2011 Legislative Session: Third Session, 39th Parliament

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

Thursday, September 15, 2011

10 a.m.

1300-1500 Conference Rooms

SFU Segal Graduate School, Vancouver, B.C.

Present: Rob Howard, MLA (Chair); Doug Donaldson, MLA (Deputy Chair); Bill Bennett, MLA;
Mable Elmore, MLA; Dave S. Hayer, MLA; Pat Pimm, MLA; Bruce Ralston, MLA; Bill Routley, MLA;
Dr. Moira Stilwell, MLA; Jane Thornthwaite, MLA.

1. The Chair called the Committee to order at 10:02 a.m.

2. Opening statements by Rob Howard, MLA, Chair.

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

4. The Committee recessed from 12:51 to 1:53 p.m.

5. The Committee recessed from 4:19 p.m. to 4:30 p.m.

6. The Committee adjourned at 6:49 p.m. to the call of the Chair.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Finance and Government Services

Thursday, September 15, 2011

Issue No. 43

ISSN 1499-4178

[ Page 1193 ]

THURSDAY, SEPTEMBER 15, 2011

The committee met at 10:02 a.m.

[R. Howard in the chair.]

R. Howard (Chair): Good afternoon, everyone. My name is Rob Howard. I'm the MLA for Richmond Centre and Chair of this parliamentary committee. I'd like to welcome everyone in the audience and thank you for taking time to participate in this important process.

Each year, in preparation for next year's budget, the Minister of Finance releases a budget consultation paper which guides the committee's annual consultation process. The budget consultation paper presents a current fiscal and economic forecast. It also identifies key issues that need to be addressed in the next budget.

On a backdrop of global economic challenges, especially in Europe and the States, we see evidence that governments who have not been fiscally responsible are being punished. We have maintained our triple-A credit rating in British Columbia, and we are committed to balancing our budget in fiscal 2013-2014. We believe this serves us well to protect and grow our job base.

Print copies of the Budget 2012 consultation paper are available on the information table at the back of the room.

The Select Standing Committee on Finance and Government Services is the parliamentary committee which is responsible to conduct public consultations on the forthcoming provincial budget. Our all-party committee is required to report back to the Legislative Assembly no later than November 15 of this year.

This year we will hold 13 public hearings in each region of the province. We've also scheduled two video conference sessions to hear from residents of eight rural communities living in more remote areas of B.C. This is the third time we have tried this consultation method.

Vancouver is our first public hearing this year. Next week we travel to Fort Nelson, Smithers, Prince George, Williams Lake, Kamloops and Courtenay before returning to Victoria. In the weeks that follow we will also be meeting in Surrey, Chilliwack, Cranbrook, Kelowna and end off our tour in Richmond.

In addition to the public hearings, there are a wide variety of other ways that British Columbians can share their ideas with us. We accept written submissions by letter or mail and also video or audio files. Further information on how you may participate using one of these methods is available on our website, www.leg.bc.ca/budgetconsultations.

Committee members carefully consider all the public input we receive, whether it's an oral presentation made here today, an on-line survey form, a submission in writing or an audio or video clip. Our deadline to receive submissions is Friday, October 14.

At today's meeting each presenter may speak for ten minutes, with up to five additional minutes allotted for members' questions. The Chair will endeavour to give you a warning at ten minutes, and you can decide whether you want to keep speaking or use that time for questions. I'll also try and remind you with about one minute left so you'll have an opportunity to wrap up.

Time permitting, we may also have an open-mike session near the end of the hearing with five minutes allocated for each presentation. If you would like to register for an open-mike spot, please check with Arlene at the information table at the back of the room.

Today's meeting is a public meeting which will be recorded and transcribed by Hansard Services. A copy of this transcript, along with the minutes of the meeting, will be printed and will be made available on the committee's website. In addition to the meeting transcript, a live audio webcast of this meeting is also produced and available on the committee's 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 committee's website.

[1005]

I'll now ask the members of the Finance Committee to introduce themselves. I'll start on my far right-hand side. I'll go back and forth if I can.

B. Bennett: I'm Bill Bennett, the MLA for Kootenay East.

B. Routley: Bill Routley, MLA for the Cowichan Valley.

P. Pimm: Pat Pimm, MLA from Peace River North.

M. Elmore: Mable Elmore, MLA for Vancouver-Kensington.

J. Thornthwaite: Jane Thornthwaite, MLA, North Vancouver–Seymour.

B. Ralston: Bruce Ralston, MLA, Surrey-Whalley.

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

D. Donaldson (Deputy Chair): Doug Donaldson, Deputy Chair of the committee; MLA, Stikine. Good to see you guys again.

M. Stilwell: Moira Stilwell, MLA, Vancouver-Langara.

R. Howard (Chair): Also joining us today, I'm pleased to introduce our Clerk. Susan Sourial, is with us today. Also with us are Kate Ryan-Lloyd, our Deputy Clerk and Clerk of Committees. Kate is at the back of the room.
[ Page 1194 ]

Arlene Carlson is staffing the registration desk. Hello, Arlene.

Hansard Services staff Michael Baer and Monique Goffinet Miller are with us today manning the audio equipment, and they will record and prepare the written transcript of this meeting.

With that, I'd like to call our first witness. We have Mr. David Mirhady and Robert Clift from the Confederation of University Faculty Associations of British Columbia.

Welcome, gentlemen.

D. Donaldson (Deputy Chair): Mr. Chair, I have a point of order before we begin.

R. Howard (Chair): Yes, Member.

Attendance of Finance Minister

D. Donaldson (Deputy Chair): I just wanted to, before we begin the proceedings, for the record, register our disappointment, as the members of the committee for the Official Opposition, that the Finance Minister is not here to speak to his budget document, as is tradition and as has been the protocol in the past.

Both former Finance Minister Hansen addressed this committee before proceedings began and former Finance Minister Taylor addressed this committee before deliberations began on the budget document that came from the Finance Minister. So we're disappointed that he's not there to give us direction on this process that's framed by this budget document and that we don't have the opportunity to ask questions to clarify what some of the assertions are in the budget document.

We would like to give the Chair the opportunity to put on the record why the Finance Minister has not been able to address this committee, with the considerable lead time that has been given around the schedule.

R. Howard (Chair):Thank you, Member. I appreciate the opportunity.

I guess I would first say that there's not a requirement for the Minister of Finance to be with us today. The Finance Minister doesn't always make it to these first hearings. I understand he's got lots of challenges. But he is well represented here in his documentation, and the budget consultation paper sets out well the challenges at hand in our listening exercise here.

B. Ralston: I've been on the committee for six…. This is the sixth year. Every Finance Minister has come to the committee, regardless of their schedule. It's an important legislative process, and frankly, I think it's really very surprising that the minister can't find the time to address this committee on this important consultation process, given that his predecessors over the last six years have always found the time to do so.

