find that my business is 40 to 50 percent down due to ferry fares. It is not affordable for people to come as they used to for one or two day trips.” (Michelle Easterly, Hornby Island, WS203)
Committee Decision
The Financial Committee thinks it is important to sustain coastal communities in all parts of the province. Therefore, we would ask government to encourage B.C. Ferries to rationalize ferry fares on minor coastal routes on an equitable basis.
The Finance Committee received several submissions identifying the need for investment in a tourism marketing strategy to stimulate not only economic activity but also community development. Individual citizens and the small business sector were the main proponents, as the following quotes illustrate:
“Continue to build the B.C. tourism industry by advertising and building on our core strengths.” (Duane Shaw, Mission, Survey682)
“Provide tourism grants; tourism attracts new visitors which positively impacts the economy.” (Renata Poirier, Houston, Flyer239)
“Invest in rural communities who are developing tourism products to replace lost employment from logging.” (Arnold Wied, Valemount, Survey231)
“To receive long-term tourism benefits from the Olympics, it is vitally important that the province increase its marketing efforts for tourism locations around the province. We recommend an increase in the tourism marketing budget allocation to Tourism BC and to regional marketing agencies to better capitalize on post-Olympic opportunities.” (Shannon Renault, Greater Victoria Chamber of Commerce, Langford hearing)
As in previous years, stable funding for the arts community was a common theme of the budget 2009 consultations. Arts organizations expressed their appreciation for existing investments — like the BC Arts Renaissance Fund and the BC 150 Cultural Fund. However, they pointed out that these endowment funds do not provide adequate or stable funding. Here is a sample of the requests:
“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.” (Roger Chilton, Arts Future B.C., Coquitlam hearing)
“Please continue to invest in the B.C. Arts Council. A provincial investment of $32 million per year will provide the appropriate level of operating support for the sector.” (David Shefsiek, Professional Arts Alliance of Greater Victoria, Langford hearing)
“Increase arts funding. I am embarrassed that B.C.’s public art funding is well below many other provinces. The economic spinoff to municipalities through art events is well documented. A well-rounded education including the arts is the sign of a well-balanced society and should be encouraged.” (Janet M’Ghee Dockerill, Sidney, Survey160)
“I would like to see our arts programs receive consistent support and funding on an annual basis, not subject to material swings that can be both disruptive and counterproductive.” (Duncan Forbes, Victoria, WS093)
Committee Decision
The Finance Committee is sympathetic to the calls for increased investments in arts and culture and urges government to ensure that B.C.’s arts funding ranks in the top three provinces in Canada.
The Finance Committee recommends that the provincial government consider:
Question 2 of the Budget 2009 Consultation Paper points out that the provincial government has already committed two-thirds of all new spending in the next three years to health care and asks British Columbians where they would like to see the remaining one-third spent.
The Finance Committee received several submissions that proposed ways to reduce health spending. These included general pleas to curtail spending and improve productivity. Here is a sample of what we heard and read:
“The lack of action on health care spending has been disappointing. The Conversation on Health has not produced any concrete solutions and health care costs continue to spiral upward. This unsustainable spending can only be contained when productivity in health care is improved.” (Barbara Tinson, Richmond Chamber of Commerce, WS258)
“Quit throwing money at health care, it has not improved anything. Find another way.” (Georgie McFarland, Chase, Survey194)
At the public hearing in Burnaby, the Finance Committee received a specific suggestion from the pharmaceutical industry on how to reduce costs. Canada’s Research-Based Pharmaceutical Companies asked the province to consider lowering the price of generic prescription drugs and reinvesting the cost-savings in new, innovative medications. They cited as a model the recent reform in Ontario, which has reduced the maximum pricing on generic drugs it buys to 50 percent of the brand-name drug price in 2006, and then explained their proposal in the following way:
“Based on the current pricing of generics in British Columbia, which is at 64 percent of brand price, the projected five-year savings are estimated to be $233 million. These savings would be increased to $323 million if generics were priced at 50 percent of brand price, like Ontario has recently done…The budget savings found through pursuing better prices for generic drugs can be used to reinvest in new, innovative medicines. Prescription drugs have one of the best returns on investment in B.C. health care.” (Stelios Azoudis, Canada’s Research-Based Pharmaceutical Companies, Burnaby hearing)
Committee Decision
The Finance Committee acknowledges that government has committed two-thirds of all new spending in the next three years to health care, and agrees that continued effort should be made to ensure cost-effectiveness. We therefore encourage the government to examine new, potential cost-saving measures, including securing advantageous pricing for generic drugs.
The Finance Committee received many submissions from British Columbians residing in all parts of the province, whose top priority is improving the quality of and access to health care services, through increased spending. The British Columbia Medical Association also presented the case for continued investment in health care. Here is a sample of these requests:
“Even in these tough economic times, health care remains a top priority for our province…As we move into the second year of that three-year, $3-billion commitment it is imperative that we maintain our focus on critical areas of need in our system — continuing and home care, acute care capacity, waitlists and addictions care — where we can make investments that improve care and reduce costs to the system as a whole.” (Dr. Bill Mackie, British Columbia Medical Association, WS217)
“More spending on health care is acceptable, particularly focused on more efficient systems for reducing wait times, encouraging physicians to live in smaller centres and training more medical personnel.” (Joan Bernard, Kamloops, Survey 1059)
The public’s input also included requests for improvements in the delivery of mental health and addictions services, seniors’ care, and services for people with brain injuries. Human resource issues were also raised by British Columbians who participated in the budget consultations.
Mental health and addictions services
As in previous years, the Finance Committee received calls for increased investment in mental health and addictions services. A number of individuals expressed concern regarding the links between mental health, addictions, and homelessness. Submissions requested funding for a range of services, from treatment and recovery facilities through to housing and supports for front-line staff. Below are some of the requests we received:
“We recommend more beds for individuals with concurrent mental health and addiction issues across the continuum of care — detox, long-term treatment, low-barrier supported housing and independent housing.... The province has made several significant steps already, but much more is required, and it will take all of us working together – municipal, provincial and federal governments along with partners in the community sector – to ensure that all British Columbians have the homes and supports they need.” (Bill Wright, Canadian Mental Health Association – BC Division, Sept. 29 Vancouver hearing)
“We lack adequate operating funds for the Fraser Health Authority, especially in the area of mental health and addictions. This region lacks adequate funding for psychiatrists. We lack adequate licensed regulated facilities offering supportive recovery services. We lack low-barrier licensed and regulated facilities for many chronic cases of substance abuse and/or addictions.” (Councillor John G. Smith, City of Abbotsford, Abbotsford hearing)
“I think a priority of government should be prevention and treatment of mental health problems, through everything from counselling to legitimate, supervised medication to secure housing in more extreme cases. These people should not be abandoned to flounder on their own. The cost to society of cutting them loose is much higher than the cost of treating their illnesses.” (Cathy Morton, Burnaby, WS046)
“Invest in housing for the mentally ill, and affordable residential addiction treatment programs, especially for women.” (Jean Ennis, Courtenay, Survey1350)
“While I am encouraged by recent developments in the area of mental health and addictions, attending to the basics of food, shelter, life skills and mentoring for “abandoned” youth remains an area of service need.” (John Rogerson, Nanaimo, Survey 1313)
Committee Decision
In light of the public input on this topic, the Finance Committee agrees that both mental health and addictions services are priority areas for investment. We encourage the provincial government to work with municipalities to provide additional recovery houses and beds for people struggling with mental health issues and addictions.
