2010 Legislative Session: Second Session, 39th Parliament
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
MINUTES AND HANSARD
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
Tuesday, September 28, 2010
Aava Hotel Whistler, Whistler, B.C.
Present: John Les, MLA (Chair); Doug Donaldson, MLA (Deputy Chair); Norm Letnick, MLA; Don McRae, MLA; Michelle Mungall, MLA; Bruce Ralston, MLA; Bill Routley, MLA; John Rustad, MLA; Jane Thornthwaite, MLA;
John van Dongen, MLA
1. The Chair called the Committee to order at 1:01 p.m.
2. Opening statements by John Les, MLA, Chair.
3. The following witnesses appeared before the Committee and answered questions:
1) B.C. Wildlife Federation
2) British Columbia Real Estate Association
3) Terasen Inc. and FortisBC
4) Canadian Renewable Fuels Association
5) Canadian Media Production Association – BC Producers' Branch
6) Sport BC
7) Alma Mater Society of UBC Vancouver
8) Building Owners and Managers Association - B.C.
9) Assembly of British Columbia Arts Councils
10) B.C. Association of Farmers' Markets
11) Canadian Sport Centre Pacific
4. The Committee adjourned at 3:51 p.m. to the call of the Chair.
The following electronic version is for informational purposes only.
The printed version remains the official version.
REPORT OF PROCEEDINGS
select standing committee on
Finance and Government Services
Tuesday, September 28, 2010
Issue No. 28
* John Les (Chilliwack L)
* Doug Donaldson (Stikine NDP)
* Norm Letnick (Kelowna–Lake Country L)
* Don McRae (Comox Valley L)
* John Rustad (Nechako Lakes L)
* Jane Thornthwaite (North Vancouver–Seymour L)
* John van Dongen (Abbotsford South L)
* Michelle Mungall (Nelson-Creston NDP)
* Bruce Ralston (Surrey-Whalley NDP)
* Bill Routley (Cowichan Valley NDP)
* denotes member present
Vicki Huntington (Delta South IND.)
Mark Andersen (British Columbia Real Estate Association)
Jon Bell (B.C. Association of Farmers Markets)
Rob Bromley (Chair, Canadian Media Production Association, B.C. Producers Branch)
Tim Gayda (President and CEO, Sport B.C.)
Doug Hooper (Chair, Canadian Renewable Fuels Association)
Paul LaBranche (Building Owners and Managers Association B.C.)
Patti MacAhonic (Executive Director, B.C. Wildlife Federation)
Jeremy McElroy (Alma Mater Society of UBC Vancouver)
Norma Miller (British Columbia Real Estate Association)
Cameron Muir (British Columbia Real Estate Association)
Wendy Pattenden (CEO, Canadian Sport Centre Pacific)
Elizabeth Quinn (B.C. Association of Farmers Markets)
Joan Richoz (President, Assembly of British Columbia Arts Councils)
Liz Shorten (Canadian Media Production Association, B.C. Producers Branch)
Douglas Stout (Terasen Inc.; FortisBC Inc.)
Catherine Winckler (Canadian Media Production Association, B.C. Producers Branch)
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TUESDAY, SEPTEMBER 28, 2010
The committee met at 1:01 p.m.
[J. Les in the chair.]
J. Les (Chair): Good afternoon, everyone. I'm John Les, MLA for Chilliwack and the Chair of this parliamentary committee. I'd like to welcome everyone who is here this afternoon and thank them all for taking the time to participate in this important process.
Every year in preparation for the oncoming year's budget, the Minister of Finance releases a budget consultation paper by September 15. This paper presents a current fiscal forecast, and it identifies key issues that need to be addressed in the next budget. The paper provides a focus for the consultations of this committee, and it includes information on how members of the public may provide their views on budget priorities. Copies of the consultation paper are available on the information table in the room today.
The Select Standing Committee on Finance and Government Services is the parliamentary committee that is responsible for conducting public consultations on the forthcoming provincial budget. Our committee is required to report back to the Legislative Assembly no later than November 15 of this year. We will be holding 14 public hearings in each region of the province as well as three scheduled video conferencing sessions to hear from some of the more rural communities of the province.
In addition to public hearings, there are a variety of other ways that British Columbians can share their views with us. We accept written submissions by letter or e-mail and also video and audio files. Further information on how people may participate is available on the committee website.
Committee members carefully consider all of the public input that we receive, whether it's by oral presentation made here today; on an on-line survey form that's available; a submission in writing; or, as I mentioned earlier, audio or video clips. Our deadline, however, to receive submissions is Friday, October 15.
At today's meeting each presenter may speak for ten minutes, with up to an additional five minutes allocated for members' questions. Time permitting, there may also be an open-mike session at the end of the hearing, with five minutes allocated for each presentation.
Today's meeting is a public meeting. It'll be recorded and transcribed by Hansard Services. A copy of the transcript, along with minutes of the meeting, will be printed and made available on the committees website.
In addition to the meeting transcript, a live audio webcast of this meeting is also produced and available on the committees website to enable interested listeners to hear the proceedings as they occur. An archived copy of the audio broadcast will also be retained on the committees website.
At this point I'll ask other members of the Finance Committee to introduce themselves, starting with Bill.
B. Routley: Bill Routley, MLA for Cowichan Valley.
M. Mungall: Michelle Mungall, MLA for Nelson-Creston.
B. Ralston: Bruce Ralston, Surrey-Whalley.
D. Donaldson (Deputy Chair): Doug Donaldson, MLA, Stikine, which I know you know where it is, and Deputy Chair of the committee.
J. van Dongen: John van Dongen, Abbotsford South.
J. Rustad: John Rustad, Nechako Lakes.
N. Letnick: Norm Letnick, Kelowna–Lake Country.
D. McRae: Don McRae, MLA, Comox Valley.
J. Les (Chair): Also joining us today, I'm pleased to introduce our Clerk, Kate Ryan-Lloyd, sitting immediately to my right, and our Hansard Services staff, Michael Baer and Jean Medland, who are here to record and prepare the written transcript of today's meeting.
With those formalities out of the way, I'd now like to call our first witness, Patti MacAhonic from the B.C. Wildlife Federation.
Good afternoon. Always good to see another person from the Chilliwack area.
P. MacAhonic: Good afternoon, and thank you for having the B.C. Wildlife Federation present. We appreciate the opportunity.
I'd like to start out by asking: does anyone here at this table come from a hunting or fishing family background? So a few of you.
Hunting and fishing and conservation are traditions for most B.C.'ers. We're the oldest and largest conservation organization in the province.
Just a point of interest. We have been in an extremely fast period of growth. In the 2009 fiscal we had a 25 percent increase in our direct members, which are individual members, and a 19 percent increase in our club members. It says 38,000, but I think we're close to 40,000, and by 2012 I'm quite confident we will be at the 50,000 mark. So big growth for our organization, and we plan on continuing that. People are interested in what is happening to our natural resources, our fish and wildlife.
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I'm just going to read a little from our executive summary. We've considered ourselves to be a key partner in achieving the Ministry of Environment's goals and are recognized as such with stakeholders provincewide. We also believe that with the surcharge user-pay funding formula implemented following the government's core review in 2001, contributors should be directly involved in setting expenditure priorities. It is critical to note that it is the hunter and the angler who pay the greatest share of the cost for all fisheries and wildlife resource management.
The B.C. Wildlife Federation also recognizes that as government ministries and programs become more complex and interconnected, the B.C. Wildlife Federation can be an effective partner, working with government as a whole and especially with those ministries with a direct connection to the goals of our organization.
Through our history and under various names, British Columbia's fish and wildlife agency has been among the most understaffed and underfunded of the fish and wildlife agencies in North America. We recognize the significant potential for the province's fisheries and wildlife resources to contribute to the regional economic development and believe that government is moving towards recognition of this key fact in their work as well.
The B.C. Wildlife Federation would encourage government to look further in its views regarding revenues. The government has always regarded licence and tag fees as the only revenue generated by fish and wildlife, not taking into account the revenue generated by anglers and hunters who spend on everything from vehicles, fuel, boats and motors to gear and clothing in addition to hotel stays and restaurant meals.
I'd like to just go straight to the recommendations. Last time I was here I didn't give enough time for questions, I didn't think. We do have 11 recommendations, and what I'd like to do is touch on the first five — I've got them listed in order of priority — and then leave the rest with you.
Also, as a note, we are approaching our 55th annual general convention. It will be held April 14, 15, 16 and 17 at the Sheraton Guildford, and you all will be receiving an invitation over the next two weeks — and welcome you to attend.
Solutions for future sustained success. Our No. 1 recommendation is: establish adequate funding for fish and wildlife management. It's critically important for the overall health of fish and wildlife in their habitat to ensure adequate funding is in place for inventories, harvest monitoring and staffing levels.
The inventory budget should be increased to $3 million to be able to meet the identified needs. If this is not addressed in a real way, the consequences when dealing with First Nations will potentially impact B.C. residents' ability to contribute to the economy through hunting and angling and seriously curtail available conservation dollars for the future of B.C.
Recommendation No. 2: third-party engagement with First Nations. We would recommend that we use the existing Ministry of Aboriginal Relations and Reconciliation budget to fund and facilitate a direct association and a discussion process or a forum between public associations and First Nations wherever potential participants mutually desire.
We were actually the lead in a situation and started a working table out in the Fraser Valley which culminated in the Living Rivers Group, so these kind of partnerships really do work well. I think providing some seed funding for that will prevent further conflicts and aid in the process.
Recommendation No. 3 is: direct-access gaming funds for outdoor education. The B.C. Wildlife Federation requests that the government honour the social contract to B.C. residents — specifically, the membership of the B.C. Wildlife Federation — and reinstate the ability to access gaming funds to provide outdoor education for children, youth and persons with disabilities immediately.
I'm just going to take a break to that. We utilize volunteers. Our membership is growing substantially. For government to run these types of programs, the cost is prohibitive. We have a strong record. We are inclusive. We have Wild Kidz Camps held across the country. We have Fishing Forever, which gets persons with disabilities out into the outdoors.
We implemented this last year — the national archery in schools program. I actually received the funding from the U.S. It is a sad state of affairs when this is in ten schools and expanding into our province and we have no provincial ability to access gaming or other things. These are the kinds of programs that all children can participate in. You don't have to be athletic. You know, it gets people connected with the outdoors.
We also request that the timeline for lottery raffles be increased from 90 days for sales to six months to be able to increase revenue. I think we all know, government as well as non-profits, that this is a lean year. It's lean times. We need to be a little more flexible to enable the programs to continue.
Recommendation 4: increased funding for agriculture-wildlife conflicts programs. The B.C. Wildlife Federation recommends increasing funding for agriculture-wildlife conflicts programs. These programs can have multiple returns by reducing costs of problem wildlife calls, reducing loss and compensation to landowners and increasing opportunity and participation for harvest.
One of our new programs, which we will be launching at the end of October in partnership with the B.C. Ag Council, is our outdoor passport. This is connecting landowners with hunters and anglers to increase opportunities and to take care of, with the hunting aspect, wildlife conflicts.
Recommendation 5: increased funding for enforcement. We strongly suggest that enforcement budgets be
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increased to ensure adequate staffing on the ground and in the office. The number of conservation officers needs to be re-established to a number greater than before the reductions. This also will economically be beneficial to the province. Enforcement of licensing is a strong incentive for all B.C. residents to purchase licences and be in compliance.
We have 11. One of them is the e-licensing, and I know that government is moving ahead on that. We're certainly grateful for that.
The other ones are very important, but these are our top five. I will leave the rest of them to read at your leisure. Do you have any questions?
J. Les (Chair): Thank you, Patti. I have a question from Michelle.
M. Mungall: Thanks very much, Patti. I wanted to ask you a question about conservation officers. I know that in my area we have one conservation officer for the entire Kootenay region. He is overworked, to say the least.
You have an example about the Shuswap region in your presentation here. I'm wondering if you have any further information about other regions of B.C., or B.C. as a whole, of the lack of conservation officers and the more specific impact it's having on our outdoor areas.
P. MacAhonic: Yes, we do. The federation board is made up of 23 directors. Ten of those directors are region directors. That would be the Kootenays. We have the west and the east. We deal with things on the ground as well. We do have statistics. We have a pretty good information flow — communications and reporting. If people are looking for more specific information, I would be happy to provide that.
M. Mungall: I would love it if you could get that.
P. MacAhonic: Please contact me, and I'd be happy to provide that.
D. Donaldson (Deputy Chair): Thanks for the presentation. Some very interesting recommendations as far as seeing how they apply in my area and could make a really positive difference in Stikine.
One question I did have was around…. You mention MARR in the second recommendation. I think you allude in the first one to the Ministry of Environment. What has been your association's relationship with ILMB? They seem to have a fairly major coordinating role, the integrated land management bureau, up in Stikine on many of the land issues, especially around First Nations consultation.
I didn't know if you've had any encounters, as an association, with them or what has been your input that way.
P. MacAhonic: I've been with the federation for three years, and over those three years I have probably met with ILMB representatives at least half a dozen times. My understanding is that they've lost staffing, as well, with cuts and are not as active on those files.
B. Routley: Thank you, Patti. Your recommendation 10 — I'd like to have a little bit more information on the stopping of the privatization of Crown lands. Is that issue partly related to accessibility? I know in my constituency I've heard from a number of hunters and fishermen who are concerned about limited access and the closure of more and more roads. Or is this just the issue itself of privatization and losing the land?
P. MacAhonic: I believe that it's both. In our organization, some of our member clubs are over a hundred years old. Sad to say that our founding president actually passed away this week — Ted Barsby. We're long-term, big-picture thinkers. We're looking for future generations, and we also are concerned about access. They're very interrelated, and they're both important.
D. McRae: One issue came up — and I'm not an expert on this — in my riding. For people who go hunting up in northern B.C., I think especially for moose, there is a concern they raised about multiple licences being needed — like not just the provincial licence but with First Nations as well. I wasn't sure whether…. They didn't have a lot of information for me at the time. Is this an issue that's come up with members — some treaty negotiations that you needed a separate licence to attach for hunting in traditional areas?
P. MacAhonic: As far as I know, we don't need separate or distinct licences. It depends on the area. The hunting in B.C. is managed on conservation, which is why it's so important to have the inventorying done properly. There's a general open season, and then you need to buy a…. We'll talk about moose, since that's what you brought up. You buy a moose tag.
In some areas they have limited-entry hunting for moose, so then you would need your hunting licence, your moose tag. But you would also need to apply…. It's like a lottery system that you'd have to get the LEH.
I'm not aware of that — that another licence…. I know people are concerned. If wildlife management changes hands, we believe the province should be the body that does manage our fish and wildlife.