D. Hayer: Chair, my understanding is that, actually, the Finance Minister is on his way to Ottawa today. That's why he couldn't be here today. I was asking one of his staff if he was coming here, and then he said: "Look, he's flying to Ottawa. They're dealing with the budget issues and HST and GST-PST issues."

R. Howard (Chair): Thank you.

With that, we will call our first witnesses, David Mirhady and Robert Clift from the Confederation of University Faculty Associations of British Columbia.

Welcome, gentlemen.

Presentations

D. Mirhady: Good morning, and thank you for the opportunity to present to you in person. My name is Dr. David Mirhady. I'm the president of CUFABC and chair of the department of humanities at Simon Fraser University.

With me is Robert Clift, our executive director and also a doctoral candidate in higher-education policy at UBC.

CUFABC represents 4,600 professors, librarians and instructors at B.C.'s five doctoral and research universities: UBC, SFU, UVic, UNBC and Royal Roads.

Our purposes are to promote the quality of higher education and research in B.C. and to advocate for the interests of our members.

[1010]

Our organization will celebrate its 40th anniversary in the coming year, and we are proud to have been agents of change in B.C. higher education and research throughout our history.

B.C.'s universities are multifaceted institutions. Their mission is to provide instruction to undergraduate and graduate students in all fields of knowledge, to conduct original research and to enrich the knowledge, skills and resources that support the social and economic development of our province.

Reflecting these aspects of our mission, we've chosen this morning to focus on three areas: support for graduate students, ensuring a strong fiscal foundation for our universities and improving student access.

First, the fiscal context. We appreciate the difficult fiscal and economic situation you have before you. We also know that the Premier will soon be rolling out her plans for job creation in the province, and we hope that there will be a significant educational component in those plans.

As a province we must be competitive to attract outside investment, but that means more than just low tax rates. We must also be competitive in providing the skills, knowledge and social cohesion necessary for social and economic growth. This means that we must invest in people and in our knowledge infrastructure so that our
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citizens can become more capable, more adaptable and our industries more innovative. These are not short-term investments, nor are they investments that can or should be turned off and on like a spigot. What we propose to you today are long-term, structural investments.

First, graduate fellowships. British Columbia is currently at a competitive disadvantage when it comes to recruiting top graduate students. Whether we are trying to keep British Columbians at home or recruit top students from elsewhere in Canada or abroad, we are hampered by insufficient financial support for graduate students. Our universities do the best they can by offering some scholarships from internal funds, and faculty members with substantial research grants can hire graduate students to work with them. But unlike Ontario, Quebec, Manitoba and Alberta, British Columbia does not have a provincial fellowship program to attract and retain top graduate students.

These students are a necessary part of the knowledge infrastructure of the province. They assist professors in their work, and they bring new ideas and energy into our classrooms, labs and research institutes. Many of them will remain in British Columbia to become the next generation of professors, researchers, highly skilled employees, entrepreneurs, innovators and leaders. A program comparable to Alberta's would see 1,000 graduate students a year receive a B.C. graduate fellowship of $15,000, for a total cost of $15 million annually.

Operational funds. Every year that funding for higher education is frozen, our effective purchasing power falls by the rate of inflation. The so-called protection offered by a funding freeze may mean a slower rate of decline than other areas of government spending, but it is still an indirect cut. These funding cuts cannot be accommodated by further imagined efficiencies. The universities' quality and effectiveness are being diminished each year in order to balance the books. Rather than developing ways to teach students more effectively, we develop ways to do so more cheaply. Instead of pursuing research to advance knowledge, we pursue research contracts to bring in money.

Our members have also made sacrifices. Partial results from a survey of university faculty members currently in progress indicate that two-thirds of faculty members have increased their workloads over the past five years. An analysis we've prepared of the effects of PSEC's wage controls since their inception in 1994 demonstrates that across-the-board salary increases for our members have lagged behind inflation by 6.1 percentage points.

A further two years of zeros would increase that gap to 11.6 percentage points. At the same time, our colleagues in other provinces are continuing to receive wage increases to offset the effects of inflation.

These statistics, coupled with the high cost of housing in the Lower Mainland and Victoria, partially explain the difficulties in recruiting and retaining high-quality faculty members. Career progress increments once awarded to indicate successful progress in one's career are now being reduced to a means of treading water financially.

The cost of indexing operating grants to the rate of inflation for all public post-secondary institutions amounts to $37.5 million in the coming year.

[1015]

Accessibility. In this committee's report of November 2010 it recommended that the financial barriers to post-secondary education be reduced by lowering the interest rate charge on student loans and by establishing an upfront needs-based system of student grants. This committee also recommended funding for projects to improve the transition rates to post-secondary education.

We support these recommendations and urge the committee to recommit to them. We also urge the committee to take note of the following.

During last spring's federal election there was a $1 billion proposal to encourage savings for post-secondary education. During the current election in Ontario there is a half-billion-dollar proposal to provide tuition fee relief to students from low- and middle-income families.

In New Brunswick there is funding for private projects to experiment with different means to improve participation from under-represented groups, and similar ideas are being explored in Manitoba and Newfoundland.

Clearly, there is a national consensus that we still have a ways to go to ensure that qualified students can enter post-secondary institutions, succeed there and be able to start their working lives without a mountain of debt.

I imagine that one question you'll ask us in just a moment is how B.C. can afford these proposals. We'll leave it to others to discuss with you the merits of particular forms and levels of taxation. We'll only observe that the national polling done by our colleagues at the Canadian Association of University Teachers consistently shows that Canadians are supportive of tax increases specifically tied to improving post-secondary education.

We also note that even in poor fiscal times, past governments of British Columbia have managed to make important investments in post-secondary education.

Finally, we observed that although facing a deficit itself, the federal government continues to increase its cash transfers to the provinces for post-secondary education as part of the Canada social transfer. For the coming year that increase will be $16 million, yet total funding for the Ministry of Advanced Education increased by only $2.5 million.

In the two succeeding years the increases in federal transfer for post-secondary education are $16.5 million and $17.1 million respectively, but the projected increases for advanced education in B.C. are $9.1 million and zero dollars. By our calculations, there is $38 million in federal funds for post-secondary education unaccounted for over this three-year budget cycle.
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We'll be making other recommendations and providing details of our calculations in our final written submission in a few weeks' time. We hope that what we have presented this morning will provide food for thought and will be helpful to you in the weeks ahead. We welcome questions or comments from you on these or related matters.

R. Howard (Chair): Very good. You were within your time allotment. That was very skilful. That's great.

D. Donaldson (Deputy Chair): Thank you for the presentation. Once again, some startling figures you put forth there. I've got questions, so I'll put two in one with the nod of the Chair here.

You describe the fellowship situation that we have in this province compared to other provinces. It sounds like it's worse than other provinces, from what you describe. Could you explain what the association's view is on how that impacts innovation in B.C.?