Seniors’ care
During the public hearings, the Finance Committee heard from a number of community-based social service agencies that requested increased funding for home and community care, more independent-living units, and improvements to residential care. These requests were reiterated by many on-line survey and flyer respondents who requested increased investments in seniors’ care. Here is a sample of what we heard and read on the topic of seniors’ care:
“Proper expansion of home care is both economic and humanitarian.” (Robert Ewashen, Creston, Survey718)
“There should be increased and accelerated investment in assisted-care housing and in-home care services for seniors; this is an area where there is a growing deficit and where a major societal challenge is about to explode.” (Michael McKibbin, West Vancouver, Survey263)
“We advocate for a higher ratio of staff in order that our residents can have more than one scheduled bath a week, so that our dementia patients and those confined in chairs can be taken outside and enjoy the fresh air, and so that staff have the opportunity to sit and spend a little time interacting with those who have contributed so richly to our province.” (Heather Reay, Terraceview Family Council, Kitimat hearing)
“Expansion of seniors’ extended care facilities in innovative ways to make them more home-like. And also provide funds to hire more staff to work in them.” (Ray Hall, Abbotsford, Flyer965)
Committee Decision
The Finance Committee agrees that investment in seniors’ health care is an important priority. We encourage government to target additional funding to improve the quality of life for seniors in B.C. requiring in-home care services.
Services for people with brain injuries
During the Coquitlam public hearing, the Finance Committee heard a plea from the B.C. Brain Injury Association for $250,000 in annual funding to establish a central organization to provide information on services for people with brain injuries residing in B.C. communities. The Association expressed its request in the following way:
“We need to have a central body that is aware of where the services for brain-injured people 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 the services start and stop.” (Margaret Ickert, B.C. Brain Injury Association, Coquitlam hearing)
Committee Decision
The Finance Committee agrees with the B.C. Brain Injury Association that access to information re services for people with acquired brain injuries should be improved, and we therefore encourage government to consider coordination of information and services.
Human resources
During the budget consultations, the Finance Committee received a number of submissions voicing concern about the shortage of medical personnel throughout the province. Suggestions included removing barriers to allow more foreign- and Canadian-trained doctors and residential care aides to practice in British Columbia, and increasing the supply of doctors and nurses. Here is a sample of some of the requests we received:
“Allow more doctors into Canada from the developed countries, with fewer restrictions applied. Allow qualified personnel to relocate within Canada with no restrictions – abolish mandatory re-taking of examinations for professionals who have previously qualified in another province.” (Ronald Cann, Qualicum Beach, Survey307)
“Increase available spaces for the training of nurses and doctors. Allow immigrant trained nurses and doctors to work in their professions.” (Miles Kellerman, North Vancouver, Survey1378)
“Currently British Columbia is spending $1.68 million to create 213 residential care aide seats in the institutions…By allowing people to come as residential care aides under the Provincial Nominee Program, you will not need to be spending that money.” (Shawn Bowden, Ugnayan Foundation, Burnaby hearing)
Committee Decision
The Finance Committee is concerned about the shortage of health care professionals in the province. We urge the government to examine potential opportunities in both inter-provincial and international labour mobility to recruit more health care professionals and front-line staff.
Alcohol consumption
In 2007, the Finance Committee recommended that the provincial government consider the use of tax policy to encourage sales of lower-alcohol-content beverages and to promote a general reduction in alcohol consumption, based on a presentation by the Centre for Addictions Research of B.C., University of Victoria.
At this year’s Langford hearing, the Centre’s director reiterated his plea for government to do more to regulate alcohol consumption. His recommendations included: providing incentives for the manufacture, marketing and sale of lower alcohol products; ensuring that alcohol is not sold for less than an annually updated minimum price; ensuring alcohol prices keep pace with the cost of living; and creating a “nickel-a-drink” harm levy to fund new addiction treatment and prevention programs. He stressed the benefits of these proposals in the following way:
“If carefully implemented, these changes would decrease alcohol consumption and related social, health and economic costs while not adversely impacting industry profits or government revenue.” (Dr. Tim Stockwell, Centre for Addictions Research of B.C., Langford hearing)
Committee Decision
The Finance Committee supports initiatives to promote healthy living and has already endorsed the idea of a fitness tax credit (see pages 15-16). We appreciate that excessive alcohol consumption may incur extensive costs and so suggest government consider asking the Legislative Assembly to conduct a more in-depth inquiry into the economic, health and social costs.
The Finance Committee recommends that the provincial government consider:
As in previous years, a number of submissions from teachers, school trustees, school administrators and parents focused on the need for more funding and resources for students in the K-12 education system. Their requests fell into two broad categories: a general increase in the operating budget and/or targeted program funding.
Numerous oral presentations and written submissions called for more financial support for the education system to improve the quality of education for students in B.C.’s public schools, especially for special needs students. This theme of more investment in K-12 education was echoed by people who responded to the online-surveys and household flyers, many of whom emphasized the importance of investing in the education of future generations. Here is a sample of what we heard and read on the topic:
“I would like to see a further investment in our children, who are the future of this province.... Your paper shows increased funding to education, and so there has been, but it is not enough to adequately support the increased operating costs or the increased mandates to Boards, let alone the many existing gaps.” (Josie Fletcher, Vancouver Island West Board of Education, Tahsis, Survey1352)
“Increase education funding. Children and youth are our future and are truly worth every penny we spend on them.” (Antoinette Spoor, Nanaimo, Flyer222)
“We hear that support for students with special needs is the number one issue for teachers in this province, and it has been for a long, long time. I hear from teachers everywhere in the province that this is a critical issue requiring more funding and support from the province.” (Irene Lanzinger, British Columbia Teachers' Federation, Sept. 29 Vancouver hearing)
“I am beseeching you on behalf of all special needs children in the province of B.C. that when you’re planning the budget for 2009, and for many years to come, please do not forget these kids with special needs, who always seem to be forgotten.” (Janice Brulotte, Cranbrook hearing)
Committee Decision
The Finance Committee heard a number of requests for additional funding that we considered seriously since we recognize the importance and value of K-12 education. We also recognize that there are significant fiscal challenges facing the province and so we recommend that the Minister of Education and Minister of Finance continue to work with educational stakeholders to discuss how best to deliver educational programs.
At the Nelson hearing, the Finance Committee heard an interesting proposal to address opportunities for enhanced learning in the sciences. Science World British Columbia explained that the B.C. Program for the Awareness and Learning of Science (BC PALS) is a province-wide educational program for children in grades K-7. The program is now in year 4 of a five-year grant from the Ministry of Education, which provides $1 million a year. Science World framed its request for an extension of the program in the following way:
“We request a future commitment of $2 million per year beyond March 10, 2010, in order to expand the program for secondary students, home-schoolers, and underprivileged groups, including First Nations. This program gives every K-7 student in the province the opportunity for one free interaction with Science World every year.” (Bryan Tisdall, Science World British Columbia, Nelson hearing)
Committee Decision
The Finance Committee supports this request for an extension, and we urge government to consider supporting enhanced educational opportunities in the sciences for students in the K-12 system.