D. McRae: Fair enough.
J. Rustad: Hi, Patti. Good to see you again. Thank you for the presentation. I've just got a couple of quick questions — perhaps not so quick. I'm just wondering what you mean by "stop privatization of Crown lands" — if
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you give some examples of that. Up in my area I haven't seen any Crown lands privatized, so I'm just wondering where the concern is there.
The second thing is with regards to access. One of the things that we're looking at is being able to have some areas that might have more intensive forest management, the opportunity to be able to go in and do intensive silviculture. That means roads and those sorts of things would have to be opened periodically because there would be more people going in and actually managing the land base.
I'm just wondering, first of all, about the issue of private land. And the second issue is whether or not intensive forest management is something that would be compatible with the Wildlife Federation's goals on the land base.
J. Les (Chair): About a 30-second answer, Patti.
P. MacAhonic: I'd like to get to you on the privatization because it's a little more complex. It's connected to development, as well, and access. So in different areas there are different concerns in our regions.
The second piece of it. I would have to find out more information about exactly what that would look like before I could give a…. I'd need to confer with my land use committee because I'm not familiar with those plans and what exactly they entail, but I'd be happy to do that.
J. Rustad: We should have a chat later about it. Thanks.
P. MacAhonic: Yes, I'd be happy to.
J. Les (Chair): Thank you very much, Patti. Time is up, unfortunately.
At this point I'd like to invite up representatives of the British Columbia Real Estate Association — Mark Andersen, who's from Chilliwack; Norma Miller; and Cameron Muir.
P. MacAhonic: Oh, I've also left a calendar here for you.
M. Andersen: Good afternoon, Mr. Chairman and distinguished members of the committee. Thank you for the opportunity to present the following recommendations on behalf of the British Columbia Real Estate Association. Your time and commitment to this consultation process, while I'm sure it's been challenging, is greatly appreciated by our board.
My name is Mark Andersen. I'm a current, active real estate agent in Chilliwack and member of the Chilliwack Real Estate Board. I am chair of our government relations committee and sit on BCREA's government relations board as well. A little history: I spent two terms — six years — on city council in Chilliwack, from 2003 to 2008.
Our British Columbia Real Estate Association represents 12 real estate member boards and more than 18,000 members working in our communities throughout British Columbia. Joining me here today is our chief economist, Cameron Muir, and our political analyst, Norma Miller, to hopefully answer any questions you may have after.
I'm pleased to present our association's recommendations, which we feel will help improve housing within our province. Yesterday we had the opportunity to sit through a housing session with Minister Coleman, and we're hoping that our two submissions will be just a couple of tools you can add to the belt to increase housing affordability in our province.
As realtors, we share the same concerns as many elected officials with respect to affordable housing within each of our communities throughout the province. Housing is essential for everyone. Unfortunately, British Columbians currently face the highest housing costs in Canada. Provincial taxes that apply to shelter — namely, the property transfer tax and harmonized sales tax — place an unfair burden on our homebuyers. The British Columbia Real Estate Association's recommendations are intended to ensure a fair approach for homebuyers not only now but for the future.
Our first recommendation is that the 1 percent property transfer tax threshold be increased from the current amount of $200,000 to $525,000. The structure of the property transfer tax hasn't changed since the tax was introduced back in 1987, but as we all know, the housing market definitely has.
In 1987 the average home price was about $102,000 in our province, with 2 percent of the portion of the tax expected to apply on only 5 percent of the sales. If we fast-forward to 2009, the average home price in British Columbia was nearly $466,000, making the 2 percent portion applicable to 86 percent of the homes that were sold.
Homebuyers in B.C. deserve a fresh start, and we feel that this recommendation is a good beginning. If the 1 percent threshold had been $525,000 in 2009, about 75 percent of the homebuyers would have paid less in taxes.
The financial impact of this recommendation on the government is relatively minor. In 2009, revenue would have decreased by $165 million, or approximately 1 percent of the taxation revenue. On the other hand, lower revenue from the property transfer tax may be eased by the increased number of British Columbians who may be able to enter the housing market as a result of a lower tax burden or by allowing homebuyers more money to spend on products and services related to their home purchases.
Our second recommendation also relates to the property transfer tax. The 1 percent threshold should be in-
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dexed using Statistics Canada's new-housing price index, with adjustments made annually. The threshold isn't indexed now, so it remains the same. However, home prices continue to rise.
This means that B.C. homebuyers pay an increasingly unfair amount of property transfer tax each and every year. Indexing will ensure that the tax has the same impact on current and future homebuyers. While indexing would result in less taxation revenue, the provincial government would be able to anticipate and account for this in your financial projections.
Our final recommendation applies to the harmonized sales tax. The provincial HST new-home rebate threshold should also be indexed using the same new-housing price index, with adjustments made annually. Experience with the property transfer tax provides an excellent case study for what will happen with the HST new home rebate threshold if it is not indexed now. The current HST rebate is available at 71.43 percent of the provincial portion of the HST up to a maximum of $26,250.
The rationale behind the structure was that most, or about 75 percent, of the buyers of new homes would pay no more tax currently with the HST implemented.
However, unless the threshold is indexed now, as new home prices rise over time, a higher proportion of buyers will pay HST on new homes. The amount of HST paid will increase on the average home price as the average home price rises. We estimate that new home prices in communities throughout B.C. will exceed the maximum threshold by the year 2025 unless the recommendation is adopted. By acting now to index the HST new homebuyer rebate thresholds, elected officials have the opportunity to resolve a problem before it appears. This will save future buyers of new homes an unfair tax burden.
We believe that fair tax shelters and a thriving economy will help citizens throughout B.C. enjoy an enviable quality of life. Real estate is a well-recognized economic indicator, with more than 85,000 homes sold through our Multiple Listing Service in 2009.
From an analysis conducted in 2007, every hundred residential sales on the Multiple Listing Service generate $4.2 million in economic output, which includes taxes, and nearly $1.3 million in household income.
A study recently conducted by a U.S. national association of realtors indicates that home ownership contributes to stable housing, boosts educational performance of children, induces higher participation in civic and volunteer activity, improves health care outcomes, lowers crime rates and lessens welfare dependency. Home ownership is a part of a foundation of a healthy community and a thriving province.
This concludes BCREA's presentation. If you'd please review the BCREA, the Real Estate Association's, written submission for further details on recommendations. If the three of us can answer any questions that we've brought up today, we'd be happy to try and answer them for you today, or we'll be able to get you information out fairly shortly. Thanks again for your time.
J. Les (Chair): Thank you, Mark.
D. McRae: Thank you very much for coming. We've heard many times from presenters about the property transfer tax. One question that I have…. In the Comox Valley, where I'm familiar with, we have different DCCs, obviously, in different communities, and yet the market will basically charge what the market will bear.
If the property transfer tax — assuming it were to go away or be changed in some way, shape or form…. Is there some data that you can provide that would say the savings, by doing that, would be passed on to the homebuyer, that gives a government some sort of certainty that they're going to make an action that's going to give the intended result?
C. Muir: We don't have any research on that. I understand your idea in terms of market reaction — that all things being equal, you may see prices climb just to pick up that difference. That's something we have to look at in terms of…. We'd have to do some research around that elasticity of demand.
One point I think worth mentioning is when we talk about the property transfer tax here in British Columbia, because it's so high compared to the rest of country. I think last year the average-priced home in the province faced about a $7,200 PTT bill. In Ontario that was $3,500, and that was our nearest competitor, if you will. All other provinces drop off dramatically.
One of the things that I know the government is aware of is that longer term, expansion of our labour force in the province here is going to slow over time. I think even the most optimistic account looks at the labour force expanding only by 1 percent by the time we get to 2020. So attracting labour — mobile labour — across Canada to the province is really important to our overall economic activity in terms of our economic performance and our standard of living, quality of life here in British Columbia.
In order to attract people to the province, it's quite difficult, given (1) our very high cost of housing but (2) the inordinate burden of the property transfer tax paid in British Columbia compared to other provinces in Canada.
J. Les (Chair): Anybody else with a question?
B. Ralston: Just to follow along on that, Cameron. I just glanced through the paper. I mean, I understand how it works in economic theory, although I think economic theory has probably been tested by the events of the last
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couple of years. Do you have any empirical evidence that would suggest that the high cost of housing — besides the anecdotal — is a barrier to attracting labour to British Columbia?
C. Muir: We certainly don't have any empirical evidence of that. But from a theoretical perspective, I think it's pretty easy to understand that if you're a young household that's footloose in Canada looking for a job in one of the provinces, you're going to look at many things, not just that particular job opportunity. You're also going to look at quality of life, standard of living when you get there. We see this, certainly anecdotally — in Vancouver, for example, having the highest home prices in the country.
There's a certain amount of sticker shock from other Canadians planning on relocating or migrating to this part of the world. When you add in the relatively uncompetitive property transfer tax that we charge here in British Columbia, that certainly is quite a burden on the budgets of individual households, individual workers aiming to come here, and it certainly acts as some kind of a barrier.
I think everyone would agree that if you're going to move to some other province in the country and your cost of housing is extraordinarily high, then you might decide to choose to move to some other jurisdiction and deploy your labour there rather than come here.
I think over the long term that's going to be one of the challenges that we have in British Columbia. Not only attracting the workforce but being able to have a competitive tax regime — not just on the income tax side, which is very competitive indeed, but also on the totality of the tax burden on households in the province, particularly those planning on moving here from other provinces.
J. Les (Chair): Anyone else? I guess if there isn't another question, I'll maybe follow up on Don's question. As Mark knows, I spent some time with city council, and it always amused me that when council proposed to increase DCCs, there was the usual outcry that we were going to make housing unaffordable and that sales would collapse and everything else. Development cost charges would go up, and the price of raw land for development would seem to just keep on going up as well.
So over to the question about the property transfer tax. I need to be convinced that a ramping down of the property transfer tax would actually result in increased affordability for homebuyers. My guess is that the prices that are out there today are what the market will bear and that someone else will soak up that additional room in the total price, if you will. Along with others here, I'm sure, I would love to see some good hard evidence that a reduction in property transfer tax would actually have the effect that you suggest it might have.
Housing affordability is impacted by a wide range of things. Let's also not forget that in British Columbia we have some, relatively speaking, modest income taxes and other types of taxation that other provinces don't share. Property taxes probably are somewhat different here than they are in other provinces as well — looking at Saskatchewan, for example, where they've got notoriously high property taxes. All of those things go into housing affordability. I think we need to accumulate all of that together in a more sort of holistic view of the entire matter.
If you could maybe take a step back and take another run at that, I would be appreciative, certainly.
C. Muir: Thank you. It is something that we will certainly embark on.
If I may, just one comment. With the property transfer tax, the consumer who buys a home, that property transfer tax is not — particularly if you're a first-time buyer and you're maxed out on your loan-to-value ratio…. You're going to have to come up with that tax as cash up front. That has the impact of delaying ownership for first-time buyers, and that has a direct impact on British Columbians. You don't really need economic theory to get that across. It certainly has an impact there.
But we will certainly take your comments, your question, and we will run with the numbers and report back to you.
J. Les (Chair): I've also talked to realtors who suggest that the property transfer tax is included in the global price and just becomes part of the mortgage calculation. You might want to have a look at that too.
I mean, when you say that they've got to actually come up with that money in cash in addition to their down payment on all those other things…. If a house is selling for, let's say, a $400,000 price, that would include the property transfer tax at that point, and that is what actually goes into the mortgage calculation?
C. Muir: It would decrease your purchasing power, for example, as a first-time buyer. Your purchasing power is going to be diminished as a result of having to do that. So if you needed to roll over that property transfer tax into your mortgage, then your loan-to-value ratio on the price of the home would have to modify downwards. That has an impact on their overall purchasing power.
J. Les (Chair): Anyway, fascinating stuff. Thanks for coming today. I really appreciate your input, as always.
Our next presenters are from Terasen. Doug Stout is here.
D. Stout: Well again, thanks very much for the opportunity. It's a beautiful day here in Whistler. There's a long
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list of folks out there across the street waiting to talk to you, I'm sure, for the next few days.
I'm here representing, basically, the Fortis group in B.C. That's comprised of Terasen and FortisBC, who a number of you are familiar with on the electric distribution side.
Just as a little background…. I think most of you are aware of who we are, but we've been serving the energy needs of British Columbians for over a hundred years, and today we, as a group, deliver over 20 percent of the total energy consumed in B.C. We serve more than 1.1 million customers in 135 communities. We employ 1,800 British Columbians, and we expect that number to increase to about 2,100 in 2012 as we open…. Our new B.C.-based contact centres are bringing our business back to British Columbia.
With our experience and expertise — and we believe, the public's trust — we're committed to doing what it takes to develop and implement energy solutions that will set our province as a positive example for others.
Together we've invested a little over a billion dollars in B.C. since 2007, and our combined assets comprise $6.4 billion in B.C. today — that's about 52 percent of the value of the total Fortis operations across Canada. We have planned about $2 billion in capital expenditures over the next five years.
We deliver natural gas, obviously, electricity and also integrated energy solutions. Those include geo-exchange, waste heat, solar and thermal, for example. We are developing district energy solutions in communities across the province and, hopefully, helping B.C. reach the energy, economic and environmental criteria that have been set out for the province.
I want to talk about two things today. I'm not looking for incentives on this. The first one is a recommendation to the standing committee, and it really drives around encouraging private investment in integrated energy solutions across B.C. What we're looking to is that the provincial government encourage private sector investment in these energy solutions and recognize the role that utilities can play in investing in and operating these energy systems for the long term, as we have with other structures across the province.
We believe we have a unique operating environment to work in and one where we're accountable to our customers through a transparent regulatory process and to other stakeholders — accountability for not only operating costs but any new major capital projects and the ongoing costs of those things.
We believe — besides ourselves, there are others involved in this sphere — that the private sector has the capital and the expertise to develop the energy systems that are cost-effective to consumers and business. So in encouraging the government to really promote these — we call them collaborations, really, rather than partnerships or P3-type arrangements…. But working together collaboratively, we can develop these systems and really obviate the need for any government subsidies, government funding for those things and put cost-effective and realistic solutions on the ground over time.
In the last few years, as I said, we have developed a number of these solutions to incorporate a variety of energy needs and really drive the province towards meeting our environmental goals of reducing energy consumption and GHG emissions and also sustain economic growth in the energy sector as we put new capital into play.
As I said, we recently announced repatriation of our customer care operations back to B.C., and these contact centres in Prince George and Burnaby will create 300 local jobs and bring in about $25 million a year into the provincial economy.
We recently announced the Waneta dam expansion project. The $900 million hydroelectric facility that's a partnership between Fortis, the Columbia Basin Trust and Columbia Power Corporation is another example. This project will be driving an estimated $200 million in wages and benefits into the economy and creating 400 new jobs in the Kootenay region.
At the same time, this expansion is going to serve the needs of both FortisBC and B.C. Hydro electric customers. So those are two examples of things. We have a lot of others across the province on a smaller scale, driving energy systems.