Secondly, we've understood from other presenters in other years that, understandably, universities are looking for any avenue to increase revenues because of underfunding. One of these avenues that we've heard about is the international students being admitted to universities.

Does the association have a view on what this does to access for B.C. students and domestic students?

D. Mirhady: Well, yeah, there are two questions there. I would say, first of all, about international students, that I think that's actually been a real success story for us. I think all of the universities are way above their targets for recruiting international students. The international students do pay a supplementary tuition that offsets the amounts of the provincial grants that the universities don't get for those students so that they are injecting more money into our universities.

[1020]

The universities, at the same time, do have costs associated with the recruitment of international students so that some of the universities aren't as interested in it as others. But I don't think that we can say that the recruitment of international students is in any way detrimental to the access to the universities for B.C. post-secondary students.

R. Clift: We also need to add, actually, that that is not an inexhaustible market. There's actually incredible growth and expansion in higher education in China and India going on right now, both domestically and in partnership with other institutions around the world. So those markets are not ones that we can depend on for all time and depend on for growth purposes for funding.

D. Mirhady: About your other question about the impacts on innovation, let me just anecdotally…. I was confronted by a colleague from our political science department, who said that they had received 75 applications to their graduate program they had made, which indicates there's big interest in the program, that it's an excellent program. They had accepted 24, made offers of modest financial support for the first 12, and none of them accepted. All of them went elsewhere where they got better financial support.

So we're left with the second-string graduate students, and that means we haven't got as good people also being teaching assistants and assisting the professors with their research projects. That has an effect.

R. Clift: That example is from political science, but those examples can be found elsewhere. I mean, fortunately there are good programs already in the province, such as the MITACS and programs funded through the Michael Smith Health Research Foundation, but those pots of funding are not stable and secure, sustained at this point.

It's also important to know that a lot of the innovation we need, not only in this province but everywhere, is actually in other fields like epidemiology, social work, education — fields that traditionally don't attract external funding or special pots of funding from government.

R. Howard (Chair): Excellent. Thank you very much, gentlemen. You were very much on time, which we appreciate this early in the day. That's great. You brought some important points forward, and we look forward to including that in our report.

Next up we have, from the Institute of Chartered Accountants of British Columbia, Richard Rees and Len Boggio.

Welcome, gentlemen. You've got 15 minutes in total — ten to speak and five for questions, unless you want to use all 15 for speaking. We'll try and remind you at ten.

R. Rees: I'm glad to tell you we timed the speech at 7½ minutes, so I'll see if I can deliver it in 7½ minutes and give you an opportunity to maybe even recover some time if you don't have too many questions.

R. Howard (Chair): Excellent.

R. Rees: I have taken the liberty of asking the chair of our board, the president of the institute, Len Boggio, to join me this morning. Most of the time — I've appeared at this committee a number of times — I do it on my own, but because we've been able to make the Vancouver session and Len is in town and available this morning, I think he's here and can perhaps echo some of the remarks we're going to make about the economic situation.
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Once again, we're very pleased to have the opportunity to present to you, and we hope that we'll be able to make some useful recommendations.

Our organization represents over 10,800 chartered accountants, and we are the accounting professionals who work with both industries and individuals in communities right across the province. We also actually have 2,000 chartered accounting students in British Columbia as well.

Our members are involved in every business sector in the province, and we often hear firsthand what issues are most affecting investment and the economy. Of course, in the last few years the volatility of the global economy has made it very difficult for both business and government to even guess what's going to come next. All we can try and do is position our province in the best way possible to ride out the storm. The institute hopes to contribute to this discussion as you develop the budget and implement other public policies that can help strengthen British Columbia's economy and protect jobs.

Our focus will be on economic and business issues, because that is our area of expertise. We know you will hear lots of input on health, education and social issues from people who are better qualified to address those matters.

[1025]

I would like to start by providing an economic snapshot for B.C. Every year we survey our members on the state of the economy. In the most recent survey a vast majority of respondents felt that the B.C. economy was either fair or good right now, and many forecast an improvement in the future over both the short and long term.

However, they also felt that the top issue facing business today was the uncertainty about the global economic climate, followed closely by Canada and British Columbia economic climates.

According to our institute publication, the B.C. Check-Up, in 2010, B.C.'s economy marked a clear turning point toward economic recovery. Our economic growth was driven by American and international demand for the province's resource-based exports. Overall, global exports of B.C.'s natural gas, softwood lumber, minerals and coal increased significantly from 2009 levels. The creation of 38,600 new jobs led to a slight improvement in the province's unemployment rate, and B.C.'s real gross domestic product grew by 3.6 percent.

Nevertheless, the economic recovery that we saw in 2010 did not fully offset the losses sustained in 2009, during which B.C. lost 55,000 in jobs and export levels plunged. In addition, any optimism about the economy continues to be tempered by current and ongoing external developments.

Third-quarter economic reports for 2011 indicate that the U.S. economy is slowing and that job growth and housing prices have stalled. In addition, the recent agreement to increase the U.S. debt ceiling is to be accompanied by a contraction in U.S. federal government spending, further threatening the still fragile economic recovery. We asked our members their thoughts on the U.S. economy. The majority are pessimistic about what they see going on right now and only see economic recovery beginning in the next five years.

Looking at the global economic context, the prospect of an EC country defaulting on its debts could also affect B.C.'s economy. In fact, the list of external factors capable of adversely affecting the B.C. economy is wide-ranging and extensive.

Given the volatile external environment B.C. finds itself in this year, our recommendations focus on policies that would help our business community remain competitive and manage costs, something that is vitally important at the current time. B.C. has made substantial inroads when it comes to reducing B.C.'s regulatory burden on business. However, B.C. should continue seeking ways to make its regulatory system clear and predictable to investors and businesses, thereby reducing the associated costs.

In many parts of the province municipalities exist in tight clusters. Citizens and businesses often see themselves as sharing a common community or a common market with shared interests and goals. The ability of municipalities to achieve shared goals is enhanced when there is a high degree of regulatory consistency among the various jurisdictions. When that consistency is lacking, the differences in regulations may undermine the municipalities' objectives and frustrate business.

The government has a solid record of encouraging municipal cooperation through the initiatives around the Community Charter, and we would recommend they continue down this path by taking a leadership role in establishing a single business licence program for the province. We already know that when communities work together to create a level playing field for business, the results are positive, both for business and for government.

In 2008, 17 Okanagan-Similkameen municipalities piloted the mobile business licence, which allowed businesses to use one licence for multiple jurisdictions. The program reduced the administrative burden on business and made it easier for them to operate, increase compliance with municipal licence bylaws and improve information flow between municipalities, which improved their ability to monitor compliance. An interim report based on the 2008 data showed a 75 percent increase in compliance and a regional revenue increase of over $205,000 within the municipalities involved.