Student unions, faculty associations and senior administrators of the province’s colleges and universities were well represented at the public hearings. British Columbians who sent in written submissions, online surveys and household flyers also identified post-secondary operating budgets and access issues as top spending priorities.
As in previous years, the Finance Committee heard repeated calls to invest more in advanced education. Many submissions stressed the importance of ongoing stable funding to meet the demand for programs and also the significant role colleges and universities play in the knowledge economy. Here is a sample of their views:
“A critical public policy issue is the importance of sustaining the very important and very significant investments that the government of British Columbia has made in post-secondary education. We have seen, in many respects, a renaissance in funding and support for post-secondary education on a number of fronts, and most significantly on the capital front. It’s on the operating side where the need to keep pace with those investments has lagged somewhat behind it and requires additional attention.” (Don Avison, University Presidents’ Council of British Columbia, Sept. 15 Vancouver hearing)
“For universities, as for any publicly funded sector such as health care, stable funding is one of the most important things we need. It is very difficult for us to plan when our planning horizon is only year to year, depending upon what we might find in the provincial budget.” (David Atkinson, Kwantlen Polytechnic University, Surrey hearing)
“If the funding our college receives in 2009-10 does not increase, we’re going to face a budget shortfall again next spring, and the college will have no options except to discontinue more instructional programs and services for students.” (Bruce Sutherland, College of New Caledonia, Prince George hearing)
“To attain the goal of being the best-educated province in Canada, it is imperative to continue to fully invest in our colleges. Not only does it make good fiscal sense, but it especially makes sense for those individuals who will personally benefit and will continue to contribute to the wealth and well-being of our communities.” (Janet Shaw, Okanagan College, Penticton hearing)
Committee Decision
We agree with the public that investment in post-secondary education is an important spending priority, and so the Finance Committee urges the government to continue to work to ensure the financial viability of B.C.’s colleges and universities.
Under the umbrella of the Canadian Federation of Students, student unions from different parts of the province made requests to reduce the cost of post-secondary education. Their pleas were echoed by faculty associations, university and college administrators, the business community and concerned British Columbians. Their suggestions to improve access included calls for more graduate scholarships, reinstatement of grants and changes to the student loan program.
Graduate scholarships
With regard to graduate scholarships, the requests submitted to the Finance Committee often acknowledged that the establishment of a provincial scholarship program for graduate students in 2007 represented progress towards the goal of recruiting top students to our institutions. However, in order to remain competitive, the province’s universities required more investment to encourage graduate students to study in British Columbia. They expressed their requests in the following way:
“We do the best we can with the government and private money we have, but there are a great many potential future leaders in our graduate programs who are not receiving any financial support from us. This means that we lose out in recruiting top students from across the country. More importantly, we lose out when British Columbians are enticed to better-funded universities elsewhere in Canada and internationally.” (Robert Clift, Confederation of University Faculty Associations of B.C., Sept. 29 Vancouver hearing)
“Attracting more top-flight graduate students to our institutions has been a proven way to build new wealth in a number of other jurisdictions, and we should be doing the same thing.” (Jock Finlayson, Business Council of British Columbia, Sept. 29 Vancouver hearing)
“Increase the value of the Pacific Century Graduate Scholarship from $10,000 to $10,800 for master’s students and $15,000 for doctoral students to match Alberta.” (JR Welch, Burnaby, Survey1213)
“An increase in scholarship funds for universities is needed. The cost of living and going to school keeps going up. It is tough to live and go to school for the majority of students.” (Stephanie Jury, Victoria, Survey1445)
“Not only would a fellowship allow Aboriginal graduate students the opportunity to enter and successfully complete graduate studies at a much higher rate than the current case, but such a fellowship would also demonstrate B.C.’s leadership in Canada in developing the talent of the next generation of Aboriginal leaders.” (Leslee Francis-Pelton, University of Victoria Faculty Association, Langford hearing)
Committee Decision
The Finance Committee agrees with the public’s suggestions for more investment in graduate scholarships, and asks government to make this a spending priority.
Student loans
Many submissions from student unions and faculty associations, as well as individual citizens, noted how high interest rates on loans add to total student debt loads. They asked that interest rates on student loans be dropped to the government rate of borrowing (5 percent) to reduce the burden on students, or that loan interest be eliminated altogether. Here is what they had to say:
“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 for it upfront. 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 for it.” (Shamus Reid, Canadian Federation of Students, Sept. 29 Vancouver hearing)
“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.” (Rachel Simpson, Emily Carr Students Union, Coquitlam hearing)
“Most people can obtain a line of credit, if they qualify, for prime plus 1.25 percent. I understand that student loans are prime plus 2.5 percent. I think lowering student loans to the same rate would help students.” (Thomas Pflanz, Keremeos, Flyer971)
“To enable access to education, decrease student loan interest and make loans more accessible.” (Kris Ross, Victoria, Survey1135)
At the first Vancouver hearing, both the B.C. branch of the Canadian Bar Association and the University Presidents’ Council of British Columbia raised the issue of the start date for the repayment of student loans in the cases of articling law students and medical students. Here are their views on this topic:
“We propose that the period while a law student articles be considered ‘full time study.’ This would result in student loans staying in the “no payment / interest free” status for the entire 12 months of articles and then converting to “no payment / interest accruing” status for the following six months, as opposed to commencing the moment classroom studies cease.” (Miriam Maisonville, Canadian Bar Association – B.C. Branch, Sept. 15 Vancouver hearing)
“We want to ensure that those students who are required to continue to meet a number of conditions before they can qualify to practice aren’t unreasonably prejudiced by the nature of the student loan repayment system in British Columbia’s universities.” (Don Avison, University Presidents’ Council of British Columbia, Sept. 15 Vancouver hearing)
Committee Decision
The Finance Committee agrees that loan relief for students is a spending priority, and urges government to consider expanding programs in this area to further benefit students.
Grants
Another common request by students unions and other concerned British Columbians was the call for an up-front student grants program to address barriers to education for low- and middle-income students. Here is a sample of the requests we heard and read:
“We recommend that government reinstitute a B.C. student grants program, coupled with the Canadian student grants program, to close the access gap and broaden participation in post-secondary education for low-income British Columbians.” (Derek Robertson, Kwantlen Student Association, Sept. 15 Vancouver hearing)
“I recommend there be relief for post-secondary students with debts by lowering or eliminating tuition fees, and by increasing bursaries for students.” (Wayne Babinchuk, Kamloops, WS064)
“As parents of students we urge a rethinking of a system which condemns young people to a minimum wage or a debt larger than a mortgage. We ask that you consider a non-repayable grant system.” (Christian & Jean Haugland, Peachland, Survey404)
“Give more grants and bursaries to students.” (Michelle Gendron, Sardis, Flyer625)
Committee Decision
Although the Finance Committee had a difference of opinion on the need to restore up-front grants, we did agree that students need certainty with respect to partial remission of student loans on successful graduation. Therefore we recommend that the terms for remission be built into the student loan contracts so students will have certainty.