What we are looking for is for the government to continue to encourage that private sector relationship and operatorship and ownership of those things and preserve — I call it — government funds for things that are, perhaps, more near and dear to the voters and to people who need that oversight.
The second recommendation on our front is around — now, I am talking about incentives here — natural gas vehicles and the deployment of natural gas vehicles in British Columbia. What we're looking for…. I'll talk a little bit about the incentive, but we believe that an incentive in place with government — and this is a partnership incentive, not just government providing the incentive — would help offset the incremental capital cost of natural gas vehicles versus diesel fuel vehicles and gasoline-fired vehicles.
We're currently providing an incentive program to help our customers offset that cost through our energy efficiency programs. We propose that the government consider a 50 percent matching program, so that for every dollar we put forward in incentive the government would match with a dollar. That would go to the fleet operators.
It basically buys down their incremental capital costs and results in a number of benefits. That's a cost savings to the fleet operators and fuel costs. I'll describe those in a little more detail. So increased royalty revenues for
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provincial governments — we're going to drive more natural gas use in the province — and a decrease in GHG emissions overall, as well as some other emission factors.
We've put one little example here. We've worked through looking at a situation where we'd replace 25 municipal waste-hauler trucks, 54 transport trucks and one ferry — with natural gas. We are in discussions with B.C. Ferries around opportunities to fuel the ferries on liquefied natural gas.
A one-time investment of $3.6 million from the provincial government with matching by us would displace 92 million litres of diesel fuel, reduce 59,000 tons of GHG emissions and, we think, deliver about $4.3 million in royalty revenue through the increased use of natural gas.
Conversely, rather than incentives we could look to the government to move forward with working with us or regulation to the B.C. Utilities Commission to allow us to continue to offer these incentives and move through an increased use of natural gas in the system.
The other types of incentives we are looking at, as well, are really non-financial, I'd say. It's things like access to HOV car-pool lanes — so allowing fleet operators and operators of these vehicles access to the HOV lane, which really has an incremental benefit to them in reducing their turnaround times, improving their operating costs and driving further savings; and front-of-line access at ports for these types of vehicles that are hauling containers in and out of the ports, and allowing them a quicker turnaround time. Again, it's another incentive that drives operating costs and benefits back into the economy.
Another factor is funding assistance to help with the cost of gas-safe facilities. Whenever operators put in natural gas, they have to add some safety equipment — methane testing equipment, those kinds of things — to their maintenance and fleet facilities. There's an incremental cost there. It varies by facility. But to think about some methodology whereby the government might be able to provide some funding directly to those fleet operators for those types of assets.
We think there's a great opportunity in this, overall. Again, we said the operators of the fleet will reduce their costs. Just to run through. I won't go into detail. You can read all the factors here. Really, on that front we're looking at a 30 to 50 percent fuel saving for operators, compared to gasoline and diesel fuel, for natural gas and a 20 to 30 percent reduction on GHG emissions.
When we look through this whole thing, fuel costs are a significant operating cost for fleet operators. So 20 to 25 percent for trucking fleets, 30 to 50 percent for highway fleets and 15 percent for B.C. Ferries. Moving reductions there reduces the operating costs of our economy, puts more dollars back in everyone's pockets to deploy elsewhere and makes us more competitive on a global scale in our cost of doing business.
We also think it contributes to energy security. Today we import the bulk of — I won't say the bulk of; let's call it 99 percent — the gasoline, diesel fuel and/or crude oil that were used to refine the gasoline or diesel fuel in B.C. refineries, and we have abundant supplies of natural gas. We're enhancing our security and reducing our reliance on imported fuels.
In other jurisdictions — you know, across the U.S. — one in four buses produced for the North American market today are now powered by natural gas. It's a large uptake in the U.S. and across other parts of the world.
In the U.S. 35 state governments as well as many regional and local governments offer incentives to purchase and operate natural gas vehicles. These take many forms. There are tax deductions and credits, reduced licence fees, reduced vehicle sales taxes and lower registration fees. So there are a number of ways to skin the cat, when you go through this and look at things. The other factor….
We've attached some letters of support here, obviously from other members of the natural gas vehicle community, but a number of well-known companies across B.C. like Westport Innovations; Cummins Westport; IMW Industries; Technocarb Equipment; Max-Quip; Eco Fuel Systems; Metro Motors; a variety of developers of technology and services who deploy those in Canada as well as export across the world; and other more local businesses that are involved in conversion of vehicles here, such as Metro Ford, who operates the maintenance facilities within the province of B.C.
So there are some incremental benefits here across the board, we believe, in these types of initiatives.
I'll leave those comments with you, and as I say, there is more detail as you read through the submission.
J. Les (Chair): Thank you very much, Doug. We have some questions.
D. McRae: My question was answered during the presentation. So I'm fine. I'll pass.
D. Donaldson (Deputy Chair): Thanks for the presentation. Definitely a very, very prominent topic — energy distribution in the province.
I had a question on the first recommendation. You can correct me here. As I understand it, Terasen and FortisBC are about the delivery of the energy created through the integrated energy system. So would the shareholders not be more concerned about encouraging that delivery and less with the model of how you get there?
In other words, I assume that the more integrated energy systems and energy that Terasen and Fortis can deliver, it's a better return to the shareholders, and the actual model of public or private ownership around integrated
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energy systems is less of a concern to shareholders. Would that be correct?
D. Stout: Two things. When we look at it from the public or private side…. Obviously, we're on the private side, so we lean more towards that versus public ownership. In the regulated assets that we operate — whether that would be an electric system, gas or an integrated energy system — we make the same earnings. We earn a return on the capital invested. Then, operating costs — all those things are flow-through. We're indifferent as to what asset we invest the capital in. That's regulated by the Utilities Commission, and we have oversight there.
It's really around whether we get to invest in it or whether it's the public sector. But we think that the private model…. There are others, like Corix Utility Services and others who are investing in these things as well in that model. It brings a transparency and an oversight and really allows the private sector to focus on things it does well and leave those public funds to things — whether it's education, hospitals — that need the resources, since we're all constrained with ability to finance and get dollars for certain initiatives.
J. van Dongen: Thank you, Doug, for your presentation.
On the $3.6 million proposed incentive investment by the government, I'm not quite clear how that money would be disbursed. Would it be something that people apply to, and do the numbers up above…? Are they included in this calculation? I'm just wondering how you would expend those dollars.
D. Stout: This is just one example for this kind of mix of fleets. The way we've done the dollars to date…. The fleet operator applies for the money, lays out the business case of how many vehicles they have and the number of kilometres it drives — those kinds of things. Then we can do the math and figure out if there's a business case there. Then the dollars are given back to the fleet operator to buy the vehicles.
The way we're working with it today…. When they show us a signed purchase order that they've issued, they get 50 percent of the funds, take delivery, get the other 50 percent of the funds for the incentive.
J. van Dongen: The $3.6 million example, then, would apply to 25 buses, 54 trucks and one ferry.
D. Stout: Yeah. That's kind of an example to quantify it.
J. van Dongen: And what would be the total capital investment to do those conversions? Is it twice that amount?
D. Stout: Yes, twice that amount. That's the difference in capital costs. The people deploying it, though…. The 25 buses are about $500,000 per bus. That would be a $12 million investment by the bus fleet and 54 trucks at probably somewhere in the $300,000 or $400,000 range. Again, they're looking at a $7½ million or $8 million investment that they're making.
J. van Dongen: So for a passenger vehicle, is it practical for an individual person with a passenger car or a pickup?
D. Stout: There are technologies out there to fuel it, but we're looking more at the fleet — return-to-base fleets and larger fleets. We've been down the path of the fuelling station on the corner, and really, we think that to make the economics go round and make the uptake reasonable, we should focus on the heavy-duty fleets, where this is a big win. We may evolve to the passenger fleets over time.
J. van Dongen: Just a final question. Any difference in operating characteristics of trucks?
D. Stout: Actually, the trucks are in waste management. There's a clip in here that announced a conversion today. The trucks operate cleaner and quieter, and they've experienced lower maintenance costs from their trucks than others.
J. Les (Chair): A final quick question from Bruce.
B. Ralston: Thanks very much. B.C. is obviously a leader in natural gas transportation, when looking at Westport. But there was a demonstration project here at Whistler with the fuel cell, and of course Ballard is another B.C. technology as well.
I presume you would argue the advantages of natural gas. What would you consider to be the advantages of natural gas technology as opposed to the fuel cell technology?
D. Stout: I think the natural gas technology…. When I mentioned 25 buses at $500,000, I think the cost and the infrastructure for the 20 buses up here was approaching $85 million to $90 million. So just at the stage of technical development and the cost benefit, we think there's a big win there.
Obviously, there are other…. We're not advocating that natural gas is the only solution. There are biodiesel solutions that make sense in certain locations. Electric vehicles. When we look at it, there will be specific applications where different technologies and energy forms will make sense. It's about putting the right ones in the right place.
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That gets back to the question on fleets versus passenger cars. Trying to deploy passenger cars on natural gas today we don't think makes sense here in B.C. It may down the road, but we're trying to target where we can get bang for the buck for everyone.
J. Les (Chair): Okay, thank you, Doug.
Our next presentation is from the Canadian Renewable Fuels Association. Doug Hooper is here.
D. Hooper: Good afternoon, hon. members — Smithers ski hill cabin neighbour, Mr. Donaldson. It's funny who you meet in Whistler.
I'm just going to go through a bit of a lengthy introduction, because I wear several hats. My day job is I'm the CEO of Canadian Bioenergy, which is based in North Vancouver. We're a renewable fuel and biomass project developer looking at projects that are Canadian-based. I'm the 2010 chair, a non-executive position, for the Canadian Renewable Fuels Association. That's what brings me to this seat today. My night job is I'm a councillor for the municipality of Bowen Island. So three different perspectives, often all of which share the same interest in clean energy.
It's the perfect segue to follow my colleague from Terasen and discuss transportation fuels and the benefits of renewable fuels in delivering GHG reductions and clean air and things like that.
I do not have a written submission for you today because primarily what we're interested in doing with the province of British Columbia is the same invitation that we've put to the provinces of Alberta, Ontario and Quebec and our colleagues in Ottawa, which is to engage in the next stage of program and tax structures to revitalize the economy through the buildout of renewable fuel production plants and use a tax-based system.
I'll just go through a couple of items. By way of background, British Columbia has adopted a low-carbon and renewable requirement. The acronym for that low carbon fuel regulation requirement is LCFRR. It puts B.C. in a position of leadership in North America. There's a mandate volumetrically on both the gasoline and diesel pools of 5 percent. The diesel pool is 3 percent this year, and it scales 4 percent and then 5 percent in 2012. There's also a 10 percent reduction requirement of 10 percent of carbon off of baseline fossil fuel to be achieved by 2020.
That's what British Columbia has in place now. As I said, it's comparable to what other leading jurisdictions like California have implemented with regard to transportation fuel solutions.
One of the effects of this type of regulation, in addition to the carbon in clean air attributes, is that it is inducing development of industrial plant projects to manufacture renewable fuels. So you've got both ethanol, which goes into gasoline, and biodiesel and renewable diesel, which go into diesel fuels.
Companies like Nexterra and Lignol, for instance, are active on the ethanol side. We've got companies like Husky, which are developing projects to hydro-treat animal fats and vegetable oils in Prince George and make what's called a hydro-treated vegetable oil or a diesel product out of those raw materials.
B.C. companies have quite a number of submissions with the federal government right now in a final program allocation. We're going to be seeing some economic activity from this industry very shortly.
The types of proposals that we'd like to put forward for consideration in the budget discussions are threefold.
Firstly, we need some capacity. Minister Bennett has a very fine and capable staff, in our view, but they are definitely strained as to resources for implementing this LCFRR. It's very technical. You have to do full life-cycle accounting of all of the different production pathways, for feedstocks and then conversion into fuels. The Petroleum Resources Ministry has a number of measures that they have to monitor and report to, and that's putting demands on our department staff at MEMPR. I think that's kind of a short-term, immediate thing that we could help the minister and the department with.
The second thing is just around how we build out these projects to meet the LCFRR goals by 2020. There's a staging to this. You don't build $50 million, $100 million or $200 million projects overnight. It takes a number of years to go through the permitting and development process. It takes a number of years to go through what the right structure is to make British Columbia the jurisdiction where you want to build these projects. That's the stage we're at now.
The kinds of structures that we're looking at are refundable tax credits around CCA — that's a capital inducement — and also refundable tax credits around production. Those are meant to offset the early-stage risks when projects are looking for payback in that first critical one- to three-year period. Those are the things that are on the table right now in Ottawa.
Natural Resources Canada has initiated a review process for their…. Well, let's call it the 2015 timeline. Alberta is also redoing its energy plan during the fall of this year. Those are the same questions that we're putting forward for analysis and review.
We've initiated both legal work and tax legal work with KPMG and Gowlings to assist us. This work is not ready today, but it will be coming forward. Really, we're just looking for some top of mind awareness as we move that process along.
The third thing, then, is demand-side measures. We do have a British Columbia–based association called the B.C. Biodiesel Association. They've submitted a written document specifically on this request. The Canadian association
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endorses it. What it is, is a recommendation that we return the motor fuel tax relief to high-blend renewable fuel use. It used to be there.
In 2004 we relieved renewable fuels in British Columbia from motor fuel taxes. When we brought in the mandates and the carbon tax, we put those taxes back on the renewable component. Canadian renewable fuels are delivering 50 to 60 percent reductions in GHG in ethanol pathways and over 80 percent in biodiesel. It's a good thing that we want to support.
It will also support the municipalities in one of their compliance pathways towards meeting their carbon-neutral commitments by 2012. Something we were talking about yesterday in one of the forums was: how are municipalities going to pay for offset credits? How are they going to physically comply with this carbon-neutral commitment that we've all made?
One of the ways is fuel switching, and one of the ways that you can get there through fuel switching is to have higher than the 5 percent blend. With ethanol you can take it to 10 percent, or you can have a flex fuel E85 car. With biodiesel you can go anywhere from the 5 percent mandate up to 20 percent.
Most OEM — equipment manufacturers — have warranties that will support that blend level. There are a number of types of equipment, like mining equipment — underground, for instance — that can burn 100 percent biodiesel. So if we're relieving those ultra-low-carbon renewable fuels from the motor fuel tax, it would certainly support the development of the industry.
Just in summary, the kinds of benefits that we will achieve if we focus on these points…. We will lower our GHGs. We will support the municipalities in meeting their carbon-neutral commitments.
We'll also help the regulated petroleum companies to meet their LCFRR requirements. They need compliance pathways to get 10 percent of the carbon out of the fuel by 2020. We'll clean up the air. Over and above carbon, we've got a big benefit that particularly biodiesel delivers by taking particulate matter and other pollutants out of the diesel combustion.