There are some other policy areas that we'd like you to consider that would significantly reduce red tape in the province. One is an easier quick fix, perhaps. Quite simply, the provincial government should review liability legislation and the current application of the ultimate limitation period and reduce it from 30 years to ten years.
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You are likely aware that your colleague Ralph Sultan did introduce a private member's bill in this regard to address this issue, in the spring session. We would like to record our support of these efforts in this regard. B.C. has an ultimate limitation period that is in need of reform. The 30-year time frame is out of sync with other jurisdictions. Alberta has a ten-year period, and Ontario and Saskatchewan have 15.

B.C.'s liability legislation reduces the overall competitiveness of the province and poses several problems. According to the B.C. Law Institute, the extended time frame makes it difficult to protect defendants against stale claims. Stale claims produce bad trials and poor decisions and impose significant expenses on defendants with regard to maintaining records.

[1030]

Those defendants are not just businesses. It's also municipalities and government agencies that have this burden of retaining records. The most extreme example I've heard is dentists, who currently have to keep moulds from mouths in storage for 30 years. So it's a bit of a strange thing. They have to keep them until the period of the liability is covered.

It creates a very, very long period of uncertainty that is unwarranted by the historical claims information. In fact, the vast majority of actions that we see in the court system are brought within ten years of the occurrence that gives rise to the claim.

I hesitate to go here, but a second area where the government can implement regulatory change is also incredibly important to B.C.'s economy. It relates to the…. It's imperative that the government looks to mitigate the impact on business of going back to the PST and GST.

Before I offer up some suggestions that would streamline the PST system, it is important to note that we recommend that the B.C. government consider striking a fair-tax review to look at different forms of taxation in the province. We believe a tax review should be conducted to assess how taxes are collected, how they overlap, who they are most affecting.

Often many well-meaning policies have unintended consequences for both individuals and the economy. A fair-tax review should make recommendations on how to create a modern, efficient and competitive business and personal tax system that will positively position B.C.'s economy for the future as well as meet the financial needs of the government to provide excellent public services.

While we think that overhauling the province's out-of-date taxation system should be our priority, we do appreciate that the government is working to rescind the HST and return the province back to the PST-GST. It has always been the position of the institute to advocate for a competitive tax sales system for B.C. Going back to the status quo is not the best way forward, especially in these unstable times.

But when looking at the B.C. PST, the biggest issue at stake for business is the loss of the input tax credits. We already know that when businesses are not taxed on investment, they purchase new machinery and equipment and hire and train more people. This in turn boosts our province's productivity, something that is sorely needed.

While B.C.'s productivity did grow by 1.9 percent last year, that was lower than the growth in other Canadian jurisdictions, and Canada as a whole, for many years, has lagged other OECD countries.

As B.C.'s workforce shrinks, chronic poor performance in the productivity indicator will hinder the growth in our standard of living, because high productivity is not about working longer; it's about working smarter. When you provide people with up-to-date technology and equipment, they work more efficiently. They're able to produce more in the same amount of time, and they are also able to earn more and be paid more. Input tax credits, in that regard, are an important piece of the productivity equation.

For this reason, we would ask the government to consider turning the B.C. PST into a B.C. value-added tax and would suggest that you look at the model of the Quebec sales tax. We understand that there would be difficulties implementing this, given some of the restrictions around previous PST exemptions. However, the benefits of a B.C. VAT are too great to ignore. If this was done in conjunction with a fair-tax review, our province could wind up with one of the most efficient and fair taxation systems in the country.

Alternatively, if the government chooses to move forward with a system similar to that which existed before, there are also administrative efficiencies that can be implemented in a new B.C. PST. For example, wherever possible the new B.C. PST should mirror the GST with respect to registration, administration and reporting. For example, it could match the remittance requirements of the GST so that the PST could be remitted monthly, quarterly or annually, based on the same thresholds as the GST.

Simply put, whether it's a business or government — because remember, there are lots of government agencies that also have to do these returns — if they could do the GST and the PST return at the same time, which was not previously the case, that would just help the administrative burden.

Our institute is currently working with a group of commodity tax practitioners, and our intent is to provide more detailed input to the Ministry of Finance and to this committee so that you are aware of some of the other possibilities. We will provide more detailed comments in our formal position.

[1035]

I will end up by saying that how the government chooses to reinstate the PST will have a profound and
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long-lasting effect on the province's economy. In these uncertain times of fragile economic recovery it is imperative that we create a stable economy and an efficient taxation system that allows our business community to thrive, keeps our citizens gainfully employed and provides government with the necessary funds for health care, education, transportation and other vital public services.

That concludes my remarks today. We will submit a final submission by the October 14 deadline and include more information on our recent check-up report. Thank you so much for giving us the opportunity to speak to you today. We’d be happy to respond to any questions.

R. Howard (Chair): That's great, Richard. Thank you very much. We're at about 12 minutes, just so you know. But we've got 15, so that's great.

Questions?

B. Ralston: Thanks very much. As you know, the Canada Revenue Agency collects and administers a lot of tax programs for different provinces. One of the things that Jordan Bateman, who is with the Canadian Taxpayers Federation, has suggested recently is that in this transition back to the PST, the possibility of Canada Revenue Agency collecting the PST and using a single form might be an opportunity. The Minister of Finance seems to think that he'll have to hire a couple of hundred people. He has made that public. He doesn't seem to have considered this possibility. Is that something that your group, with your expertise, is prepared to investigate?

R. Rees: I'm not sure quite what we would do to investigate. But to answer you: in terms of the principle, I think that what you're suggesting, which is that we try and streamline the collection through a single process, is absolutely the way to go. I don't have a detailed understanding of how Quebec has positioned their sales tax, but they have worked toward a significant alignment with the federal thing. They actually even collect federal tax on behalf of the federal government. So there are definitely opportunities in this area. I would certainly encourage the committee to look into that further.

B. Ralston: Just if I might…. What I think Mr. Bateman is suggesting is the reverse — that Canada Revenue Agency collect the provincial tax, just as they collect corporate tax, for example, on behalf of the province.

R. Rees: Given that they already have the infrastructure as a result of the previous transfer, that would make an awful lot of sense.

J. Thornthwaite: Thank you very much. You had mentioned the recommendation for a fair-tax review to look at the different forms of taxation in the province. Then you had mentioned Quebec and the value-added tax. Are you saying that Quebec…? Or what other provinces have done this process, and which ones would you recommend?

R. Rees: I'm not sure. I'm not aware of anybody who has really stepped back and tried to take a holistic look at their tax system. One of the challenges you have — and I'm sure that you see this all the time in your work in the Legislature — is that regulation tends to accumulate in different areas, and things are tweaked based on what makes sense at a point in time. But when you actually aggregate the whole thing, things end up being not optimized, I guess.

I think that if you look at…. One of the things I say to some of the students coming into the system is that when I went through the chartered accounting education process, the tax act was not very thick and not very complicated. The stuff that the kids who are just entering our program this month…. You know, they're given something like five inches of legislation, and it's a nightmare. Probably the whole country needs to step back and re-engineer the whole tax system.