Access for income assistance recipients
Another access issue raised with the Finance Committee was the lack of opportunity for income assistance recipients to enhance their education and skills. Although adult basic education is now available tuition-free through post-secondary institutions, some submissions suggested that income assistance recipients could also benefit from short-term upgrading courses to further encourage the transition to the workforce. The ACE IT program, offered through the Industry Training Authority, was also raised as an opportunity for secondary school students to obtain both high school graduation credits and credits for technical training towards the completion of an apprenticeship program. Here is a sample of the requests:
“Give more educational opportunities for people on social assistance.” (Margaret Hill, Crescent Valley, Flyer216)
“To better utilize the social capital potential of at-risk youth to address B.C.’s labour market demand and labour supply shortage, we recommend a substantial increase in investment in pre-employment education and training.” (Steve Arnett, Nanaimo Youth Services Association, WS298)
“Post-secondary education should be open to all income brackets of society, not just middle- and upper-income.” (Derek Robertson, Kwantlen Student Association, Sept. 15 Vancouver hearing)
“We have a shortage of tradespeople. Government should use money spent on welfare and UI to sponsor apprenticeships for students wanting a profession as a tradesman.” (George Hamp, Burns Lake, WS289)
Committee Decision
The Finance Committee recognizes that people living on low incomes have limited access to educational opportunities. Therefore we urge government to consider allowing income assistance recipients to take short-term educational upgrading courses to obtain job skills without losing their eligibility for income assistance.
The Finance Committee received a request from the British Columbia Chiropractic Association asking the provincial government to consider establishing a chiropractic degree program. At present, some 40 doctors of chiropractic are licensed each year, all of whom trained out of province or outside Canada. The Association believes a home-grown program would attract international students as well as provide opportunities for B.C. students. Its request was framed as follows:
“We need to grow and develop our own organic health care professionals. We know statistically that at least one-third of all daily health care services provided in Canada are for spine and spine-related conditions; it’s a very large component of the daily health care needs of British Columbians. We have been committed to developing a chiropractic degree program at a public university within British Columbia. This will allow British Columbians to get their education here in British Columbia, and it supports British Columbia in being a leader in education, research as well as the sciences.” (Dr. Don Nixdorf, British Columbia Chiropractic Association, Vancouver hearing)
The Finance Committee was also asked by the Prince George Chamber of Commerce to consider recommending that an engineering program be established at the University of Northern British Columbia to address the shortage of engineers and technologists in the region. The Chamber saw this type of professional training as a way to enhance economic development in the north:
“Let us look at how we can educate technicians, technologists and engineers in the north for the north. We have wonderful post-secondary educational institutions. Unfortunately, at this time we do not educate engineers at our university…So it’s on the priority list of all the chambers of B.C.” (Albert Koehler, Prince George Chamber of Commerce, Prince George hearing)
Committee Decision
The Finance Committee thinks both these proposals are worth pursuing, and we urge government to work with post-secondary institutions to expand professional training opportunities in the health and engineering fields.
Finally, the Finance Committee heard calls urging the provincial government to provide dedicated funding to extend the universal transit pass to all public post-secondary institutions in Metro Vancouver and other parts of the province. Here is a sample of the requests we heard:
“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. 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.” (Rachel Simpson, Emily Carr Students Union, Coquitlam hearing)
“Currently, our members pay $73 a month or more, depending on which zone they live in, for access to TransLink services, while their counterparts in other institutions pay between $23.75 (at UBC) and $38 (at Langara)…. We are asking the B.C. government to intervene to impel TransLink to implement a standard U-pass for all students in Metro Vancouver and, moreover, substantiate its own stated commitment to its cause by assisting in the funding of the U-pass program.” (Vijaya Krishnan, Students’ Unions of Vancouver Community College, Sept. 29 Vancouver hearing)
“One of the things we’re hearing from students across the province, not just at our institution, is difficulty accessing transit services. At our institution we don’t yet have a U-pass.” (Steve Beasley, Vancouver Island University Students Union, Courtenay hearing)
Committee Decision
The Finance Committee agrees with students that accessible transit services are an important spending priority and we urge government to consider facilitating the implementation of a standard U-pass, bearing in mind the regional differences in transit services.
The Finance Committee recommends that the provincial government consider:
The Finance Committee received numerous submissions from around the province relating to social development. Some related to housing and child care; and others made pleas for additional services for our most vulnerable citizens: children and adults with special needs, people receiving disability benefits and income assistance recipients.
During the public consultations, the need for housing across the province emerged as a significant issue. We heard from a number of communities that investments are needed to address the issue of housing for homeless people and to expand the stock of affordable market-rental housing. We also received submissions regarding the current rent supplement programs, which witnesses suggested could be enhanced to benefit more British Columbians.
Housing for homeless people
As the problem of homelessness has spread around the province, many submissions recognized that all levels of government need to be involved in the solution to this problem, and proposed ways to tackle the issue. Here is what they had to say:
“Housing First initiatives to deal with homelessness are going to be a priority for our city moving forward. Partnerships will be necessary to spur affordable housing development downtown.” (Tim McEwan, Initiatives Prince George, Prince George hearing)
“We urge the government to continue to provide more affordable housing and to work with the city of Kelowna to determine a strategy to end homelessness.” (Kelowna Chamber of Commerce, Penticton hearing)
“There is not enough supported housing available for even the lowest estimate of the number of homeless individuals. We applaud the steps taken to reduce homelessness in Budget 2008 and recommend that this funding…be continued and enhanced with an emphasis on community-based supportive housing (est. overall cost saving of about $211 million a year).” (Bill Wright, Canadian Mental Health Association, Sept. 29 Vancouver hearing)
“We provide transitional housing in two leased homes and an integrated day program for residents and graduates.... We respectfully request the Committee to highlight that our successful social housing project deserves support of the provincial government, pending the emergence of sustainable funding from the federal government.” (Anne Spilker, Willow WAI and Gordon Cote, NARSF Programs, Ltd, Nanaimo, WS256)
“It would be good to assist the local municipalities to build and maintain shelters for the homeless where they could receive some counselling, food and a semi-permanent place so they could get back on their feet and find work.” (Fiona Hoey, Abbotsford, Survey1051)
Committee Decision
The Finance Committee believes that partnerships with communities are an effective way to expand the supply of supportive housing for people who are homeless.
Market-rental housing
Affordable market-rental housing has become an issue around the province, as many areas are facing low vacancy rates and high rents. Organizations representing refugees and individual citizens all asked the government to consider recommending ways to encourage the construction of more affordable market-rental housing. Here is a sample of the requests:
“Refugees have a lot to contribute to Canadian society but they need extra supports; that starts with housing first.” (Jenny Francis, Sept. 29 Vancouver hearing)
“Require that every new construction have at least one rental, and provide incentives to have more rental housing in existing buildings.” (Heidi Calzavara, Abbotsford, Flyer903)
“I urge government to fund social housing in Fernie so that residents have housing options. Currently Fernie has a zero percent rental market.” (Andrea Goertzen, Cranbrook hearing)
Committee Decision
The Finance Committee agrees that housing is a priority investment for the province in 2009. We encourage the provincial government to actively work with municipalities and the federal government to increase the stock of affordable market-rental housing.