We'll extend our supplies of fuels. Right now we are, for an energy-rich country, still an importer. We import our gasoline and diesel to meet our requirements. And of course we will support the sustainable use of our forests and our farmlands, because renewable fuels are made from those raw materials.
J. Les (Chair): Thank you, Doug.
D. Donaldson (Deputy Chair): Thanks, Doug. Nice to see you again, in slightly different dress than usual when we see each other.
A couple of questions, and you don't have to supply this information now. If you could dig it up and supply it to the committee, unless you have it at the tip of your tongue.
The amount. Has the association given any consideration to what they think would be the amount of funding required to increase the capacity of MEMPR to deal with LCFRR? And any ideas about how much the refundable tax in the buildout…? You were talking about the CCA and the production as well as the removal of the tax on the low-carbon fuels, but what are some figures on that would be on the revenue side as well?
D. Hooper: The first part of the question, in terms of MEMPR support: definitely one FTE — one full-time-equivalent person — possibly two. This person should be an engineer and have ten years' experience under their belt in order to meet the task requirement. So that's probably a six-figure job — low six figures, maybe.
I'd prefer to defer the answer on the second part of the question with respect to costing, because we are looking to our professional analysis that KPMG and Gowlings are doing with us to do the volumetric calculus and be sure that we capture both the cost of the fuel tax offset as well as the benefit of the economic activity and all the derivative things that come back in to the calculus. So it's not just a straight relief of tax. You get a lot of economic spinoff as well.
J. Thornthwaite: Thank you, Doug. Just a quick question about what you had said about capacity. You said that Minister Bennett's staff were strained to implement the regulations and requirements. I'm just wondering what your suggestion is with regards to your assistance in that, or are you just calling for money for his staff? What specific suggestions are you thinking?
D. Hooper: Well, the department's headed up by a fellow by the name of Michael Rensing — a very capable person. But he has only so much bandwidth, and I think they lost one of the ADMs or the deputy out of that department.
It's just a big task. I know that our colleagues on the petroleum side are equally concerned because the LCFRR is technical, and there are brand-new reporting requirements and calculations to go through, particularly in the earlier…. This is a reporting year — 2010. Then next year is an implementation year. So we have time. That's the good news. But everybody's expecting that it'll be fairly challenging to go up the learning curve and get the processes, get the kinks ironed out.
J. Les (Chair): You mentioned ethanol several times and, in fact, increasing the blend. There's been a debate about the, I guess, morality of using corn and grain and those kinds of materials in products for the production of ethanol versus, perhaps, sugar cane out of places like Brazil, which has a far better conversion rate into ethanol.
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Any comment on that? I mean, obviously there has been some upward pressure on food globally as a result of conversion to ethanol. I think it's an interesting question that deserves some consideration.
D. Hooper: Absolutely. The way that topic has been addressed, probably in its most fulsome way, is through sustainability standards. There are a number of global and regional bodies that have been created to look at developing sustainability standards that would be akin to, say, the FSC standard that we have for sustainable forestry, which is the Forest Stewardship Council's mark that the forest practices are meeting the best for consumers and gives them that safeguard.
In fuels we're doing the same kind of thing. There we are looking to food security as well as appropriate utilization of land. You mentioned sugar cane ethanol. One of the challenges for biofuels coming out of Southeast Asia and South America is the destruction of the rain forest.
Actually, one of the measures in B.C. that we are talking to the department staff about is that we do have to have a sustainability standard in place that prevents us from indirectly incenting the destruction of the rain forest and peat bogs in the planting of palm trees. If our mandate in British Columbia is causing this indirect impact, we want to be sure that we're capturing the carbon accounting and denying that as a pathway to compliance.
To your first part, though, about Canadian ethanol, I can speak to the Canadian metrics. I'm not an ethanol…. It's not my core expertise, but our colleagues in Ontario and Suncor greenfield ethanol — Husky makes ethanol from wheat in Lloydminster, Saskatchewan — are reporting full life cycle, from the planting of the crop through to the combustion of the fuel, and GHG reductions of, as I said, 50 to 60 percent compared to corn ethanol made from coal-fired electricity in the United States, where you've got a much higher embedded GHG.
So the different pathways will give you different numbers. That's just with respect to the carbon idea, but you still have to get back to food security. Our perspective on that is food first, then fuel. We have an alternative to renewable fuels. We can always switch back to natural gas or diesel and gasoline. But if people are hungry, we've got to use the land appropriately.
J. Les (Chair): Thank you very much.
Our next presenter is from the Canadian Media Production Association. I think we've got Liz Shorten, Rob Bromley and Catherine Winckler.
R. Bromley: Thank you and good afternoon. My name is Rob Bromley, and I am the president and partner at Force Four Entertainment in Vancouver. As a producer, I'm also the chair of the Canadian Media Production Association in B.C. We appreciate the opportunity to address the committee today.
I'm here with fellow CMPA member Catherine Winckler from Switch United, who will speak later in our presentation about the relationship between film, television and the interactive space. Also, Liz Shorten is with me. Liz is the executive director of our association.
The CMPA is a trade association representing 75 member companies across British Columbia engaged in the production and distribution of television programs, feature films and interactive media content. We are significant employers of B.C. creative talent, and we assume the financial and creative risk of developing our stories and original content for Canadian and international audiences. Our members create content for distribution on traditional film and television, Internet and mobile wireless platforms.
Projects like the award-winning documentary 65_Red Roses; the television series Ice Pilots, Da Vinci's Inquest and Hiccups; and feature films Capote, Fifty Dead Men Walking and Gunless have all been produced by B.C.-owned companies.
Over the past 20 years the policies and investments by the provincial government have created an established film, television and interactive sector in B.C. that has had particular success in attracting production from Hollywood studios.
What we want to talk to you about today is an opportunity to build on this success to further encourage B.C. companies to tell our own stories. This has both a creative and economic benefit for British Columbia. B.C.-owned entertainment content has huge potential to become a significant B.C. export.
Like log harvesting, production services for Hollywood films are only one part of the industry value chain. The most effective way to create jobs and add value while keeping the control in head offices in B.C. is to invest in B.C.-owned entertainment production.
Years ago Japan's economy was based on producing inexpensive products and knockoffs for export, but Japan became a world power when they began using their skills to produce products of their own invention and intellectual property. Their innovation and creativity propelled them to an economic power.
We can do the same with this industry by ensuring that we own the intellectual property and keeping the creative artists here in B.C. We have the education facilities already here, so much of the investment by government is already in place.
With the right government policy shifts, even small investments can propel the B.C. industry up the value chain, allowing it to retain and export more of its intellectual
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property. This will create a substantially more sustainable B.C. creative sector, a more profitable industry and more government revenues.
My company's recent documentary 65_RedRoses is a good example of the benefits of moving up that value chain. So 65_RedRoses is a local story of a young woman with cystic fibrosis who needed a double-lung transplant. The story idea was brought to us by two young UBC film grads.
When this story was shown at the Vancouver International Film Festival last year, organ donation registry doubled, and when it was broadcast, organ donation tripled. It has won many awards nationally and internationally, and it also has been an economic success in terms of international sales.
Our company will, in fact, soon announce the sale to a major U.S. network, where millions of people will view this show. It's a perfect example of how a made-in-B.C. show has succeeded creatively and economically, with the additional benefit of telling a story of how people can take a proactive role in our health care system, right here in B.C. The project was made possible by the vital support given to us by B.C. Film.
In addition to 65_RedRoses, we are currently producing a multi-million-dollar television series called Village on a Diet, which was shot entirely in Taylor, B.C., which is just outside of Fort St. John.
Again, not only was there significant economic benefit, because the series was shot there over a period of four months, but there were many other direct benefits that the region enjoyed.
Cupcake Girls is another television series we're producing. It's a fun show that we shoot in Vancouver about two women, born and raised in Victoria, who share their entrepreneurial know-how. This series is also a tourism ad for B.C. and will not only be seen this year by Canadian audiences, but will be available to 80 million homes in the U.S. and in such far-off countries as Afghanistan, of all places.
To be sustainable in the long term the B.C. industry must move up the value chain where B.C. companies participate in all aspects of film-making, not solely production and post-production services. The right investments will propel B.C. industry to become a fully integrated production centre.
While we commend government on recent tax credit changes, it has also had the unintentional note of further disadvantaging B.C. content entrepreneurs and reinforced B.C.'s position as primarily a service provider.
Recognizing government's very tight fiscal situation, we are asking government to consider two requests: one is restoring the funding to B.C. Film to preserve more intellectual property in B.C., controlling our destiny, telling our stories and becoming a fully integrated production centre; and secondly, immediate small administrative adjustments to Film Incentive B.C. that target B.C.-owned work that will significantly and immediately improve the investment client for new projects.
B.C. producers are willing, ready and able to work with government in moving the B.C. knowledge- and creative-based economy to a new level.
C. Winckler: My company, Switch United, is a Vancouver-born and -based 20-person SME, part of the digital media and knowledge-based sector that the government of British Columbia has identified as critical to the future of the province.
Our company's future is inextricably tied to the viability and sustainable health of the B.C.-owned film and TV industry in this province. We're a complement to their work, part of the value-added chain that takes their incredible made-in-B.C. stories for movie and television screens and extends them onto the screens of the future, be they smartphones or iPads — or huge digital walls, as we did for the interactive wall in the 2010 Commerce Centre at Robson Square — or an iPhone app that takes a show we're working on, like Brent Butt's Hiccups or Omni Film's Ice Pilots NWT, and adds even more exportable value to them by devising show-associated original content that employs even more B.C. companies in the interactive, mobile and IT areas.
When B.C. producers cannot get the injection of funds to support exciting new ideas, we digital agencies cannot work our magic as multiplatform content providers. Innovation takes a bold outlook and the support of a government committed to a future that delivers content 24-7 on demand and at the choice of viewer on all screens.
After watching the TV show, our viewers on a show such as Ice Pilots NWT share their stories of the north on a reconfigured Google map application that government money has allowed us to develop. These stories are a legacy for B.C.
This year we're taking Ice Pilots mobile. In seasons to come with something like the proposed intellectual property development fund in place, we have plans to build revenue-generating Android and iPhone apps for aviator buffs worldwide based on the series.
If a B.C. producer isn't supported through immediate adjustments to Film Incentive B.C. or the critical implementation of an intellectual property development fund to tell their stories, the designers, writers, motion designers, programmers and artists of my company can't tell our stories.
We urge this government to consider film and TV not just as shows on a screen but as an ecosystem. Just as we realize that shipping our lumber away without supporting secondary industries of furniture-making or building materials is only telling half the story, not looking at all the by-products of a multiplatform film and TV industry in British Columbia is also missing a huge part
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of the story that can make this a great and sustainable B.C.-owned production sector.
R. Bromley: Over the years our company has told stories about Rick Hansen, Terry Fox and Emily Carr, all to national and international audiences, and 65_RedRoses and Village on a Diet are just the latest.
I believe that B.C. producers are the ones who should be telling these stories, our stories, not someone from other provinces or other countries. Having a thriving B.C.-based industry will ensure this ability to tell our stories for years to come, with great economic benefit to our province.
In summary, we're asking government to consider once again investing in a research-and-development fund of $2 million per year through B.C. Film. Thanks for the opportunity to speak to you.
J. Les (Chair): Thank you.
B. Ralston: Thanks very much. I appreciate the presentation.
I've been taken through solution 1 once before, but just with all due respect, there is a little touch of jargon in here: "preserve intellectual property while leveraging funds from federal programs." Can you say specifically what it is the fund would do and why it's a good idea?
L. Shorten: We've got traditional statistics through British Columbia Film that demonstrate that B.C. projects, when they are developed through a B.C. company, actually leverage federal and private dollars into the province. The federal moneys, for example, are 6 to 1, so we know that right now we're currently leaving federal dollars on the table. There's a real leverage that a little bit of research-and-development funding through B.C. Film can bring back to the province.
B. Ralston: Just, if I might, what specifically would the fund pay people to do?
R. Bromley: It would really allow us to do what we call our research and development. The term we use is development of projects, but those are our ideas. Those are the development of the idea to pitch to a broadcaster.
In our company, for instance, we have three full-time people. Their job is to go out and develop ideas. Those are helping us to cover the costs of that, which is an extreme risk to us as a company.
This is a business that is project to project, so hanging on to full-time people is always a challenge in our business. That's what we want to do. We have currently about 15 full-time people and probably another 30 on contract right now. But it's the full-time people — we're always trying to keep those jobs safe.
Those are the sorts of dollars that we're looking to that we can leverage into the marketplace and develop those ideas. Does that answer your question?
B. Ralston: So these are writers and creative people who are developing script ideas, and not all of them are successful in the sense that not all of them get picked up. But if these are funded, then there's an opportunity to have federal agencies provide matching or even more dollars than the original $1 million that comes out of this fund.
R. Bromley: That's absolutely correct — yeah.
B. Ralston: And it would be dispensed in smaller chunks of $30,000 or $40,000 at a time — that kind of idea?
R. Bromley: Yeah. I guess one of your points about those creative people — the writers, the directors…. We're trying to hang on to those people here in British Columbia. One of the great things that the government has done currently is help fund the education of those people. We want to keep those talented people right here in the province rather than them having to go to L.A. or Toronto to seek work.
Yes, we're trying to keep those people, pay those people so that we can get that idea from the very first idea right through to successfully into production and then into export of that idea.
J. Les (Chair): Final question from Bill.
B. Routley: Thank you for your presentation. I tend to think in terms of the potential job creation or supporting business job creation and business infrastructure that would come from these kinds of recommendations. It's not clear to me what you have in mind or what your projections would be for job creation and business creation as well as potential provincial revenue. Have you got some comment on that?
L. Shorten: Well, I think what we've seen in the last…. On page 3 of our report you'll see — and it will be continued this year — a real decrease in the levels of what we call domestic or B.C.-based production in British Columbia, from a high in 2007 of over $400 million.
What we're seeing over the last number of years, especially with the loss of funding to B.C. Film, is a real decrease in that injection into the economy. I would suspect that for 2010 the amount of B.C.-owned production will be down around $100 million, from upwards of $400 million just three short years ago.
J. Les (Chair): Thank you very much for coming today.
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Our next presenter is from Sport B.C. Tim Gayda is here.
T. Gayda: Good afternoon, everyone. My name is Tim Gayda. I'm the president and CEO for Sport B.C. Prior to taking on this role, I spent nine years of my life working at VANOC running the sport department there. So a strong, healthy sport community in B.C. is definitely near and dear to my heart.
Basically, at Sport B.C. we represent the 64 provincial sport organizations and another 17 sport organizations that oversee sport in this province. It really is these groups that drive sport within B.C. Within these groups, there's another about 700,000 people who participate within that membership in terms of coaches, administrators and athletes. Largely, it's our role, as the umbrella organization, to speak on behalf of our membership. That is one of the reasons why I am here.