What we're suggesting is that perhaps in British Columbia…. I know that you hear about challenges — you know, the issue around the split between property tax and business tax at the municipal level, the whole controversy that we've just gone through around commodity tax, issues around income tax levels. If we could actually step back and find some way to look at the whole thing and come up with something that would fit today, we might be able to create some competitive advantage against other jurisdictions. We might also be able to secure government revenue, which is incredibly important. I think that that's where we're really coming from in that regard.

R. Howard (Chair): Excellent. Thank you.

Now we're over time, so I understand that MLA Donaldson has a real quick question. In fairness to everyone coming later in the day, we need to stick to our time slot here.

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D. Donaldson (Deputy Chair): Given that human capital is at the basis of productivity in this province, is it the institute's view that adequate and proper resourcing of education, training and social services for the most disadvantaged in the province is linked to productivity?

R. Rees: At a simplistic level, it is to the degree that productivity probably drives the ability of government to collect revenues to provide good jobs in order to address those things. There have been a lot of very positive things that have happened. I've come to this committee before and commended the initiatives that have been made to bolster the education system outside of the major institutions.
[ Page 1200 ]

In our own organization we've seen huge benefits from the degree-granting that has come in the regional universities that have been established and things like that. There's no question that the investments that are made in human capital are really important, but at the same time, in order to keep all that going, we need to prime the pump.

Also, the other comment that was made in terms of when we're producing these folks is that we want to have somewhere for them to work in the province. Good jobs, I think, are also associated with the productivity issue.

R. Howard (Chair): Excellent. Thank you, gentlemen. Richard, Len, thank you very much. Great comments.

Next up we have First Call: B.C. Child and Youth Advocacy Coalition — Adrienne Montani and Dr. John Millar.

Again, just a quick reminder. We've got 15 in total, however you want to use it. I'll give you a warning when we get to about ten, and then we can break for questions, or you can keep going.

Welcome.

A. Montani: Thank you very much, and thank you to all committee members for your attention this morning and the opportunity to share both our information and our recommendations with you today. We come representing a broad, non-partisan coalition of 90 partner organizations and individuals in communities around the province who want to see the rights and well-being of children and youth given the highest priority in your budget deliberations.

You've asked us to give you our best thoughts on what's important, our recommended priorities for next year's budget and what government can do to help families. In answering, we start from the assumption that we all want what's best for B.C.'s children and youth. We start from that shared assumption, while recognizing that there will be disagreements over how we get there, sometimes within our own coalition as well as sometimes with the government of the day, about what kind of policies will best get us to that goal, including what are the best budget priorities and what will best serve children and families.

As a coalition, First Call is united in an understanding that is based on solid research and evidence and the expertise of our coalition partners of the many factors that contribute to healthy child development. We call it our four keys to success agenda for children and youth — a strong commitment to early childhood, the support for transitions from childhood to youth and to adulthood, increased economic equality, and safe and caring communities. You've got a little puzzle picture there in the handout I've given you. These are the conditions and the social determinants of health that we know must be attended to for all children to thrive.

We also speak from a commitment to promoting and protecting the rights of children as promised in the UN convention on the rights of the child, to which B.C. is a signatory, such as the right to education, the right to care, to protection, to health, etc. So part of our job as a child rights coalition is to monitor how well we are doing on implementing the convention and B.C.'s promises and how well we are doing in B.C. on delivering those four keys to success.

Many B.C. children are well-supported and are thriving. Too many are not. Too many families — with young children, particularly, or teens — are struggling to find the supports they need. Too many children are growing up in poverty. Too many children with special needs are waiting for help and equitable access to care and education. The indicators of our failures in these areas are the high numbers of children in care; health inequities; unacceptable school dropout rates, particularly among certain youth populations; youth with disabilities and mental health problems ending up in the criminal justice system instead of getting the help they need, and so on.

A theme underscoring all of these observations is that too little effort in public investment is directed to preventing avoidable problems and preventing problems from getting worse. So prevention is a strong theme for us at First Call.

Children, youth and families are paying for this underinvestment in their health and happiness, and we are all paying for it in escalating social costs. Growing up in poverty is known to be one of the most significant risk factors to children's long-term success and well-being. B.C. has had an unconscionably high rate of child poverty for several decades. This goes beyond one government or another, and I've put a couple of charts in your handout there.

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Through good economic times and bad economic times in various governments, we have yet to bring it down to what it was three decades ago.

We also know that the heightened vulnerability created by living in poverty is disproportionately affecting aboriginal families, lone-mother families, immigrant and refugee families, children with disabilities. This should shame us all. A recent study by the Canadian Centre for Policy Alternatives estimates the annual cost of maintaining the status quo of poverty in this province at $8 billion to $9 billion — twice as much as it would cost to implement a comprehensive poverty reduction plan.

When we look at the trend of growing income inequality over the last 20 years and the increasing rates of vulnerability — this is HELP's work out at UBC — among children upon school entry, which is reaching 30 percent, we have the evidence we need to call for something other than just letting the market work and making the economy grow. We cannot continue to ig-
[ Page 1201 ]
nore the consequences of allowing so many B.C. children to be left behind.

We are calling for this committee to recommend that B.C. adopt such a comprehensive poverty reduction plan with legislated timelines and targets for the reduction of poverty and homelessness in this province.

Some of our detailed recommendations for the areas of public policy that need government's attention and have budget implications that will help families and bring down the child and family poverty rate are listed in the handout we've given to you. They cover four areas: work, education, income supports and social supports.

Regarding work, we need to enhance the quality of parents' jobs. That's what will be good for their children. Our specific recommendations: continue to raise…. Kudos for raising the minimum wage a bit, and it's still going up. Index it so that it isn't a big jump and doesn't fall behind again.

Make sure living wages are paid to all government employees and employees working for government-funded contractors. You can show leadership in this regard.

Enforce and enhance employment standards to ensure safe and decent working conditions; fairness; and reduce workers' exposure to material hazards, work-related stress and other health risks that impact their ability to be good parents.

Regarding education, we need to improve children's access to, and the quality of, their education. This is clearly the best investment we can make for B.C.'s future health and prosperity.

Our specific recommendations. Start early. All the evidence points to this. Invest in a publicly funded system of high-quality, affordable, accessible, not-for-profit child care. Besides providing the quality care and learning environments that young children have a right to, this will address the crisis for parents who cannot work because they cannot find child care — or afford it — and those who are working and paying more than they can afford.

Restore funding for public schools to enable all students, including those with extra challenges, to get the support they need.

Remove barriers to post-secondary educational access for lower-income people through tuition fee reductions, grants instead of loans and interest-free loans.

Regarding income supports, direct government income transfers to programs and the tax system are a critical part of the social safety net that we all want to be there for us if we find ourselves in need. We need to ensure that our income support programs and policies provide sufficient income to live a healthy life, respect the dignity of recipients and don't contribute to trapping people in poverty.