Rent supplement programs
Many concerns were raised in oral presentations, written submissions, online surveys and household flyers about the availability of housing for low-income families. The Finance Committee learned that currently families receiving income assistance are not eligible for the rental assistance program, which provides working families earning up to $35,000 with financial assistance to help with their rent payments. Here is a sample of the pleas we received:
“One of the problems is that if you’re on income assistance, you’re not eligible for programs such as the rental assistance program. So that’s a real problem because a lot of the people who are living in the deepest form of poverty do not have access to this.” (Julie Norton, First Call: BC Child and Youth Advocacy Coalition, Sept. 15 Vancouver hearing)
“Our housing recommendations this year include a plea for more rent supplements. In more than 50 instances in 2008, B.C. Housing has come to the rescue in greater Victoria and topped up the income assistance shelter allowances with additional funds so that homeless individuals could be offered accommodation at closer to market rents. We believe more funding in this program needs to be made available.” (Tony Joe, Victoria Real Estate Board, Langford hearing)
This year, the Finance Committee also received requests from seniors to expand the Shelter Aid For Elderly Renters (SAFER) program, which provides monthly rent supplements to B.C. seniors over the age of 60 living in market-rental housing. Here is a sample of their submissions:
“My recommendation is that the next budget increases the shelter aid for elderly renters, the SAFER grants, to accurately reflect the cost of rental accommodation for seniors in 2009. Right here in the Comox Valley, I know a number of seniors whose rent has increased by $350 in the last three years. The SAFER grant hasn’t kept pace with that.” (Cliff Boldt, Courtenay hearing)
“In my work as a volunteer seniors’ advocate in 2006 and 2007, I found a large number of my clients’ problems stem from poverty. I had the classic client, who had to choose between proper diet, medication and paying the rent. This Committee should recommend raising the provincial seniors’ supplement, significant improvement in free access to legal aid and going all out to build subsidized housing.” (Don Startin, Greater Victoria Seniors Branch 191, Langford hearing)
“I would like to see someone put in charge of the SAFER program. Despite the huge increase in rental rates since this was last increased, it seems to have been ignored.” (Helen Fenton, Victoria, WS70)
Committee Decisions
The Finance Committee recognizes that many British Columbians living on low incomes are facing increased costs, especially in terms of the current housing market. We therefore suggest that the province expand eligibility for the Rental Assistance Program to people receiving income assistance and increase rent supplements available to seniors under the SAFER program.
At the public hearings, a number of community agencies and advocates made presentations to the Finance Committee, requesting investments in child care. This request was supported by a number of on-line flyer and survey responses from individuals throughout the province. Here are some of the comments we received:
“The lack of daycare results in children being put in substandard child care options where safety and learning are compromised. For an agency that works with children at risk, we are keenly aware that the lack of daycare is a significant stress for struggling parents and has direct health and social repercussions on the children.” (Paula Pierre, Nechako Valley Community Services Society, Prince George hearing)
“As a licensed child care operator, we call for an increase in operating funds. We believe child care is fundamental to a prosperous economy and this service contributes to strengthening the fabric of our communities.” (Stephanie Fischer, Kootenay Kids Society, Nelson hearing)
“The establishment of a universal, accessible and affordable early childhood care and education system would address health, economics and education, and increase positive outcomes for children and families in the province. The current lack of quality and affordable child care is undermining access to work and education for parents and undermining healthy child development for children.” (June Maynard, North Vancouver, Survey520)
“Support working families by delivering a strategic child care strategy.” (Susan Murphy, Canadian Federation of University Women, British Columbia Council, WS177)
Committee Decision
As in previous years, the Finance Committee encourages government to complete an inventory of the waitlists for child care spaces and take action to meet the demand.
The Finance Committee heard from a number of service providers, as well as parents, who advocated for increased funding for specialized services for children with special needs. This included improved transitional planning for children with special needs in order that they continue to receive supports once they turn 19. Below are some of the requests received:
“Our primary recommendation to the Committee is for you to repeat, as in 2006 and 2007, your strong recommendation to increase our funding for services to eradicate our waitlist by 2010…. As you know, every dollar invested today in a child under six years old will result in a lot of savings in the future.” (Jean-Marc Jaquier, Nanaimo Child Development Centre Society, Courtenay hearing)
“Quite often, adolescents or young adults with disabilities have a level of service that’s provided to them as children. When the calendar turns to 19, those services are no longer available to them. The transitional planning is just so key to be able to provide a constant level of support for these individuals.” (Shannon Moyle, High Road Services Society, Smithers hearing)
“We already have assessment and research facilities. What we don’t have is enough funding to access much-needed services. Families are disintegrating while waiting for services.” (Carol Simpson, Sept. 29 Vancouver hearing)
Committee Decision
The Finance Committee asks government to examine the current funding model for child development centres to ensure adequate assessment services are available for children with special needs and that services remain in place during their transition into adulthood.
The Committee also received numerous requests from community-based agencies, as well as a number of individuals, seeking additional funding for Community Living BC (CLBC) to improve the delivery of services for adults with developmental disabilities. The main concerns presented were that waitlists need to be reduced and the IQ-based eligibility criterion for services revised. Here are some of the submissions we received on this topic:
“It’s no secret today to the families or to those working in the field with adults with developmental disabilities that Community Living BC is seriously under-funded and is lacking the ability to meet the needs for support and services for many individuals already in care and on wait-lists.” (Marni Davis, L’Arche Greater Vancouver, Coquitlam hearing)
“There are huge wait-lists for services for people with developmental disabilities through the CLBC program; it needs substantial funding increases to meet the needs of people with disabilities.” (Layne Hammond, Campbell River, Flyer603)
“We need additional funding here in the north to be able to provide services for individuals with developmental disabilities at levels comparable to the rest of the province.” (Shannon Moyle, High Road Services Society, Smithers hearing)
“To have an individual come and either be provided services or have services denied [based] on one IQ point – you can imagine that can be quite devastating to families. The real issue is not about IQ. We feel strongly that there should be a functional assessment part of that criterion. A functional assessment would give you a clearer idea of what an individual’s abilities are now and also what the possibilities are.” (Annette Delaplace, BC Association for Community Living, Sept. 15 Vancouver hearing)
“Reverse the decision to cut funding to adults with disabilities based on an IQ over 70.” (James and Joanne Drummond, Surrey, Flyer27)
Committee Decision
The Finance Committee agrees that adults with developmental disabilities and their families should be able to access the necessary services, and encourages government to ensure that sufficient resources are available to provide these services. We also believe the current 70-IQ eligibility criterion for receiving services needs to be replaced by a functional assessment.