It's our core belief that everyone is an athlete and that everyone should have the opportunity to participate in the sports they like as well as compete and that the infrastructure and capacity of our PSOs is there to support them.
We also see sport in this province as a critical tool for moving forward the healthy-living agenda and making sure that British Columbians are active and healthy in their communities.
We would like to thank the government of Canada and the province of B.C., who committed only yesterday to Own the Podium in the Canadian Sport Centre in Whistler. This is obviously one of those things where cooperation has gone a long way to ensure that we see more and more B.C. athletes on the podium in the future.
Because of the games, we're definitely seeing an increased level of interest in sport. One of the things that came out of Australia following the 2000 Sydney Olympics was the lack of commitment to the lower levels of sport to ensure that the capacity was there to take on this increased demand. I think with the commitment from the province of B.C. we're well on our way, but we still have work to do to ensure the capacity within our province is there to support this growth.
Basically, sport is a long-term investment in health care, community, social inclusivity and even childhood education. Organized sport is a major tool not only for building communities but also for lessening the future burden on health care and developing strong, well-adjusted citizens.
Research estimates that inactivity costs the B.C. economy $573 million in health care costs and lost production every year, while increased physical activity through sport aids the prevention of diseases such as cancer, diabetes and heart disease, and contributes to positive mental health by alleviating stress, anxiety and depression.
Sport participation from a young age also provides youth with the opportunity to develop key social skills that last a lifetime, such as a sense of accountability and the capacity to commit to a goal or purpose. For many youth classified as at risk, sport also provides social inclusivity and an outlet to channel their energy in social and beneficial ways.
The announcement of the sport and arts legacy fund for us in the 2010 provincial budget was a huge test to the commitment by this government to healthy living and sport, and we definitely want to thank, on behalf of our membership, for this commitment. As the province moves forward in this results-based funding model, we will continue to work in the sports sector on meeting the objectives of increased sport participation, high-quality performance programming and partnerships in order to build on that legacy.
The two areas that we wanted to come talk to you today about really affect how we operate as the PSOs. Largely, is the funding model when we look at, from a provincial funding model…? We've asked these PSOs for a long-term commitment to meet that funding model, in terms of objectives that they are to meet.
In essence, funding from the provincial level is on a year-to-year basis. The PSOs aren't able to plan long term, and they really are based on each year's funding on what they can operate. So one of the things we would like to put forward to you is to look at different ways to ensure a long-term funding model with a multi-year commitment to funding for the PSOs.
The other thing is, we could do more with more. I think if we look at sport as a means or a tool for the healthy-living agenda, there are a lot of things we can do in terms of getting kids active, getting people into volunteering in sports, building on our coaching and building the capacity of our sector. Even with the funding that we do have, there are PSOs that met the criteria, but there wasn't enough funding to go down to each level of these PSOs. So we're still not meeting the demand, even with the existing criteria.
If you look at a multi-year commitment in terms of what the funding would be to the PSO and letting us do what we do to move the healthy agenda…. I think that is something we from the sports sector would look for you to acknowledge and look at ways to solve that in the coming years.
For us, we wanted to thank you for the support that we do receive. The increased funding that we have received has gone a long way for our sector, and we look forward to working with the ministry on the road ahead.
D. Donaldson (Deputy Chair): Thanks for the presentation. Much of what you talk about is really applicable to the region I live in, because many of our young amateur athletes need support through the provincial
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sports organizations in order to compete on a provincial basis and increase their skills. I'm sure you're aware of that.
The question I had for you is…. I'm not sure if a provincial sport organization like, for instance, Wrestling B.C., where…. What would be your organization's viewpoint on reinstituting the funding that was cut around secondary school sports programs that enable our exceptional students to go down and compete on a more provincial basis?
T. Gayda: For us, if funding in sport as a whole is cut in one sector or another, it definitely impacts the delivery of sport.
I think we're more focused on the PSO, but the in-school sports are just as critical in getting these kids active, definitely, even at an earlier age. We do everything we can for the provincially based sports. They're the ones that really deal directly with the school-based sports.
M. Mungall: Thanks very much for your presentation, and thanks so much for acknowledging that all of us can be athletes.
J. Les (Chair): Improbable as that seems.
M. Mungall: It is; it is. I was always the kid in the art room, but I've got some athletic skill.
Anyhow, my question is around the direct-access B.C. gaming grants. I'm just wondering if any of the provincial sport organizations have accessed those grants in the past and are not able to now. Also, I know that there are a lot of sports organizations, just within my constituency, that have historically accessed those grants and can't now. It really has impacted their ability to deliver programming.
T. Gayda: Yeah. I mean, the PSOs still access those gaming grants. I think the challenge is that it's not harmonized. They have to come through the provincial sport branch in terms of an access grant, but then they also go through the gaming grant. I think the challenge is that it just creates more bureaucracy for the PSO and more work for them to do, and that means less focus on delivering the programs. It's one of those things where we would like to see a harmonized application one day, where it would be group-funded, where there'd be one application to deal with both.
At the lower levels, I can't speak specifically on whether they are unable to apply for grants, but there has been a change. I can't explain what the exact change is, but not everyone is able to apply for those grants as they once were.
D. McRae: I was just looking…. You have 64 provincial sport organizations and 17 other sport organizations. I used to be involved with the BCRU, and friends of mine are involved with Volleyball B.C. and such.
Do you find the competition for resources…? I know that when it comes to fundraising or hiring executive directors, there seem to be a lot of really good-intended individuals out there working for the good of their sport, but the administration is duplicated in so many different ways. Or are you guys, through Sport B.C., moving to help reduce that administration cost and allow them to focus on growing their sport?
T. Gayda: Yeah, that’s one of the things we do. We do provide a lot of back-end support for our members. We do payroll. We do financial accounting. We run the sport campus out in Richmond, where a lot of the sports are housed. Really, we're trying to provide services to them at a reduced rate — whether it's subsidized — so they can get on with doing what they do. A lot of the PSOs don't have the capacity to do a lot of these things. Some do; some don't. Largely, we're there to try to prop up everyone and make sure they're strong so that they can deliver what their core is, which is sport.
D. McRae: Do you assist them in trying not to compete with each other for limited resources?
T. Gayda: They all go through the same process, whether it's with the gaming grants or with the province of B.C. It's based on criteria of where they are as a sport. What they do outside of that, whether it's corporate sponsorship or fundraising, is an area that's left to them, and some are more successful than others. Largely, we're just trying to help them wherever we can. If they do start to compete with each other, it's not really for Sport B.C. to get in the middle of that. Really, they're out there trying to sell their sport, and we're just trying to make them as strong as we can.
J. Les (Chair): Thank you very much, Tim, for coming today. We appreciate it.
Our next presenter is from the Alma Mater Society of UBC Vancouver — Jeremy McElroy.
J. McElroy: Good afternoon. My name is Jeremy McElroy, and I am the vice-president, external, at the AMS at UBC Vancouver. We're the student union on the Point Grey campus. We represent nearly 47,000 students from across the province, throughout Canada and around the world.
Essentially, what we've done with this particular submission this year is taken a look at the last decade and found a few areas where we feel, moving into the next decade, the B.C. government can really improve the life of students. Our mandate is to improve the emotional, social and academic lives of the students we represent, so we have boiled those down to three main areas that
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we're coming before you today to ask your help in enhancing their lives as well.
What we're looking at in the next few years is a massive change. The baby boomer generation is on the brink of retirement, and with that is coming a massive need for skilled workers, for people to come directly into positions that normally took years of tenuring and working your way up the corporate ladder.
Up to 75 percent of all jobs in the next five to ten years will require post-secondary education, and the B.C. government has done a great job in the last few years of opening a number of new institutions, increasing the number of programs available — something like more than 250 programs in the last five years across the province — as well as increasing the number of seats available for post-secondary students.
However, that increase in the number of spaces has increased the demographic of your average student. Unfortunately, the student financial assistance program as well as some of the other supports that we have for students haven't kept up with that.
What we're asking for are a few targeted investments, reviews of the way in which we deal with students — more than 200,000 in the province at this time. The main one that everyone comes to talk to you about, I imagine, is tuition. We're sort of shying away from that today. Instead, we would like to talk about student financial assistance — the StudentAid B.C. program.
I'm sure you've heard testimony already on the nature of the program — the number of students, the way in which funding has been since 2001, the elimination of the grants program in 2006 and the increased costs since then.
What we haven't seen necessarily is, I guess, congruency with the rest of Canada. As each provincial organization has worked to reduce interest rates to increase eligibility, to find new and innovative ways of assisting their students achieve post-secondary education, unfortunately, B.C. hasn't quite kept up.
The first on our list is adjusting the interest rate. In 2009 the province of Newfoundland made all of their student loans completely interest-free. In its wake, the provinces of Alberta, Ontario and Saskatchewan have all reduced their rates as well. In Ontario it's 1 percent plus prime. In Saskatchewan it's 1½ percent.
We feel that at this particular point in B.C., especially with the unique cost of living that is attributed to that and with B.C. students having the highest aggregate debt after graduation of any province in Canada, interest relief is one of the biggest things we can do with current graduates as well as prospective graduates and students who are looking at going to post-secondary in the very near future and getting a bit of sticker shock.
Reduction in interest rate and making it more amenable to taking on that amount of debt, we feel, is something that this government is in a very good position to do at this time and would greatly benefit students.
The second part of that is the repayment assistant plan, which was a federal program initiated in 2009 that most provinces have signed onto. It changes the way in which the repayment period of your student loan works, to be a maximum of 20 percent of your income. Currently B.C. is not part of this. While the interest relief program has been highly effective, it only affects the very small percentage of students that apply and qualify for the program, whereas the repayment assistance program is much wider and is income-based, so to each their own. It's based on their needs at the time.
The second bit about student financial aid that's a bit concerning is that none of the cost-of-living assessments are tied to inflation. As we've seen in B.C., since 2001 there have been massive increases in housing prices, particularly in Vancouver. Tuition has also increased significantly, and so have the costs of transportation. However, those haven't actually been updated in StudentAid B.C.'s cost-of-living assessment.
Additionally, there's no regional difference. A student in Prince George and a student in Vancouver will be given the same maximum amount, even though rent in Prince George is likely half that in the city of Vancouver.
This creates an inequitable program where a student who wants to live in Vancouver and go to school is, unfortunately, capped on the amount that they can spend for rent. With the lowest vacancy rate of any metropolitan city in Canada, Vancouver is one of the hardest places to find a place to live for the $560 that is currently allocated.
What we would like to see is a review of the way in which the cost-of-living assessment is done, to actually reflect current market costs throughout the province as well as to have it be regionally dependent. So depending on which school the student is applying for and the area in which they'd be living, the amount of funds allocated to them corresponds to that.
The last bit on this — and I apologize if I'm taking a bit long; I've never done this before — is eligibility criteria and expected parental contribution. Currently the way in which a student's funds are determined is by first looking at their parents' income and assets. Houses, cars, business ownership are all considered assets and will detract from the amount that a student will receive.
Many families that might be land-rich or own a business but have little to no disposable income will be denied student loans because of that particular asset clause. We feel that's a very easy thing for StudentAid B.C. to go in and adjust and would vastly help students get access to the much-needed funds that their parents don't necessarily have.
As well, since 2001 the cost of education has increased significantly. While in previous decades the expectation
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of a parent contributing significantly to a student's education was definitely within their means, the new costs associated with going to school, especially living away from home, are well outside of most parents' ability.
We don't feel that that should detract from the student's ability as an adult to take out a loan to pursue their own education at that time. So we're asking that the expected parental contribution be decreased and, in the best-case scenario, eliminated if possible.
The last bit. We have two more, I guess, areas that significantly affect students that haven't necessarily been looked at in recent years, the first of which is child care.
The UBC campus runs the largest child care program in the country, of any employer, of any institution: 588 seats. However, the current wait-list is well over 1,600 children. That's approximately a two-year wait for anyone to get on it.
Not only that, but the costs associated with sending a child to one of these facilities is far greater than the actual money that is available. UBC's highly subsidized rate for an infant for full-day care is just over $1,000 a month for students. The current maximum low-income subsidy that the province allocates is $750. So that $400 gap each month is essentially on that particular student-parent to cover, leading to possible deficits of between $2,400 and $3,000, depending on how long their school term is.
In addition to that, StudentAid B.C.'s allocation for child care maxes at $788, so again, there's still that $300 deficit on a monthly basis that parents have to find alternative sources of funding for. We feel it's well within the purview of StudentAid B.C. to increase the maximum to actually reflect the costs associated with sending kids to this program and would greatly ease the burden of finding alternative funding sources on student-parents.
Additionally, since the ending of the early learning program, the federally funded capital project for child care spaces in the province, we've seen increased wait-lists. Since 2006 the number of seats that universities and colleges in B.C. have, have increased. This has lead to a greater number of parents going to back to school to upgrade their education for work purposes.
The fact that child care facilities on most campuses don't exist — and if they do, have significant wait-lists, and if they can get a spot, the costs are outside of their financial means — is a detractor for many student-parents who are thinking about going to full-time studies, oftentimes having to work more and find other, more expensive ways of having their children looked after.
The last area here — and I go into much greater detail than in most of these points — is rapid transit. It's one thing to get into university, and it's another to actually get to university. It's been in the media a lot lately, the idea of a UBC line along the Broadway corridor — rapid transit from the east to the west side of Vancouver. Recently the Metro Vancouver proposal was to relegate it to the bottom of their rapid transit list in their 2040 plan.
Currently there are more bus rides a day — more than 100,000 users along the Broadway corridor — going to the West Broadway business district as well as to UBC, which is more than the Millennium Line and currently more than the Canada Line ridership. So the B-line is handling more passengers than either of those train lines, one of which was created more than ten years ago.
There is more than enough demand along that particular area, and there's only going to be increased demand as housing prices go up in the west side of Vancouver, more development is brought into that area, and students as well as other low-income people are forced to live further and further away from the UBC campus.
At the same time, UBC is developing significantly and bringing more and more unaffiliated people into the west side of Vancouver who want to be connected with the transit network. We feel that this should not supersede the Evergreen line or development south of the Fraser. It should be congruent. We don't want them to be considered in exclusion of each other, because a full, robust transit network will make it better for all students and all people in the Lower Mainland.
We're asking that the province commit to continue with the plans to consider rapid transit along the Broadway corridor as well as to continue with their commitment to the Evergreen line and development south of the Fraser.
J. Les (Chair): Great. We have a number of questions.
M. Mungall: Thanks very much for your presentation. I have a couple of questions. The first is around the student financial aid and the parental contribution in terms of eligibility. How many students, do you know…? Do you have the stat? If you don't know, I'd love it if you could send it to us. How many students have had to turn to the private sector for student loans, not being able to get any public loans because of that particular criterion? I know that in my days in Alberta that was actually extremely common.