Our specific recommendations for families. Reform B.C.'s income assistance policies to allow parents to have enough money to raise their children with healthy development. Raise the inadequate shelter and support rates, index them to inflation, and restore earnings and child support exemptions. Let parents keep at least some portion of those child supports. Revise the rates for parents and grandparents of children with disabilities to better reflect the actual extra support needs that they are incurring.

Change the clawback policies and tax rates for families with children in the $35,000-to-$50,000 income range to bring fairness to the marginal effective tax rate they pay. This was one of your recommendations from the committee last year. Many important government subsidies and benefits have income thresholds that are much too low and are clawed back so quickly that modest-income families face some of the highest marginal effective tax rates in the province. For example, many modest-income families, despite struggling on a bare-bones budget, do not qualify for the low-income carbon tax credit, the sales tax credit, the rental assistance program, MSP premium assistance and provincial child care subsidies.

Regarding social supports, prevention is the key principle we'd like you to consider in your budget recommendations to government. Over the past decade explicit and de facto cuts to child and family services and relevant ministries — when allotments don't match actual budget program costs, for example in education and social services; those kinds of cuts — have been shortsighted. Failing to meet children's and families' needs for help costs us all more later, when problems get worse or developmental windows for children are missed.

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Specifically, we recommend ensuring that MCFD has sufficient funding to carry out its child protection mandate with integrity, based on high standards of practice. The budget should be enhanced to allow them to eliminate wait-lists, reduce social workers' caseloads and properly support the community-based agencies that are contracted to do the crucial prevention and intervention work with children and families — things like therapies for children with developmental challenges, parenting support and specialized services for youth at risk.

Make sure our provincial mental health plan includes improved supports for children and youth with mental illnesses, and invest in preventative supports for youth.

This is a new social program we'd like to see: public coverage for dental care and prescription drugs to all British Columbians. These are essential parts of health care, and the inequities in access based on income are unconscionable.

Increase government's efforts to end homelessness, and increase the availability of safe and affordable hous-
[ Page 1202 ]
ing for low-income families. We need significant new investments in the stock of family housing.

In conclusion, B.C.'s fiscal policy must take the mounting evidence about the importance of the early years investments, the investments in prevention and reducing inequities created by growing income inequality into account if we are serious about improving outcomes for children and building a healthier and more prosperous society for us all.

You have also asked about how to increase revenues. We are confident many of our policy recommendations, if adopted, will result in real savings to the public purse over time. A pound of prevention is worth an ounce of cure. I'm sure you've all heard the quote. Giving our children first call on the province's budget is the best investment we can make — a point frequently made by esteemed economists and business organizations, not just people in human services.

Some of our other recommendations are aimed at addressing the growing inequality in our society through a fairer tax regime. I was happy to hear the chartered accountants also talk about the need for review in that regard. Income tax cuts have mostly benefited high-income earners and profitable corporations and have contributed significantly to the loss of government revenue and the growth of inequality in this province and the country. They have been of little benefit to low-income families and have served to reduce their access to necessary social services. This is simply an unsustainable model.

Thank you again for your attention, and we welcome your questions. Dr. John Millar is here with me as well, so if you have any questions about the savings or how this impacts the health sector — happy to entertain them.

R. Howard (Chair): Excellent. Thank you very much for your comments.

B. Ralston: I had a couple of quick inquiries.

You mentioned the threshold for the carbon tax, MSP premium assistance and rental assistance and housing. Are you able now, or perhaps later, to make a submission about what threshold you would think would be a fair one or a more effective one and provide some costing to that?

Secondly, on the public dental program. There is a part of the Healthy Kids program where dentists do…. I think they're compensated somewhat less than their market rate for providing dental care to children who qualify for the program. Do you have any comments about the efficacy of that program, given your position on public dental care — which I agree with? But generally, the objection is that it's very costly.

A. Montani: Well, on the dental care thing — I don't know, John, if you have anything to say — I'd say just generally, again, that it's working families that often won't qualify, or they're not on income assistance. They don't qualify for the Healthy Kids program. So they're the ones who struggle, and their kids don't get the care they need. It's the lower-income, working families probably who are most concerned.

Yes, we can work with our partners to do some costing. We will do a fuller submission with some research references in our October submission.

J. Thornthwaite: Thank you for your presentation, and also, thank you for your kudos as far as increasing the minimum wage. My question is related to that.

Given that we know that small businesses are actually job creators in this economy, and we want make sure that jobs are a major focus of our government priorities, I'm just wondering if you could make a comment on your comment about living wages — to make sure that living wages are paid to all government employees and employees working for governme and how you feel that that would affect the small busi nt-funded contractors ness sector, since they were the ones that were not necessarily supporting us in increasing the minimum wage.

A. Montani: People who earn a living wage — we do a calculation around that for Metro Vancouver; other cities are doing it — are actually still fairly low income, relative…. They're below the average income. We calculate it at $18.81 in Vancouver. It's lower in other parts of the province.

They spend locally, and they support small business. So people who have money in their pocket spend locally. It does have a ripple effect there.

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Again, the issue of prevention. People working for, say, Family Services — our host organization — and other non-profits…. If they end up paying poverty wages to their workers — a lot of them government-contracted jobs — then those families end up in stress, needing social services, needing supports in education, not being as productive. So it has an impact when people live on poverty wages, and they don't have any money to spend either.

We actually would like to see money circulate. One of the ways is to make sure that people in the lower-income level…. They're not spending…. We want the money to stay here. With investments in lower-income families, actually, the money is more likely to stay here than to disappear to the Bahamas or to be spent on luxury items in other countries or that kind of thing. So we think it's good fiscal policy.

R. Howard (Chair): Excellent. Thank you.

B. Routley: Thank you for your presentation. Do you have any examples of comparisons either with other
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provinces or other countries in ways that we can actually reduce costs, so we can show that here's a program that has done that or achieved cost savings? I know it's difficult. These kinds of areas are kind of like safety that I was involved in. When people don't die, it's hard to measure that — right? Poverty reduction is a similar kind of issue. How do you go about measuring the success of a program when less people are in poverty?

But I'm certain that we have other countries or other provinces that have introduced programs that have resulted in reductions in poverty. Are you aware of any studies in that regard or any evidence that would help us in making those financial decisions?

R. Howard (Chair): We're going to have to be brief, if we could.

A. Montani: Well, in last year's presentation we actually gave a profile of what happened in Newfoundland with a family — a single mom and two kids. With some policy changes on income assistance and others, she's now working and paying taxes and actually has a higher income. She is no longer…. It was because of removing some policy barriers. So we have some domestic examples of taking families out of poverty.

For the larger examples, we'd have to probably look to some of the Scandinavian countries, Nordic countries, which have very low rates of child poverty. We don't have a lot of capacity to do that research. But we can try and dig up some for you around the lower spending than they have….