Earnings Exemption
The Finance Committee heard a number of concerns regarding the difficulties people on income assistance encounter because of existing rules regarding earnings from part-time employment. These submissions called for a change to the earnings exemption to make a difference in the quality of life for income assistance recipients. Here are some of the comments on this topic:
“The highest marginal tax rate is actually 100 percent, and it is paid by the poorest in our society. If a person on social assistance manages to get a part-time job, for every dollar they earn, their social assistance is reduced by a dollar. In effect, their marginal tax rate is 100 percent. My suggestion to the Committee is that the rules about earning income while on social assistance must be changed so that this disincentive is eliminated; it would be a money-saver for the government, and it would go some way to reducing poverty in British Columbia.” (Dominique Roelants, Malaspina Faculty Association, Langford hearing)
“Restore earnings exemptions to income assistance.” (Adrienne Montani, First Call: BC Child and Youth Advocacy Coalition, Sept. 15 Vancouver hearing)
“Raise the basic payment under social assistance and also the amount that each person can earn; people would spend what they get.” (J. Elinor Branter, Victoria, Flyer880)
“Reinstate the income assistance policy regarding the allowance of a small amount of income before it is deducted from cheques. As it is now, there’s no incentive to obtain a part-time job.” (Diane Nickerson, Nanaimo, Flyer072)
Shelter allowance
A number of individuals and organizations, representing disabled people and income assistance recipients, asked the Finance Committee to consider raising the shelter allowance for income assistance recipients and people receiving disability benefits. Here are some of their requests:
“Housing is expensive, and it’s scarce. For individuals on income assistance, the shelter maximum for a single individual is $375 a month, and for a four-unit family, the maximum is $700 a month. These amounts do not match the real cost of housing in the province, even in smaller communities. In addition, the vacancy rates are generally so low province-wide that it is difficult to obtain any housing at all. We therefore recommend that the real market costs of housing be linked to income assistance rates.” (Bill Wright, Canadian Mental Health Association – B.C. Division, Sept. 29 Vancouver hearing)
“The shelter amount should be tied to rent and utilities increases.” (Ruth Montaldi, Langford hearing)
“Increase the monthly rent allowance for persons with disabilities.” (Carol Simpson, Sept. 29 Vancouver hearing)
“Poverty is an issue amongst the disabled population. The shelter rate of $375 per month is just not enough. Increases to shelter amounts would help offset the need to spend grocery monies on rent.” (Shannon Moyle, High Road Services Society, Smithers hearing)
“As an individual with Asperger’s Syndrome, I would like to see an increase in the shelter allowance for PWDs closer to the $700 average rent.” (Richard Mark, Kelowna, WS112)
Committee Decisions
The Finance Committee recognizes that those British Columbians living on low incomes are finding it difficult to support themselves and their families. We therefore suggest that government consider changing the earnings-exemption rule and providing increased support for shelter for our most vulnerable citizens: income assistance recipients and people with disabilities.
The Finance Committee recommends that the provincial government consider:
Q.3 Government has now reduced its debt from government operations to a level not seen since 1991. How should we invest the savings from lower interest payments on the reduced operating debt?
The Finance Committee received a variety of answers to Question 3 regarding the reallocation of savings from lower interest payments on the reduced operating debt. Submissions ranged from those expressing strong support for continued debt reduction, to those in favour of spending all or some of the savings on infrastructure or program spending, which we have covered under Question 2. Other individuals and organizations recommended dividing the savings between debt repayment and spending. Here is an example of the variety of comments we received from the public:
“The Board recommends that the government continue to apply unanticipated surpluses to reduce taxpayer-supported debt. Within this parameter, however, we support reasonable increases in absolute debt levels to fund much needed infrastructure investment to contribute to economic growth and provincial competitiveness.” (Bernard Magnan, Vancouver Board of Trade, Sept. 15 Vancouver hearing)
“The Business Council recommends keeping the operating budget balanced and ensuring that the net or taxpayer-supported debt, measured as a share of GDP, remains among the lowest in Canada. We also believe it is important that government maintain its current capital spending program.” (Jock Finlayson, Business Council of British Columbia, Sept. 29 Vancouver hearing)
“If there is a surplus, as forecast, at the end of this budget cycle, it would be preferable to spend funds rather than pay down the debt considering the deteriorating economic conditions. The savings from debt reduction already achieved should be spent on infrastructure and education, because the skills shortage continues to be a priority for business.” (Barbara Tinson, Richmond Chamber of Commerce, WS258)
“The government should continue to pay down the debt so that even more savings are accrued in the future. Investments in the programs outlined above would also be useful.” (Rod Stirling, Vancouver, Survey1076)
Committee Decision
While we are sympathetic to pleas for targeting the savings for debt reduction, the Finance Committee believes there is a more pressing need to accelerate capital spending. Investment in the province’s infrastructure is the best and fastest way to use public funds to help British Columbia avoid the effects of a global economic recession. Therefore, we ask the provincial government to consider increasing capital spending for the foreseeable future, and returning to debt reduction when the fiscal situation improves – without increasing the debt on the operating budget.
Since British Columbians’ program spending priorities were discussed under Question 2, this section of the report focuses on their capital-spending requests, for both physical and social infrastructure investments.
Transmission infrastructure
During the budget consultations the Finance Committee received submissions requesting the electrification of Highway 37 in order to encourage the mining industry in the northern part of the province. Here is a sample of their views:
“Highway 37 electrification would catalyze new mine development in the north region, which could create 2,000 jobs and provide provincial tax revenue of over $75 million.” (Tim McEwan, Initiatives Prince George, Prince George hearing)
“We look to the province to bring stakeholders to the table and to assist the mining sector by supporting the electrification of Highway 37; it’s a number one priority.” (Michael Mehr, Smithers hearing)
“Improve infrastructure and geological information in northern B.C. to encourage mineral development.” (Ken and Angie Norman, Courtenay, Flyer492)
Committee Decision
The Finance Committee agrees that the electrification of Highway 37 is an important project, and encourages government to continue to do the preliminary work, such as environmental assessments, and to move forward with the project when economically feasible.