Then my second question is around the child care funding. You're the first post-secondary institution student or deliverer to even bring this up, and I think it's a very important point. Obviously, you've identified it as necessary for your student base, but I'm wondering: do you also see this as essential for the B.C. economy because we need to bring people in and retrain them to meet that skills shortage gap that we're anticipating, that's actually occurring right now but is going to be larger in the next few years?
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J. McElroy: The first bit. Approximately 25 percent of all students seek private institution loans, and that number has substantially increased and is only expected to increase. Currently, 38 percent of all students on the Canada student loan program reach the maximum, and that's expected to increase to 50 percent in 2015. That's only with recognized unmet need. As I said, the cost-of-living assessment is far below the actual costs, so many students — approximately a third of all students — are seeking private loans, incurring credit card debt, as well as taking out loans from the bank of mom and dad.
The second question about child care. A report last month was released in Ontario, saying that for every million dollars invested in child care, $2.02 million is added, essentially, to the gross domestic product of that particular province. In addition, for every million dollars, 29 jobs are created, which is 23 percent higher than any other industry. It translates to loss mitigation as well as GDP increases of about $2.42 million for every million invested.
Provinces across Canada are starting to look at the benefits of investing in child care — in particular, having it tied with post-secondary education, as we want parents to go and upgrade their education.
There is massive benefit to the B.C. economy. It's probably the most surefire way of investing — very high returns as well as a massive amount of public good that comes from it.
J. Rustad: Thank you very much for the presentation. A couple of quick questions. One is…. You talked about the student loan rates. I'm just wondering how B.C. default rates on student loans compare to the default rates in some of the other provinces.
The second question. You were talking about the grants around some universities versus other universities because of higher living costs. How do you get away from the politics of preferential universities that could end up being created by having a system that would fund, perhaps, more money for one particular university than for another?
J. McElroy: The first question was in regards to default rates. I don't have the B.C.-specific numbers. I've asked the Canada student loan program to provide those. However, in the 2003-2004 year the default rate nationally was about 28 percent. In 2008 it was 16, and it shows every indication of going down.
That is in great part because a lot of interest reduction and repayment assistance plans that have been introduced in numerous provinces. If B.C. were to join on, we'd see an instant decrease in the default rate as repayment becomes contingent on their income as opposed to sort of a set minimum.
In terms of regional allocation, the Canada Mortage and Housing Corporation does annual audits of the cost of living in each region of the province, different regions across Canada. That's what I've used for the basis of my report here. I feel that if the province were to use that, a third party's audit number, for determining how much it costs in each area, that would be a little bit fairer. In terms of creating a competition between schools, I'm not sure how that would pan out.
D. McRae: Thank you very much, and also thank you very much for the newsletters I get sent every so often from the AMS — a '92-93 grad, many years ago.
One of the questions I have…. We've heard from many organizations, including yours, that basically B.C. has the highest level of student loan debt in the country. I remember that back in my university days the cost of living in Vancouver was the biggest part of my yearly expense, not tuition.
How much of a percentage of the loan would you say is not based on tuition but on actual cost of living in Vancouver? We have very high real estate markets — I think you pointed out — in the Lower Mainland, Victoria and even Kelowna and the Kamloops area compared to places like Regina and Brandon, Manitoba, and maybe some of the maritime areas. Does this skew the student debt load much higher than just the actual tuition?
J. McElroy: It does. Across Canada the easiest one to look at is rent. The Canada student loan program across the country…. Most give approximately $350 a month for rent. In B.C. it's $560, and that falls about $200 short of sort of the average in the Metro Vancouver area.
The cost of living is significantly higher. A report was released yesterday from the Canada Mortgage and Housing council saying that Vancouver is still the most expensive place to live, with approximately 75 percent of a person's income going to their mortgage at this time, based on some aggregate numbers. And for students, that is particularly felt. Especially, low vacancy rates equal significantly higher-than-market cost of living. So B.C.'s debt rate is directly related to the cost of living.
B. Ralston: Thanks very much for your well-researched brief and your knowledgable answers. I had a question just about parental contribution. Are you aware of any studies of the impact of the RESP savings program — the registered educational savings plan — upon parental contribution to higher education fees and living expenses?
J. McElroy: My own personal experience. My parents contributed to it every day from the first 18 years, and that was just enough to cover about three-quarters of my first year of university, including…. It was through the Canada scholarship — CSP. Then we got a dividend each year after that, and that was enough to cover about
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three-quarters of just tuition. Then everything on top of that was money that I had to find elsewhere.
It's a temporary fix. For encouraging students to get into university, I'd imagine that would definitely help, because the first-year price tag is zero with the parents' contribution, but after that a lot of students are going into debt. The number of second-and third-year students that apply for loans versus first-year is significantly higher. As well, most recently approximately a third of all students who are considered dependents don't actually receive any financial assistance from their parents.
D. Donaldson (Deputy Chair): Thanks. Very well presented report. I was curious about the Newfoundland example that you gave around the interest relief. They face many of the same issues we face in B.C. as a government, yet they were able to create that interest relief. When did that happen, and do you have any further information that you could forward to the committee on the impacts of that interest relief that they created?
J. McElroy: Student organizations in Newfoundland have been lobbying for it for a very long time. I'm not sure what exactly the impetus for it was, but in 2009 they eliminated interest completely from loans, so the amount that you borrow is the amount that you pay back. That was a program that they brought about.
That sort of sent a ripple across Canada. Governments started reducing interest rates here and there. The national student loan program is still at 2.5 plus prime. Manitoba is still at 2.5, and so are we.
J. Les (Chair): Okay. Thank you very much, Jeremy, for coming this afternoon. We appreciate your input.
J. McElroy: Thank you for having me, and thank you to Hansard.
J. Les (Chair): We'll now hear from the Building Owners and Managers Association. Paul LaBranche is here. While Paul is making his way up, I'd like to recognize the MLA for Delta South, Vicki Huntington, who has dropped by to check us out and find out what we're doing.
P. LaBranche: I'm Paul LaBranche. Good afternoon. I'm the executive vice-president for the Building Owners and Managers Association, more commonly known as BOMA. BOMA represents the commercial real estate industry and has over 300 corporate real estate and business members who own or manage the majority of office retail and industrial buildings throughout the province.
The commercial real estate industry, through BOMA, has taken a leadership role in transforming existing buildings towards energy efficiency and environmental responsibility. One of our most valuable services is providing green certification standards.
For reasons which I'll explain shortly, we have hit a plateau in the number of new building owners prepared to make the costly investment of lower energy intensity, so we are now seeking government financial support in incentives to accelerate the transformation, specifically among small and medium-sized commercial buildings.
A little background. As part of our effort to green commercial buildings and help the sector meet the government's 2020 energy and carbon targets, BOMA signed a memorandum of understanding with the B.C. government and B.C. Hydro to deliver 531 gigawatt hours of cumulative energy savings by the end of 2014. The MOU establishes a framework to guide our energy conservation and to reduce greenhouse gas emissions in buildings. BOMA is now registered with the Pacific Carbon Trust and will aggregate carbon credits for the industry.
BOMA is working very hard towards environmental certification of all commercial buildings through the industry's award-winning BOMA BESt certification program. I'd like to just explain a little bit about that.
The BOMA BESt program was launched five years ago as a proactive, voluntary approach to recognizing buildings that have achieved an industry-accepted energy and environmental standard. BOMA BESt requires the completion of energy audits for commercial buildings to become certified and provides performance measurement tools so that building owners can reduce energy consumption and operating costs.
Every building applicant must go through a third-party verification and is subject to continuous and progressive achievement. Improved building performance results in higher levels of BESt certification. From the research that we've done, BOMA BESt–certified building towers use 11 percent less energy, 18 percent less water and create 17 percent less waste per year. That's based on a comparison to NRCan national averages.
Over 1,000 buildings across Canada have now achieved BOMA BESt certification. The program was started in B.C. — we have over 200 buildings certified here — and it went national after four years of success in our province.
BOMA has a goal to verify, recognize and track energy consumption for all existing commercial buildings in B.C. To date $65 million in private sector investments have been made for the retrofit and certification of 200 commercial buildings since 2005. But much more can be done.
One of our biggest challenges is the significant investment required to audit properties, update inefficient technologies and improve the energy performance of the building. This is particularly difficult for owners of
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small- and medium-sized office buildings, retail, strip malls and facilities.
I'd like to add here that the new HST is helpful but is insufficient for investment purposes. Although this is not the thrust of our presentation, we wanted to be on record with the committee that our industry is supporting the economic and business benefits of the HST.
Some of the other barriers include the limited human resources and available information to help move energy retrofit projects ahead. So with the help of the provincial government, we hope to reach out to all commercial building owners and encourage them and motivate them to adopt the BOMA BESt standard.
Currently we've been working with the government over the last couple of years on two initiatives to accelerate the greening in existing buildings. The first is the creation of a Work Green B.C. program. The second is a green tax credit initiative.
The Work Green B.C. program is designed to reach out to small- and medium-sized buildings that generally are the high-hanging fruit. BOMA is seeking $15.5 million in government support for the Work Green B.C. program over five years. The Work Green B.C. goal is to reduce 11,000 tonnes of CO2 emissions and to lower energy intensity by 106 gigawatt hours per year by 2015.
Financial support from the province for Work Green B.C. would create needed resources and incentives for another 200 commercial building owners to move forward with retrofits. With a $15.5 million investment from government, we expect to see a $65 million investment from the private sector. The Work Green B.C. program for the commercial sector would complement the successful LiveSmart program that's currently in place for the residential sector.
The Work Green program has five key components. The first is a Work Green energy centre. It's intended to be a one-stop, on-line portal for all building practitioners to access energy and carbon reduction strategies and information. It will be, for example, where the public can determine which buildings are green, and it will help tenants achieve green standards for businesses.
Energy audits. We will offer subsidized on-site energy audits, reports and implementation strategies for small- and medium-sized buildings. We will offer carbon tracking and a program to aggregate carbon credits for the commercial building industry in support of government climate action goals.
The energy reduction initiatives provide financial incentive programs administered by BOMA and tailored to meet the specific needs of small- to medium-sized buildings. Of course, our BOMA BESt certification program is really the engine that drives all of this. That will be our certification program, going forward. With this program put in place, we think we can do for the commercial real estate industry what the LiveSmart program did for the residential side.
The second initiative surrounds the green tax credits for commercial buildings. BOMA B.C. seeks a graduated reduction of property taxes for commercial building tenants that occupy space in BOMA BESt–certified buildings. For every $1,000 that a building owner would invest to become BOMA BESt–certified, we ask the B.C. government to provide $212 in tax relief to achieve a reduction of one metric tonne of greenhouse gas emissions.
More details around our green tax incentive program are in your formal submission. I'll be pleased to answer any questions on those.
In conclusion, I just want to…. I think BOMA recognizes and congratulates the B.C. government for taking a leadership role towards making our future greener for our province. Now is the time for government — and it has an opportunity — to play a vital role in advancing energy efficiency within the commercial real estate industry. Financial incentives as a tool for public policy promote investment in energy efficiency and help to encourage the adoption of more environmentally friendly technology and operating practices.
Both the Work Green B.C. program and our green tax credit proposals have the following long-term benefits to all British Columbians: protecting our environment by conserving energy and reducing greenhouse gas emissions from buildings; investing in the economy by supporting new jobs; economic growth in B.C. through the stimulation of green economy; supporting B.C.'s small businesses by lower operating costs and taxes for business tenants; accelerating the environmental transformation of commercial buildings by making energy efficiency improvements financially attractive to building owners; and finally, improving our workplace environment by implementing environmental standards for British Columbians who work in and visit commercial buildings.
I want to re-emphasize that it's the public that work in and visit our buildings and expect green spaces. I hope you agree.
J. Les (Chair): Thank you very much.
D. Donaldson (Deputy Chair): Thanks very much for the presentation. I apologize in advance if I had missed it in the detailed part of the paper, which is quite extensive. Would your association be in favour, then, of using the taxation from the carbon tax to support, for instance, the $15.5 million grant that you're…?
P. LaBranche: That's one option. It certainly makes sense if you look at the ratio between what businesses pay for the carbon tax…. I think the ratio is that something like 60 percent of the carbon tax comes from businesses
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and 30 percent of that carbon tax comes back. As you know, the carbon tax has to be revenue-neutral by law. So there is an imbalance there.
There are also imbalances in property taxes. One of the things we proposed as an option was the school tax component. That's a component of the property tax that goes right into the provincial general coffers. It's not tied to the school budgets at all, so it's there. I know that the government has provided some credits for some industrial properties in the past through that vehicle, so that's been discussed with their tax department. The carbon one makes a lot of sense.
J. Les (Chair): Anyone else? Seeing no further questions, I guess we're done for today, Paul. Thank you for bringing the detailed submission. There's a lot of material there. Appreciate it very much.
Next we will hear from the Assembly of British Columbia Arts Councils — Joan Richoz.
J. Richoz: Thank you very much. Thanks for coming to Whistler and for allowing me the opportunity to present my recommendations on arts and cultural funding in the province.
My name is Joan Richoz. I'm the past chair of the Whistler Arts Council — still on the board here — and the current president of the Assembly of B.C. Arts Councils. I've been involved in the arts in Whistler and the Sea to Sky corridor for the past 28 years, and I'm deeply concerned about the funding cuts that local and provincial organizations have experienced over the past year.
Historically, B.C. provincial governments have not made arts and culture a significant priority. This current government did, however, take some significant steps in the first parts of its mandate, including increasing funding, creating the Renaissance Fund and setting up the BC150 cultural fund, which is a $150 million endowment that was supposed to provide more stable funding for arts and culture activities.
B.C. artists were proudly showcased at the National Arts Centre in Ottawa in 2009, and in 2010 we impressed the world with the Cultural Olympiad that was integrated into the Winter Games. Here in Whistler, to date, our greatest achievement for the Whistler Arts Council was the co-programming of performances, co-programmed with the resort municipality of Whistler, of Whistler live celebration sites during the Winter Games.
Unfortunately, given the current world economic situation, the return on the BC150 cultural fund investment has been much smaller than expected and has not been as fruitful for arts and cultural organizations. With the additional cuts of the past few years, these organizations are in the worst shape in memory, in terms of government support. Some organizations have folded, and many events and programs have been cancelled indefinitely.
I think we're missing opportunities to invest in the emerging world, where original content, knowledge and creativity are increasingly valued.
Last year's standing committee recommended the restoration of arts funding to previous levels, including an appropriation directly to the B.C. Arts Council, and on behalf of the board of the Assembly of B.C. Arts Councils, I would like to gratefully acknowledge the recommendation. The 2010-2011 budget indeed included an allocation to the B.C. Arts Council, albeit much less than what was recommended.