Basically, countries with lower income inequality and, therefore, lower rates of poverty have much lower social ills. They have lower suicide rates. They have lower chronic illness rates. John could probably speak to the chronic illness issue. There's lots of evidence around the social ills — lower addiction rates, lower incarceration rates. All those things cost us a huge amount of money when the rates are high.

J. Millar: I'll just make a quick point. In terms of the global issue of trying to reduce government costs, as you all know, health care itself is the biggest threat here. It's 50 percent of the budget now, projected to be 80 percent by 2030. One of the big things here is, obviously, creating more healthy circumstances for children and families.

But the other thing is looking at actual changes in health care delivery. The 2014 health accord is quickly coming upon us, and there is a huge opportunity for the government to engage with the federal government around the money that's going to flow there to truly transform primary health care and improve the quality of care and reduce the burden of expenditure that exists there. That's something we can follow up with. Just to flag that for you.

R. Howard (Chair): Excellent. Thank you, Adrienne. Thank you, Dr. Millar.

Next up we have the B.C. Association for Community Living, Mission Self Advocacy Group — Faith Bodnar, Annette Delaplace, Bryce Schaufelberger and Kathleen Moore.

Welcome. So 15 minutes in total — ten and five, kind of — unless you want to go beyond the ten. I'll give you a warning. But I'm going to really have to start to stay to the 15, or we're going to be here…. It'd be unfair to the people who are coming at four o'clock if they don't actually get to speak until six or something. So who wants to start?

A. Delaplace: Good morning, and thank you for the opportunity to present to you today. My name is Annette Delaplace, and I am the president of the B.C. Association for Community Living. I'm here with Faith Bodnar, our executive director, and Kathleen Moore and Bryce Schaufelberger.

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The B.C. Association for Community Living is a provincial non-profit federation that was founded in 1955 by a small group of families wanting a better life for their children living with developmental disabilities. Our federation now includes thousands of individuals, families, volunteers and over 70 community-based agencies dedicated to making sure that people with developmental disabilities are able to enjoy their right to lead active, productive lives, participating as full citizens in their communities.

We are all aware of the announcement yesterday that the provincial government and CLBC will be investing an additional $6 million to help provide priority services to adults with developmental disabilities and their families. We thank you for this investment in services to individuals, many of whom are facing health and safety issues, and to the many youth who are transitioning out of children's services, who are faced with absolutely no services or supports.

My daughter Emily was three months old when we came to understand that her path in life would be living a life with multiple disabilities. We were very fortunate to be supported by a wonderful social worker who was very good at explaining the system within which we would have to navigate — the various programs for early intervention, the supports for individuals with developmental disabilities, government funding, Community Living. But what he also told us was that we would be faced with wait-lists. That was 15 years ago.

Families have been living in fear for many years — fearful of not receiving services and supports they often desperately need for their loved ones. Other families live in fear of losing the services and supports that they may have.

Our member agencies, which provide services for families and individuals, have responded to the govern-
[ Page 1204 ]
ment's requests to reduce spending. By being innovative in their service plans, they have reduced their expenses while increasing the number of people they are serving. They have reviewed every line item, every program, every service provided. There are no more places to save. There are only families waiting for service, waiting for support.

We are here today to urge you to look further, to truly understand that while $6 million helps some families and individuals, there are still so many who will not feel the impact of this investment, as budget cuts have resulted in an erosion of services and supports that is moving us towards an unprecedented crisis in community living.

F. Bodnar: Thanks, Annette. I'm here to give you some figures and to provide some context for the announcement yesterday — the $6 million of new money, which Annette has appropriately and rightly thanked our government and our province for, and the reallocation of $2.9 million. I'm here to put the numbers in context, to put the estimates and the rhetoric in context. Let's make sure all of our numbers add up and are consistent. Let's put $8.9 million in context and shine some light.

The B.C. Association for Community Living, along with other community partners, estimated and asked for a $70 million immediate investment into community living services for adults with developmental disabilities in B.C. This represents a $35 million investment last year and this year that has yet to be forthcoming. This figure comes from CLBC's service plan, based on an estimate that between 600 and 800 people will become newly eligible for adult services within CLBC. This is a 5 to 6 percent increase in eligible adults.

These figures are conservative. Currently there are around 14,000 adults being served in the province of B.C. I'll say again: $30 million to $35 million is required just to keep up. It is a responsible investment and will stave off what is no longer a looming crisis but a growing crisis and an expensive one.

The average costs, as stated in CLBC's service plan, per person for supports and adult services range between $45,000 and $50,000 per year. This is an average, simply an average, and includes people living in everything from their family home to accessing the supports of an independent living program, to living in a home share, to a staffed resource or what is commonly known as a group home, to participating in a day program and to accessing respite. Again, the average cost represents a wide range of services and support.

Let's look at what $8.9 million buys. It's a good start, as we said before, but let's break it down. So $8.9 million, as quoted in the news release yesterday, will support 540 people with the new money. That's an average of $16,700 per person annually. Again, these are average numbers, but let's look deeper. Who are these 540 people? What is their service profile? When CLBC was asked that question yesterday, no information was forthcoming.

The B.C. Association for Community Living went on record six months ago asking for similar data and were told that we couldn't have it. We're not asking for identifying information. We're asking for aggregate numbers.

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There was no answer given yesterday. These are simply average costs. There was no reasonable explanation provided. It is simply a number based on something we have no idea about at this point, at least not beyond the press conference. What I know is that when we compare these numbers to the CLBC service plan, it does not add up. I am mystified. We also heard with this announcement of $8.9 million, $6 million of which is new money, that it is based on the principles of equity, fairness, consistent standards, managing expectations, and meeting health and safety needs.

What really are the expectations of families? Are they that their sons and daughters move out suddenly at the age of 19 when they become eligible for CLBC services? The answer is absolutely no. Their expectations are that some help and support should be provided so that they can know that their sons and daughters are safe while they are at work, earning money so that they can pay their taxes and can support our social programs and our infrastructure. They expect to continue to do what they had done for the previous 19 years: care for and love their children until they are ready to move into homes of their own and enter day programs.

They expect some support to augment what they already lovingly do, and in financial terms this translates into millions and millions and millions of dollars, which are cost savings to the public purse if we recognize and invest now.

I want to go back to the numbers: $16,000 versus $45,000 to $50,000 per person per year. Again, I am mystified how this relates to any sense of real equity, fairness or standards. We heard yesterday that funding to Community Living is based on nothing other than the "ability to negotiate" — the ability of families, of service providers and individuals with disabilities, and the agencies to support them to negotiate. This is simply an outrageous assertion and at its very least is an admission that CLBC has not maintained standards.