The Finance Committee received many submissions asking for more investment in transportation infrastructure throughout the province. Some of the specific suggestions we received were:
“Further funding support is required for the Boundary Road link, which would connect Highway 97 south to Highway 16 east, and which has a critical regional importance by virtue of connecting the BCR yard and inland port to the provincial highway and international airport.” (Councillor Don Zurowski, City of Prince George, Prince George hearing)
“The City of Abbotsford is the only municipality in the lower mainland that has five points of entry on Highway 1. Yet, as one of the fastest-growing municipalities, we have been woefully left behind with highway improvements and egress into and out of our city.” (Councillor Bruce Beck, City of Abbotsford, Abbotsford hearing)
“We’d like to make Highway 3 a safer place for locals and visitors alike, an improvement we see as the most important consideration for the economic feasibility of our resort town.” (Tammy Monsell, Fernie Real Estate Co., Cranbrook hearing)
“The sum of $250,000 is requested to be allocated in the 2009/10 budget to make a long-established public highway safer for travel. The funds will be used to provide needed maintenance on the 25 km section east of Piebiter Creek on the Bridge River Road extension along McGilivray Creek one-lane dirt public road/trail to Anderson Lake (est. cost: 25 km x $10,000 per km).” (Bill Pekonen, DAW Holdings Ltd., Richmond WS279)
“The BCCC recommends that the province accelerate investment in cycling infrastructure as part of its commitment to address the economic slowdown.” (Richard Campbell, British Columbia Cycling Coalition, Vancouver WS295)
One project that received significant support from residents of southern Vancouver Island was investment in railway infrastructure to move people and freight up and down the Island, and for commuter rail service from the Western Communities to Victoria. Here is a sample of what we heard:
“We have support from all of the 14 municipalities; five regional districts; first nations; business organizations; tourism organizations; elected individuals at the local, regional, provincial and federal levels. We think this is a good idea, and we think the time for rail renewal on Vancouver Island has come again.” (Doug Backhouse, Island Corridor Foundation, Langford hearing)
“Vancouver Island, and specifically southern Vancouver Island, is in urgent need of a viable, clean, healthy transportation system, and we’re looking to the province to take a leadership role in addressing this. We urge the government to support commuter train service between Langford and Victoria, and also the larger Island Corridor Foundation rail initiative, by providing financial support for infrastructure and operations.” (Geoff Pearce, Communities for Commuter Rail, Langford hearing)
“The increased gas tax money specified for environmentally friendly transit in 2010 could connect Victoria with Nanaimo by heavily subsidized, frequent, high-speed electric rail.” (Jeremy Watney, Victoria WS032)
“The Island rail corridor needs to be upgraded. Decent passenger and freight service along the Island’s rail network would be a great way to remove traffic from the Island Highway and give people an efficient and green means of travel up and down the Island.” (Devon Drury, Victoria, Survey1423)
Another issue that received widespread support from across the province was expansion of public transit. Those areas that have public transit requested expansion of the service, while rural areas wanted the opportunity to access public transit. Here is a sample of the submissions received:
“We encourage the B.C. government to stay the course on its infrastructure programs. We are concerned, however, that Surrey and the whole south Fraser region, growing at such a dramatic rate, is seriously under-served by transit services, and we ask that the provincial government ensure that appropriate and balanced transit services are provided in this region.” (Eric Wilson, Surrey Board of Trade, Surrey hearing)
“We would like to launch a bus service that could be utilized by anyone needing regular transportation to Vanderhoof because a lot of the services are in Vanderhoof. The transportation would be free and available for any reason. The families can go to shop, go to the library, go to get groceries – anything.” (Paula Pierre, Nechako Valley Community Services Society, Prince George hearing)
“The Kelowna Chamber of Commerce urges the provincial government to support the initiatives of the city of Kelowna to develop a long-term transit vision for the region that will provide frequent, rapid and reliable limited-stop transit service linking the majority of town centres in Kelowna.” (James Paterson, Kelowna Chamber of Commerce, Penticton hearing)
“Use the money to invest in public transit – that will create jobs, reduce pollution and reduce your investment in expensive road infrastructure.” (Luc Girard, Richmond, Survey549)
“In the west Chilcotin there is no transit service at all, and cutbacks have created washboard roads.” (Cherylyn Morrison, Nimpo Lake, Flyer868)
The Finance Committee also heard a presentation from the British Columbia Construction Association suggesting improvements to the construction tendering process:
“BCCA recommends that government ensure sufficient resources are provided to the appropriate ministries to enable them to act quickly and expeditiously to ensure that the principles of transparency and fairness including the use of standard tendering documents are imbedded and demonstrated in all tendering procedures funded through public monies.” (Manley McLachlan, B.C. Construction Association, Langford hearing)
Committee Decisions
The Finance Committee agrees with the witnesses that these are important projects, and we therefore urge the government to consider continuing to invest in strategic transportation infrastructure in all regions of B.C.; to expand public transit infrastructure province-wide; and to invest with other partners in rail infrastructure on Vancouver Island. Finally, we urge government to consider standardizing construction processes for all physical infrastructure projects in B.C.
This year, the Finance Committee also received a number of requests for funding for a variety of social infrastructure projects, including health facilities and education facilities, arts and cultural centres, recreational facilities and community centres. Some of the specific requests we received are captured below:
“It is imperative, we believe, that the province make additional funds available for hospital replacements in regional hospital districts that have reached or exceeded their fiscal capacity because of high costs combined with a low tax base and deteriorating economic conditions.” (Hans Berndorff, Stuart-Nechako Regional Hospital District, Smithers hearing)
“Prince George is facing a labour shortage, and in order to recruit and retain skilled labour, full urban amenities are must-haves. A performing arts centre would complete the city's suite of urban amenities. It would also assist the city to become a cultural tourism destination and be a catalyst for downtown revitalization. The development would follow the smart-growth principles of mixed use, pedestrian friendliness. A gathering place would be created for the centralization of performing arts.” (Councillor Don Zurowski, City of Prince George, Prince George hearing)
“We are suggesting that there may well be a place for a truly collaborative venture between Fraser Health, SFU, Kwantlen and, perhaps, other institutions of higher education that would allow for the construction of a teaching facility for medicine, nursing and other allied health sciences.” (Dr. David Atkinson, Kwantlen Polytechnic University, Surrey hearing)
“Adequate funds to maintain a modest permanent physical location with convenient parking would hugely affect our effectiveness and continuity.” (Keith Harris, Victoria Men’s Centre, Langford hearing)
Committee Decisions
The Finance Committee agrees that social infrastructure is a vital part of community life, and we therefore urge the government to continue investing in the construction of health and educational facilities, including seismic upgrading of schools. We further request that government continue to work with the federal government to ensure ongoing funding for community-driven infrastructure projects through the Building Canada fund.
The Finance Committee recommends that the provincial government consider:
Q.4 What other measures would you like to see in budget 2009?
The Finance Committee received numerous suggestions for other measures in the 2009 budget from witnesses, many of them in the on-line surveys and household flyers. Their proposals covered a range of topics: provincial-federal matters, provincial-municipal issues, regional health authorities and Crown agencies. The Finance Committee also received suggestions for regarding government services and provincial legislation.