There's been much in the press lately about the allocation of the $10 million arts and culture legacy fund. This past August the Assembly of B.C. Arts Councils was honoured to be asked to administer $3 million of the fund for the creation of spirit festivals throughout the province, and we know that these resources will greatly assist community arts organizations with their programming in February 2011. The recent allocation of the remaining $7 million to the B.C. Arts Council also helps greatly.
We urge this committee to recommend that the arts and culture legacy fund continue to be allocated to the B.C. Arts Council over the next two years, and we also propose that the legacy fund be used to enhance a restored and stable appropriation for the B.C. Arts Council.
However, the restoration of funds to the B.C. Arts Council is only part of the story. Even after restoring those funds this year, the considerable loss of arts and cultural investment — 60 percent — that was previously available through the B.C. Gaming Commission has still meant an overall cut of over 30 percent to arts and cultural activity in this province.
Gaming cuts greatly impacted my community this past year. In 2008-2009 community groups in Whistler received $313,620 from direct access — groups that include Whistler Arts Council, Whistler Museum and Archives, Whistler Search and Rescue and the parent advisory councils. In 2009-2010 total funding to these organizations was cut by 60 percent, and the Whistler Arts Council was denied its entire request of $40,000. Our funding request to the B.C. Arts Council was also cut by 60 percent, resulting in scaled-back programs and events in our community.
The memorandum of agreement on gaming policy that was signed in 1999 stipulated that a significant portion of gaming funds — one-third — was meant for the purpose of community development such as arts organizations and sports groups. This was one of the ways that the government initially convinced British Columbians to go along with government-sponsored gaming.
However, the current criteria and priorities for direct-access grants have been rewritten to exclude most
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arts and cultural organizations, community-based and professional, which were previously able to access these funds. As a result, many community-based and volunteer-run groups as well as emerging and culturally diverse organizations are left without any support for their work. Some of them fall outside the mandate of the B.C. Arts Council, which is truly a shame since they are essential to a healthy civil society.
Organizations and individuals are still deeply troubled when faced with an uncertain future caused by the recent cuts. What our province needs is stable funding and a renewed vision and plan for arts and culture, including heritage. For the past two years, for instance, B.C. Arts Council funding through a committed appropriation has been cut significantly and then restored later in the year, first through supplementary funds and then through reallocated gaming funds. The uncertainty and instability caused for the B.C. Arts Council and the arts community has made it almost impossible for either to plan forward or fulfil their mandates.
We recommend that a stable and sufficient appropriation of at least $16 million be allocated to the B.C. Arts Council in the upcoming provincial budget. This would provide the council with resources that are equivalent to those provided this year, including the $7 million in legacy funds. We strongly believe that arts and culture have a crucial part to play in the economic, social, environmental, health care and educational future of a British Columbia that is indeed among the best places on earth.
The Assembly of B.C. Arts Councils represents almost 300 member arts and cultural organizations and individuals active throughout the province. This membership has an incredible scope and reach. Our members employ artists and cultural workers in the thousands. They have many thousands of volunteers that have put in hundreds of thousands of hours. They have volunteer boards comprised of citizens from all walks of life, including many influential community and business leaders.
Public investment made by the provincial government through the B.C. Arts Council and through gaming grants in the arts allows community-based arts organizations to leverage money from other sectors. The arts and culture sector represents $5 billion of B.C.'s GDP and over 80,000 jobs. It's a significant economic driver connected to the creative economy.
Despite the obvious contribution of arts and culture to our society, we are seeing organizations shutting their doors, job losses and drastic reductions in programming. In the end it's British Columbians that lose out, as their access to arts and culture is severely affected.
Even though the Standing Committee on Finance and Government Services unanimously recommended restoring the funds to 2008-2009 levels in the lead-up to last March's budget, I would like to point out that in the budget the B.C. Arts Council was cut 53 percent from 2008-2009. This is arm's-length funding. The B.C. Gaming Commission funds for the arts were cut 58 percent from 2008-2009. These programs are also now being defined more narrowly. Most arts and culture organizations are now ineligible for gaming funds.
Total government investment in culture, including the newly announced $10 million annual supplementary fund, was reduced by 32.4 percent from the 2008-2009 budget. At present total arts and cultural funding in B.C. represents 0.1 percent of the province's total $40 billion budget. British Columbia is last in Canada when it comes to contributions to operating grants to arts and cultural organizations — $6.54 per capita as compared to the next lowest province, Alberta, at $20.81 per capita.
We'd like to thank you for your past support and ask you to consider the following four key recommendations: that you support public funding for the not-for-profit arts and cultural sector; that you fully support arts and cultural organizations, including heritage, and community-based organizations and individuals with arm's-length public investment through the B.C. Arts Council — funding that is stable and sufficient to support the council's strategic plan; that you continue to allocate the arts legacy fund of $7 million to the B.C. Arts Council in the next two fiscal years to supplement the council's base appropriation; that you restore the amount of funding for arts and cultural organizations supported through gaming revenues and honour the social contract with British Columbians regarding the expansion of gaming.
Restoring core funding will ensure stability for the hundreds of arts and cultural groups across the province. It will ensure ongoing economic, social and health benefits to our communities and will contribute to the growth of a successful cultural tourism sector.
J. Les (Chair): Thank you, Joan.
J. Thornthwaite: Thank you very much for your presentation. We've had lots of groups that have presented to our committee from the arts and culture community, and several of us have asked a similar question.
Given the fact that some of the gaming grant applications have been rejected because of changes in eligibility, etc., would you prefer that the funding coming from the provincial government go exclusively to the B.C. Arts Council, and let the arm's-length professional delegation of funds come exclusively from them, or from the gaming grant trail that you had referred to here?
J. Richoz: I would see a combination. So the way it was before, B.C. Arts Council gets an appropriation of funding, and they are independent in how they allocate their fund-
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ing. Then the gaming funding is also managed by gaming, because not everybody is eligible for funding from the B.C. Arts Council. So those organizations that cannot get B.C. Arts Council funding often can get the gaming funding. So I would say a combination of the two.
B. Ralston: You mentioned that the Assembly of B.C. Arts Councils was asked to administer the fund for the creation of the spirit festivals.
J. Richoz: Yes.
B. Ralston: I appreciate that this probably involves some diplomacy on your part, but we have heard from other groups that, in their view, the criteria for qualifying for that money is fairly narrow and excludes a number of groups that would otherwise be making an application and hoping to access those funds. Do you have any comment on that?
J. Richoz: Well, just to say that that $3 million is going to support community arts organizations. Anecdotally, I know that those smaller rural arts organizations are usually entirely volunteer-run. Any of these cuts impact them hugely. So the opportunity to get some more funding to create a festival or to build on a festival that they already have, that's happening in February or at another time of the year…. I think it's a win-win situation for those organizations.
Certainly, there are some organizations that won't be eligible for those funds, but with the B.C. Arts Council now being able to manage the other $7 million, I'm confident that those organizations that aren't eligible for the spirit festival money would be able to apply to the B.C. Arts Council.
D. McRae: Are you familiar with an organization called the Arts Research Monitor?
J. Richoz: Arts Research Monitor? Is it a federal research…? It sounds familiar. I don't know if I've read reports.
D. McRae: Well, I just want to preface. I'm a big supporter of the arts and culture, and I'd like to see more dollars go in. But one of the things that we see at this committee oftentimes is the fact that we are spending $6.54 per capita as compared to Alberta. You know, it is lower per capita in that way.
The Arts Research Monitor says that in British Columbia, when you look at all levels of government, we actually spend $194 per person in British Columbia on arts and culture. Now, maybe that's still not enough, but the reality is that how we delegate our dollars provincially, federally and municipally might be a little bit different if we just look at it on that level.
I don't know how the municipalities contribute to arts in other jurisdictions. For that reason, I'm a little curious as to how that would level the playing field or not. So if you could provide some information — not today, necessarily — about…. When you take all three levels of government into arts funding, does B.C. really stand far below the rest?
J. Richoz: I can speak from the Whistler Arts Council and other arts councils that I know of. In terms of municipal funding, what the B.C. Arts Council has done in the past is match municipal funding up to, I believe, $5,000. Most organizations do not get more than that $5,000.
In Whistler we're really fortunate. Our municipality has been very supportive, so we do get more than that. Most arts councils in the province would not get more than $5,000 from their municipal government.
In terms of federal funding, the kinds of grants that are available are through Canadian Heritage. I know from having worked on the grant applications that most small arts councils are just not up to the task of applying for Canadian Heritage funding. It's about a 40-page application. These are usually volunteers who just don't have the time and the expertise for completing those applications.
There is some other federal funding available as well, but that's sort of the main one. That covers things like performance series and things like that. Really, in British Columbia most arts councils are looking to the province for the bulk of their funding. But I will try to get you how those numbers work.
J. Rustad: Thanks very much for your presentation.
Being somebody who has been quite involved in arts myself over time, I'd want to relate a brief story and then ask a question associated with it.
Some of the community arts groups that have been around for a long period of time often are very successful, and they get a lot of very talented people that come through them. Often those talented people go out and form their own arts organizations. So you end up with one organization that's very strong, and then you might end up with three or four or five other organizations that are kind of spawned from it.
Ultimately what ends up happening…. In the case in Prince George, where I was involved in a theatre workshop society, all these other groups that went out — incredibly talented people and stuff — ended up basically taking away the talent pool from the parent organization that spawned them, which ended up causing its failure.
What I'm wondering is: with all of these proliferations of other groups that go out, that want to get out and start, how do you decide as an arts council who you support and who you don't in terms of the organizations that
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may go out and go off on their own and split up and create those kinds of challenges?
J. Richoz: I wouldn't speak on behalf of the assembly because we're not really a granting organization, although we are going to be administering the legacy fund. I can speak from my experience on the Whistler Arts Council. We are an umbrella organization, but we do most of the arts and cultural programming in Whistler. We have quite a few member groups — organizations like the Whistler Film Festival, the Whistler Writers Group, the Whistler Museum and Archives.
We support them, certainly to the best of our ability, through all our marketing and just moral support. In terms of funding, we give member group grants. Our total allocations are about $3,000 or $4,000 a year to the groups in Whistler.
I think every community…. Sometimes there are conflicts for those sponsorship dollars. In Whistler, because we're a younger community, we need a lot of infrastructure, so everybody's asking businesses and business people all the time for money. But I wouldn't say that we have any hard feelings among the non-profits in Whistler that are sometimes asking the same people for funding. They're eligible, some of them, to ask for provincial government funding as well as municipal funding.
We work really, really well together here in Whistler. We've forged great partnerships with Tourism Whistler, with the municipality and with our member groups. We jointly produce things like Whistler Winter Arts Festival, which was formerly Celebration 2010 leading up to the games. Here it works really well, but I think each community is different and has a different dynamic.
I don't know if I answered your question.
B. Routley: Thank you for your presentation. You talked about the fact that some organizations have folded and some programs cancelled indefinitely. Can you give us some examples of that? Do you have any idea or estimate of the kind of numbers of jobs that have been lost as a result of this? That might be difficult to come up with.
J. Richoz: The assembly did. We did survey our members last fall when the gaming cuts were announced. We didn't have a huge response, so I wouldn't really want to use those numbers, but I know of organizations that have had to lay off staff.
I know of events, like the Vancouver Island Children's Festival, which did not happen this year. They could not put on that event. Another arts council on Vancouver Island lost about 20 percent of their budget, and that meant laying off one of their staff. Another organization had four staff, and now it's got two. It's mostly anecdotal information.
We're hoping to be able to survey our members and get more information, but right now we don't really have the total impact of the cuts. I mean, every arts council that I talk to has suffered from the cuts. They've either completely cut a program or really scaled it back.
J. Les (Chair): Thank you very much, Joan. I appreciate you coming this afternoon.
Next we will hear from the B.C. Association of Farmers Markets. We have Elizabeth Quinn and Jon Bell.
E. Quinn: Here we have Jon Bell. He's one of the directors of the B.C. Association of Farmers Markets, and I'm the manager. This is the first time we've ever come before the Standing Committee on Finance.
J. Les (Chair): It's about time you showed up.
E. Quinn: I know.
B. Ralston: We've been waiting.
E. Quinn: Thank you. I heard we would be received positively. It's a good-news story. Farmers markets are a good-news story.
I'm with the B.C. Association of Farmers Markets, and we appreciate the opportunity for input into your budget. We represent over 100 farmers markets in the province, and we have 3,000 vendors and 1,000 farmers, small-scale farmers from across B.C. who make, bake or grow the products they sell at the farmers market.
In 2006 we had an economic impact study done by UNBC, and it revealed that farmers markets generated $65 million in direct sales and a combined economic impact of over $116 million in all of your small communities where you live.
The theme of this year's budget is "Building B.C. for your family." In 2000 there were 60 markets and now there are over 125 markets, demonstrating the growth and popularity of farmers markets in all regions of B.C. In 2009 approximately 175,000 consumers shopped at farmers markets for a total of four million visits. These consumers represent families, households. Using the provincial multiplier of 2.5 persons per household, over half a million people benefit directly from their local farmers market.
Today farmers markets benefit families and the B.C. economy, supporting food security by creating a demand for locally grown food, providing fresh, healthy fruits and vegetables for 175,000 families, generating economic benefits to rural and remote communities. Direct sales provide retail prices to farmers who have recently experienced negative farm income — you're from farming communities, so you know about that — providing markets for 2,000 small business owners in addition to farmers.
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Farmers markets impact human health and well-being for consumers and the farmer. Many consumers want to know the source of their food, who grew it and how safe it is. Small farms, often near urban centres, benefit from that extra cash flow and pride in producing a good and valued product. People are complimenting farmers all the time at farmers markets, and it helps them get through the rainy seasons.
Elsewhere in Canada farmers markets are receiving assistance to secure permanent locations and development initiatives. The province of Nova Scotia, in partnership, recently gave Halifax farmers markets $2¼ million towards a permanent location.
With support, the BCAFM has worked with B.C. Health to create a MarketSafe program, similar to FoodSafe, to ensure the public is purchasing products that are safe for all. We have room for improvement. For example, per capita spending in Ontario at farmers markets on locally grown food is $46 per person, whereas in B.C. it's only $18 per person.
A 2½-fold increase to Ontario consumer spending levels at local B.C. markets would be approximately $100 million kept in B.C., not going to foreign countries to pay for imports into B.C. — an admirable goal for B.C. consumers to reach the federal food guide serving per day of up to ten servings of fruits and vegetables and two to three servings of meat and alternatives.
B.C. families would then be supporting the tree fruit growers, the cattlemen, the dairy industry, the vegetable growers and the poultry producers by buying their products through local farmers markets. Markets provide a location for bridging the urban-rural divide and help consumers learn about food and reconnect with producers.
In the 2006 census 45 percent of farmers were over 55 years old. With those farmers approaching 60 and wanting to retire, young farmers of small agriculture are filling the gap and need a marketing channel, such as a farmers market, to maximize their return.
I'm concerned too. Who's going to grow our food? All these people are going to be retiring. It is an issue, and I think it's important that we get the word out. That's why I wanted to mention it to you today, because some of you may not know that.
Most farmers markets are non-profit societies with underfunded staff or completely volunteer-run. Unfortunately, most markets in B.C. have the uncertainly of temporary locations with little assistance from any level of government.
Another thing that I want to say is that if you will go to farmers markets, they go: "This is great. These are working." They have a really good feeling at the farmers market, but many of them are hanging on by their fingernails, and they are losing their locations. They have to move, and it's very disruptive. It's really a message that I want to convey. Farmers markets do need permanent locations, and any help you can offer is appreciated.
A goal from the provincial strategic plan for the next ten years is to lead the way in North America in healthy living and physical fitness. Farmers markets are hubs of health and community. This is their…. The number one reason why people shop at farmers markets is for fruits and vegetables that are fresher, healthier, tastier than imported products that are picked when not optimum and jet-lagged by the time they reach the consumer.
Many B.C.'ers are unaware of proper nutrition, are overweight and lack skills to prepare food and so are taxing our health care budget with diet-related risk factors. BCAFM, with the assistance of the B.C. Ministry of Housing and Social Development, trialled a farmers market nutrition coupon program to assist those in need to obtain fresh food. We did this in 16 communities, and some of them were in the north — in Smithers, Fort St. James. The public benefited by having access to fresh food, and farmers also benefited with the additional sales.
Other activities have been chefs demonstrating cooking skills at farmers markets, using the available products of that day. Our involvement bridging between consumers and farmers has been recognized by the Better Business Bureau with an award of Advancing Marketplace Trust in 2009. Trust is a very important aspect of what farmers markets convey. Trust is a big word.
Farmers markets address many of the goals of the B.C. agriculture plan by creating new local markets for agriculture, but we have room for improvement as over 30 percent of consumers still need more information on how to access local food. For some reason, people are out of touch. They can't even figure out how to find local food.
A thousand small-scale B.C. farmers currently use farmers markets as part of their marketing mix, receiving retail prices for their product. That's a lot more, so that's something to know.
In response to your question, "What are your priorities if government had additional resources?" we provide the following. Invest in what's working, such as farmers markets as hubs of health. Support partnerships to allow markets to establish secure and permanent locations — like here at UBCM, talk to the municipal people and work together to have permanent locations.
Fund the Ministry of Agriculture to ensure that they can implement the agriculture plan. It's great to have plans, but if there is no money, then they can't follow through. There's a lot of good faith with the Ministry of Agriculture, so we want to support them.
Allocate health care funding increasingly toward nutrition education to increase the consumption of B.C. fruits and vegetables. Gradual provincial debt reduction. Maintain taxation levels.
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We appreciate your efforts to consult us. Our hope is that you will support and help improve what's working, such as B.C. farmers markets, keeping B.C. food on B.C. plates.
J. Les (Chair): Thank you very much.
M. Mungall: A couple of questions. Thank you for your presentation.
First, I'm wondering if you're talking to local municipalities, because we might have chit-chat conversations with mayors and councillors; however, I would encourage you to have a very strong campaign geared towards local municipalities for permanent locations. I know that the success of a permanent location in my community of Nelson is very beneficial. I just wanted to put that back to you. Rather than relying on us, it's more powerful when it comes from your members.
My question around your presentation is also…. I noticed that your recommendation didn't quite specifically say a Buy B.C. program, although it kind of danced around it. I'm wondering if you would support a Buy B.C. program in this province or a reinstatement of it.
E. Quinn: Absolutely. It was in my presentation, but it was getting so long that I would have been here for too long. We want you to support the Buy B.C. program for sure.
J. Thornthwaite: Thank you very much for your presentation. As a dietitian in my past life, I'm very familiar with the benefits of farmers markets and was involved in the first East Vancouver farmers market way back. I won't tell you how long.
Anyway, my question just gets from what Michelle had mentioned about trying to get to the municipalities themselves to get a permanent location. What have you thought about contacting schools or school boards as far as their land, given the fact that you are probably doing these on weekends, and a lot of schools are empty? The land is sitting there waiting.
E. Quinn: That's a great idea. What we've done is we presented to the UBCM last year, and we had standing room only. We had crowds of councillors and a few mayors come to our presentation. They were very receptive, but we haven't approached the school boards about permanent locations. It's a good idea.
J. van Dongen: First of all, congratulations on the success you've had. I know that people in farmers markets work very hard.
You mentioned some health aspects of farmers markets, and I just wanted to check. Are you enjoying good relationships with the health authorities? I know that on and off there have been certain issues. Do you have good working relationships in each of the local health authorities?
E. Quinn: Right now we're on a steering committee for MarketSafe with the B.C. Centre for Disease Control and the health authorities. So we have this new MarketSafe program, and we did it in partnership with B.C. Health.
We meet every year with the head of the B.C. Centre for Disease Control for input into the health guidelines for farmers markets.
J. van Dongen: And you are comfortable that it's a realistic, achievable program in terms of…?
E. Quinn: MarketSafe?
J. van Dongen: Yeah.
E. Quinn: Yes, I feel confident. It's already in the north. It's already being…. B.C. Health is already offering the program for $20 to as many people as are interested in taking it.
J. Bell: If I could make a comment on that. When we were developing the MarketSafe program, we gathered and we had people from various regional health areas and farmers — people who were actually on the ground, if you will, selling — and we worked out a lot of those issues then and there before that program got developed.
They worked with the farmers on this program, so I think it has been really good in that we got rid of some unreasonable expectations. I think it has worked quite well, yes.
B. Ralston: Thanks very much. I was just looking at your leaflet, and in the back here it says that you have a partnership with Save-On Foods, Overwaitea Foods and Cooper's Foods. It seems a little surprising, as I thought you might have been seen as competitors. Can you just explain what the nature of the partnership is?
E. Quinn: When I approached them, they thought: "You're our competition." But then I explained that it is all about supporting B.C. farmers. So it took them quite a while to warm up to the idea, but once they saw…. It was the big picture — supporting farmers, supporting B.C. — and Overwaitea and Save-On Foods pride themselves as being a B.C. company. They do support the B.C. cattlemen by buying and selling their Western Family brand of meat.
What they're helping us on is to promote Farmers Appreciation Week. So we had that last week, and we piloted the program in Kelowna. Minister Thomson was there. It was such a great, warm, heartwarming event. One woman farmer cried because, she said, it has been so hard
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for the last ten years. She is finally feeling supported. One person said that it was like a random act of kindness.
Save-On Foods was there too, which was…. We were wondering how it was going to go with the vendors, who are a certain kind of people. Anyway, it was great, and they are hoping it's going to expand.
The initiative is all about marketing farmers markets in B.C., because we have not been able to get any money to help promote farmers markets. The Buy B.C. program hasn't been funded. There's all this…. People want local food, and there's no money around to promote it. So Overwaitea is helping us. They gave us a $50,000 grant, and they publicized the event in Kelowna. We're hoping it's going to expand throughout B.C. But they did see us as competitors. Now it's good for business. That's what they're saying.
J. Les (Chair): Excellent. Thank you for coming, and do come again.
Our final presentation this afternoon is from Wendy Pattenden from the Canadian Sport Centre Pacific.
W. Pattenden: Hi, everyone. Good afternoon, and thanks for having me today. I am handing out the notes there that I'll be speaking to.
My name is Wendy Pattenden, and I'm the CEO of the Canadian Sport Centre Pacific. We're a not-for-profit organization operating in British Columbia with a mandate to deliver on the sport excellence policies of the governments of Canada and British Columbia. We work to ensure athletes and coaches have every advantage to compete on the world stage. We are what we like to call the pit crew or the team behind the team, providing world-class services ranging from sport science and innovation to life and career services for athletes and coaches training here in British Columbia.
I would like to start by saying thank you for your continued investment in sport. The sport and arts legacy fund speaks volumes to this government's commitment to ensuring B.C. leads the nation as a culture that values sport excellence and, most importantly, sport as a vehicle for health promotion and prevention.
Canadian Sport Centre Pacific is a very proud member of the B.C. Sport Alliance, a group of organizations here in B.C. that are working to simplify the sport system and maximize our impact while aligning sport with healthy living outcomes.
Just seven months ago the Olympic and Paralympic cauldron was lit, marking the beginning of a new era for sport in Canada. We experienced the power of sport in our homes, huddled over our televisions, in the streets celebrating with our fellow citizens and for some, live and in person.
Sport has the power to unite communities and break down social barriers. Sport and sport hosting has great economic benefit, as we've seen here in British Columbia, and sport has the power to inspire people to pursue excellence and live a healthier lifestyle.
We believe that high-performance sport is a key part of this continuum. Our Olympic and Paralympic athletes are vivid examples of excellence, and I am certain many dreams were born in young Canadians during the games. It is paramount that Canadian Sport Centre Pacific is armed to capitalize on the momentum built by the 2010 games and carry it into our mission in London in 2012 and Sochi in 2014.
We plan to build on the success of our summer athletes' performance in Beijing, where B.C. athletes represented 40 percent of the Canadian team and brought home 40 percent of the medals for Canada. That's a staggering statistic when you think of that in terms of our province in relation to our population base.
Canada is building a tradition of excellence, and British Columbia is certainly leading the way. To maintain our growth and improvement, it is imperative athletes and coaches have access to world-class daily training environments that encompass strength and conditioning, sport-specific training, physiological testing, sport science and technology and rehabilitation options like hydrotherapy and massage.
Thanks to facility partners like the Pacific Institute for Sport Excellence in Victoria, the new Whistler Athletes Centre we just opened yesterday here just down the street at Cheakamus Crossing, the Charles Jago Northern Sport Centre in Prince George, the new Enerplex in Fort St. John and the Tournament Capital Centre in Kamloops, to name a few, B.C. athletes are finally able to access the support they need to succeed.
British Columbians need more places to play and train to support our quest to become the healthiest jurisdiction to host the Olympic and Paralympic Games, and your support has been invaluable in ensuring this happens. Such facilities are undoubtedly the heart of every community. I encourage you to consider establishing a sport infrastructure fund.
The natural resources available in B.C. are staggering, yet their potential has not yet been fulfilled. For example, our winter sports travel the globe in search of snow in the shoulder months of B.C.'s winter, yet British Columbia has the best glaciers in the world. Every fall up to 60 alpine teams from all over the world train at Mount Hood in Washington, yet B.C. is home to the Farnham Glacier, Horseman Glacier and the most magnificent glacier. We could adopt this type of hosting strategy to drive the sport economy here in British Columbia. Sport-specific innovations could also drive sport hosting in B.C.
For example, we're working to develop a world-class technologically advanced dry-land start and jump facility equipped with the latest sensors and analysis tools to provide all-weather training and real-time feedback for
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our sliders, snowboarders, skiers and their coaches right here in Whistler. I know that's a lot of technical jargon; I apologize for that. If you think of the start gates and getting out of that start gate as fast as you can, that's the difference between gold, silver and bronze.
If we had this type of start facility that's on dry land, we could train and we'd gain a competitive advantage against our international peers. That's what we're talking about here in Whistler at the Whistler Athletes Centre. It's never been done anywhere in the world. This would set British Columbia apart from the rest of the world.
It is also imperative that we engage communities throughout the province to get involved in supporting sport development. The development of an athlete relies on teaching strong fundamental athletic skills, physical literacy, at appropriate stages. This would support athlete retention by offering a more valuable sport experience and reduced injuries throughout one's sporting career.
The Canadian sport for life framework outlines these stages, which are based on physical development rather than chronological age. Sports are creating programming in line with this framework, and the Canadian Sport Centre, in partnership with the PacificSport centres around the province, is developing a program to address the gaps in this athlete development model.
We plan to roll out an athletic development program based on the fundamental skills every athlete needs. Perhaps most importantly, we plan to reach each region in British Columbia so that every child in this province has the opportunity to succeed in sport at any level.
To make this program a reality and to maximize its reach, partnerships with municipalities are essential. It takes a community to build a champion, and we aim to leverage provincial investment to engage community support of this program in ways such as access to facilities, registration support and financial investment or value in-kind.
Another major target for Canadian Sport Centre in 2010-11 is to maximize our opportunities to integrate sport with other sectors in British Columbia. From innovation and technology to health and education, sport offers many opportunities to maximize British Columbia's impact. Sport can be used as a vehicle by other ministries to influence outcomes and achieve priorities. It is well known that active youth achieve higher marks in school. A healthy body is a healthy mind. Children who are involved in sport are also less likely to participate in illegal activities or get involved in drugs.
Sport innovation has also proven to be an excellent cross-sector avenue offering opportunities for the technology and health industries to benefit from sport findings. We partnered with Camosun College a few years to develop the Sport Innovation Centre, SPIN, in Victoria, which has gone on to research and develop a number of products — for example, the thermo blazer. That's a cooling vest that you wear and that has gel packs built into it.
This was developed to aid our athletes in the hot summer as they were preparing for Athens. However, it's very applicable, we've found, for patients that have multiple sclerosis. It has actually been able to move out of the sport — sort of an applied use — into a health-applicable use as they're dealing with hot weather and heat in the summer.
Canadian Sport Centre Pacific is funded to deliver sports services, yet we work to promote a culture of innovation amongst the scientists on staff to ensure that our athletes are supported with leading-edge knowledge and technology to maintain a competitive advantage. We are recognized as a lead technical agency for sport in Canada, despite the lack of direct funding for innovation. With further support in this area we would not only raise the bar for sport performance in B.C. but have capacity to maximize synergies with the technology and innovation sector and further drive the sport economy.
British Columbia is a leader in Canada when it comes to recognizing the power of sport and investing in a culture of excellence. Thank you for your continued support for sport. Together we will continue to help athletes win medals for Canada and inspire our citizens to pursue excellence in their own lives.
J. Les (Chair): Thank you very much, Wendy.
M. Mungall: Thanks, Wendy. What we hear often from other sectors that present is the economic impact that their sector provides to British Columbia. You do mention the sports economy. I'm wondering if you have any information about the economic impact.
W. Pattenden: There's a lot of that available. I apologize. I didn't bring it with me today. Certainly, sport hosting, hosting events, capitals…. What I was talking about here was actually bringing in that international audience in terms of training. But I can certainly provide it to the committee.
J. Les (Chair): Anybody else?
I don't see anybody else, so thank you, Wendy, for coming and making your very good presentation.
I'm not aware that anyone else would like to make a presentation. With that, then, that concludes our hearing for today. We will reconvene next week, about 2:30 in the afternoon, in Fort St. John. See you there.
The committee adjourned at 3:51 p.m.
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