A number of issues raised in this section touched on a broad spectrum of provincial-federal matters. They included the cattle insurance program, foreign credentials recognition, Francophone services, the labour market development agreement and First Nations land claim settlements. They also covered the RRSP-type medical investment fund, species-at-risk legislation and tax-deductible mortgages. Below are examples of how people framed their requests:
“I know that British Columbia is not a bilingual province, but the services that we get [in French] are essential for us, and it's another of my big concerns.” (Diane Dessureault, Association des Francophones et Francophiles du Nord-Ouest, Kitimat hearing)
“Many community-based employment agencies, their boards and staff are hopeful of a seamless continuation of employment services in all communities under the LMDA.” (Norma Strachan, Association of Service Providers for Employability and Career Training, Victoria, WS151)
“Set up an RRSP-eligible B.C. medical investment fund where my wife and I could invest part of our RRSP investments in government-guaranteed medical services investments – restricted to hospitals, medical clinics, and extended care homes and similar assets (e.g., support facilities) – with a provincial income-tax-trust tax exemption for earnings and distributions.” (John Berwick, Richmond, WS095)
“I recommend allowing the interest paid on the mortgage of a primary residence to be tax-deductible (or if this is too expensive, a portion of it). This would enable young families to own a home more easily and send a strong, pro-family statement from the government to the populace.” (Sean Dyble, Victoria, WS039)
Submissions on this topic covered a variety of provincial-municipal issues. They included a number of calls for relief on property taxes, particularly from survey and flyer responses. They also covered local government tendering processes, municipal revenue-sharing programs, project funding criteria, protective services funding and tax-free municipal bonds. Here are some of the requests we heard and read:
“Significant yearly increases in property tax assessments present challenges to businesses and communities remaining competitive with another jurisdiction — namely Ontario, which has moved to a four-year property assessment system. We urge the provincial government to introduce changes to the B.C. Assessment Act in order to enhance fairness and predictability of assessments to property owners while continuing to value properties on a regular basis and enable the municipalities to rely upon a stable source of revenue to fund important public services.” (James Paterson, Kelowna Chamber of Commerce, Penticton hearing)
“Reduce property taxes for those owning what has become highly-desirable recreational or retirement land; “grandfather” so people don’t have to move.” (Joyce Beck, Kamloops, Flyer092)
“We request that the province take steps in its upcoming budget to address the municipal fiscal imbalance by reinstating a revenue-sharing program with local governments.” (Councillor Murry Krause, North Central Municipal Association, WS213)
“We feel that improvements to the funding process could be made. We recommend extending funding application and project completion deadlines. We ask the province for a timely response to applications.” (Mayor Len Fox, District of Vanderhoof, Prince George hearing)
“We request that the province redirect the 4 percent insurance premium tax for distribution to local governments through UBCM to help defray the continually increasing costs of fire protection provincially. We also ask the province to allocate adequate operational funding for search and rescue, so that volunteers can be fully reimbursed for training costs incurred.” (Councillor Murry Krause, North Central Municipal Association, WS213)
“Issue tax-free municipal bonds to fund various projects in the province.” (Ron Beer, Peachland, WS278)
A number of submissions raised concerns about the cleanliness and quality of food in health care facilities, and a few included comments on administration. Here are some of the responses we read:
“Train hospital cleaners and food preparers in order to achieve the high standards of the past.” (Kathy Wilcox, Victoria, Flyer412)
“In the regional health authorities, invest in front-line health workers.” (John and Katherine Konrad, Abbotsford, WS083)
“When budgeting for South Okanagan mental health department, will you please ensure that this money goes towards the mental health and not to hire more people who do not know what they are doing? Please look at the administration in Penticton very carefully.” (Michael and Dorothy Taylor, Oliver, WS163)
“Investigate the spending of the health authorities; it seems rather top-heavy to me.” (J. Lowood, Duncan, Flyer231)
Concerns about rate increases and the Smart Meters program were raised under B.C. Hydro. The B.C. Lottery Corporation’s gaming enforcement and revenues were noted and also its monopoly position on gaming in B.C. Other responses were submitted about the Insurance Corporation of B.C.’s monopoly position and lack of competition, as well as administration of vehicle licence plates, vehicle registration, premium levels and transferable insurance premiums:
“COPE 378 recognizes the need for electricity pricing to be realistic. However, the rate increases documented in the 2008 budget are extreme…. Also, with BC Hydro so quickly approaching the threshold of ‘rate shock,’ COPE 378 would recommend that the Smart Meters program be put on hold immediately pending the presentation of a comprehensive business case and cost-benefit analysis.” (Mike Bruce, Canadian Office and Professional Employees, Local 378, Burnaby, WS287)
“Remove the ICBC and BC Lottery Corporation monopolies to allow for competition….” (Jonathan Sevy, Penticton, Survey1258)
“U.K. citizens, with an accident-free driving record, have to re-sit their theory and practical driving test on arrival in Canada. This is simply a revenue-earner for ICBC. Also, my U.K. no-claims discount should be fully transferable to Canada so I don’t have to pay over ten times more. Stop the ICBC monopoly on car insurance.” (Dr. Kelvin Brown, West Vancouver, WS302)
“Stop purchasing license plates for the front of motor vehicles, like Alberta and Saskatchewan have done, and save around $250,000 per year. This money can be used to fund health and social services.” (George W. Latowski, Delta, WS121)
The Finance Committee received a number of suggestions on how to improve government services. These requests included funding project criteria, public sector reform and website access for visually-impaired people. Here is a sample of the input we received:
“I feel that it's unfortunate from the perspective of the entity and not in the best interests of the funder, the Province, that it seems we are required to disguise the reality of our workload. So I would like to recommend — with regard to this particular entity and other such entities, when the truth is that the workload is much more heavy and demanding and complex than the statistical protocol permits to be conveyed — that there be greater honesty. I honestly feel that it would be in the best interests of both sides of the equation.” (Donald MacKenzie, ARA - Mental Health Action Research and Advocacy Association of Greater Vancouver, Sept. 29 Vancouver hearing)
“I recommend the government websites are suited for visually impaired people.” (Ken Westlake, Kelowna, WS004)
A number of suggestions to the Finance Committee for other measures focused on changes to legislation or regulations, including a request for the regulation of Internet gaming in the province. These legislative changes are summarized below:
“If the government were to act to protect registered plans, there would be no cost to government – no additional bureaucracy or government services required, no burden on taxpayers and no additional red tape.” (Miriam Maisonville, Canadian Bar Association – British Columbia Branch, Sept 15 Vancouver hearing)
“In Canada, the regulation of employment pension plans is primarily a provincial responsibility. Many in the pension industry have concerns about the pension legislation that we have and the need to update it. Some of the requirements of the current legislation are particularly onerous and have been blamed for the decline in pension plan coverage.” (Harry Satanove, Satanove and Flood Consulting, Surrey hearing)
“Change the Forest Act to remove the requirement for companies to pay stumpage on rotting logs suitable for pulp or firewood.” (Douglas A. Millar, Campbell River, WS043)
“We recommend that earthquakes be included in the list of permissible exclusions relating to the peril of fire in section 28.4(1) of the Insurance Amendment Act and ask government not to proceed with section 28.4 of Bill 40.” (Lindsay Olson, Insurance Bureau of Canada, Burnaby hearing)
“We request a change to the Law and Equity Act in order to enable British Columbians to roll over the proceeds of the new federal tax-free savings accounts through beneficiary designations to spouses as is a standard benefit of RRSPs and RRIFs.” (Joanne De Laurentiis, Investment Funds Institute of Canada, Toronto, WS255)
“Government should amend the Property Transfer Tax Act to ensure PTT is applied on land contract price, rather than at the time of closing.” (John Friswell, Greater Vancouver Home Builders’ Association, Surrey, WS170)
“Improve the rules and regulations for the Public Guardian and Trustee of B.C.” (Heather Carrell, North Vancouver, Flyer147)
“Even though there’s been a considerable amount of experience over ten years, particularly with the many new construction developments we’ve had in the province, there hasn’t been any change of any significance to the Strata Property Act.” (Deryk Norton, Vancouver Island Strata Owners Association, Langford hearing)
“There should be a public authority similar to the Residential Tenancy Office to advise condo owners on governance issues.” (L.M. Murray, Vancouver, Survey1316)
From the Finance Committee’s perspective, revisions to the Strata Property Act are the most pressing. Therefore, we recommend that the provincial government consider:
Tax policy
The Finance Committee recommends that the provincial government consider:
Environmental protection
Economic competitiveness
Community development
Health care
K-12 and post-secondary education
Social development
Capital spending
Other measures
© 2008 Legislative Assembly of British Columbia