I must take great exception to this statement on behalf of the families, persons with developmental disabilities, the staff and the agencies around B.C. that for over 60 years have supported them. There are some 130 community agencies that have over decades set standards, set new ways of supporting people and have been innovative, and that have no interest in merely negotiating contracts for the richest deal. These agencies are about trying to meet the needs of families, people with developmental disabilities, in a fair, responsible, cost-effective and equitable manner. At its core, these agen-
[ Page 1205 ]
cies, along with the families and advocates, are credited with setting the standards and the new standards and the best practice efficiently, fairly and equitably.

Let's get back to the numbers. Thirty million dollars is not a dream or a figure pulled out of the air. It is not excessive. It represents just keeping up, barely, so that we don't create crisis, so that we don't create health and safety issues by our lack of investment.

Thirty million dollars is a solid number based on what we know, what is defendable, what is transparent, what is rational. And $8.9 million is a short-term measure, not a solution. If we don't re-examine our priorities and understand that by not providing adequate investment and funding to support people with developmental disabilities and their families, we are in fact creating health and safety issues.

Is $8.9 million a good start? Absolutely. But if we don't take further steps, it is merely a band-aid that will fall off very quickly to expose a gaping wound. The intervention to repair will be far more costly than if we invest today.

In all of my conversation with you today, I haven't talked about the human cost, and I'm going to turn that over to Kathleen and Bryce.

R. Howard (Chair): Okay. Excellent. Just so we know, we're at about ten minutes, so we've got five to go.

K. Moore: My name is Kathleen. My daughter has over 14 different multi-medical issues, and she requires in-home supports. When she turned 19, she fell into a black hole, and that black hole meant that she was provided with an employment program with no means of access to that program. She requires in-home health supports, which she is currently being denied.

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She has the right to live safe and secure in her home with right of access to an employment program or other further education, together with supports that allow her to participate as a full citizen of our province in an inclusive manner. To deny her this kind of funding is in violation of the UN convention on the rights of persons with disabilities.

It is also a violation of sections 7 and 15 of our Canadian Charter of Rights of Freedoms. And in that regard, if we have these sorts of legislation in place, then why is this being ignored? I don't understand that, you know, and I think that we need to take a look at that and make various policies in keeping with those particular pieces.

People need to be a priority in this province. The system as it pertains to Community Living B.C. is broken. I'm grateful to hear that money has been injected into Community Living B.C., but I can tell you it's not enough. It is simply just a band-aid.

I think that we as a society need to start thinking outside of the box, since, dating back to the report of Joyce Preston years ago, it's not good enough. Reports and recommendations have been made to government, and it has cost thousands of dollars to create those reports. And it seems that at the end of the day there's always a new report being prepared and we're back to square one all over again.

We seriously need to take note of what is being recommended. These are the experts that are providing this information for government, and we all know it's a case of pay now or pay more later. That's the reality of it all. People who fall through the cracks are at risk of developing secondary disabilities at a cost far greater to the taxpayer, and they're at risk of coming into contact with other ministries at a cost far greater.

And, you know, I say to you on another front…. I've often thought: "Since when did people not matter anymore?" People are important, and we need to come together as a community. Also, government needs to come together, and at the end of the day, in conclusion, what I have to say is: it's time for a change, and we need to stop the bullying and put families first. Thank you.

R. Howard (Chair): Thank you. Now, we have about two minutes.

B. Schaufelberger: My name is Bryce Schaufelberger. I'm from Mission, B.C. I'm the vice-president of Mission Self Advocacy Group. I'm here today because this is important to me. Self-advocates need these services to help us with everyday things like budgeting, working, having employment and living independently — we can have our own houses, places to live — and going to social events with our friends and whoever is there.

These help me to be included in community, keep me healthy and having a good life — right? — like anybody would like. It is important to have these services that work for me. We want to be consulted on what these services are, because we don't get that often. We're the last ones to know anything about this stuff, and it really hurts us. This is not happening. It never has like what it should be.

Choices are so important. If we only fund crises, people don't have choices and opportunities to achieve their goals and dreams. We have the right to equality. We don't want a handout. We have the right to receive these services. We just want the services to be there for us when we're in trouble or we need some sort of help.

Schooling is expensive. Rent is expensive. Food is costly. HST doesn't help us. I can go on. But it does not help us anywhere because we're already at a disadvantage. We've got a disability. We can't afford…. What we get on our disability benefits — it's not enough. We need to invest $70 million into this. It helps everybody out.

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I'm very scared of what's going to happen in the future, with all this happening. We need this investment,
[ Page 1206 ]
and immediately. There's Maple Ridge recycling program getting cut. Those people work their butts off to earn a living. You know what it's like to live on disability. They enjoyed their work. They never argue with employers. They enjoy what they get.

We're not taking advantage. We want to contribute to society. We don't want to be put away anywhere. We need to be in the community. That's what everybody wants, and so do we — to be included in all this stuff and including where the money goes so that things will work better. Without us, it doesn't work.

R. Howard (Chair): Okay, thank you, Bryce. Thank you, all, for your comments — Bryce, Kathleen, Faith and Annette. Thank you very much for making your comments. We look forward to the deliberations as we produce our report.

Next up we have the ADAV Society of B.C. — Mr. John Pranger.

Welcome, John. You've got 15 minutes in total. Often people use ten for comments and then five for questions, but it's up to you. If you want to go beyond ten, then you would use your time to speak, and there'd be no time for questions. I'll give you a warning, if I can, when we get to about ten minutes.

J. Pranger: My voice has gone a little bit today. It's probably because of my fear sitting here in this intimidating place with you intimidating people. I have a very unpopular opinion as well, so it doesn't help.

R. Howard (Chair): Sorry about that. All opinions are welcome.

J. Pranger: I'm going to talk to you a little bit about animal experimentation and the vast quantities of resources that it wastes, in my opinion and in the opinion of many doctors and scientists and laypeople. The arguments have been going back and forth for centuries, even though the logic of my position is really the only one that ought to hold. But political power and truth aren't always friends.

The reason I'm here is to inform you of the fact that millions of dollars are being spent. Something like $6.1 billion has been allocated now for capital funds just on various capital projects such as…. I don't have it handy but, for example, the new buildings that are being built around VGH for mental health and for spinal cord research. Most of these institutions use animals. This has been controversial for years.

The proponents of animal experimentation claim that it's only a small bunch of regressive, backward people like me who have rejected animal research on all counts, though this small bunch happens to include Leonardo da Vinci, Voltaire, Goethe, Schiller, Schopenhauer. They've all spoken out against it.

Victor Hugo, who was the first president of the first anti-vivisection society in France. Victor Hugo, Ibsen, Wagner, Tennyson, Ruskin, Tolstoy, Cardinals Manning and Newman, Mark Twain, George Bernard Shaw, Mahatma Ghandi, Carl Jung, Clare Booth Luce, Nobel laureates Albert Schweitzer and Hermann Hesse — to name but a few of the deceased ones and known in the English-speaking world.

If human culture has a voice, it's theirs. If there is any justification for the human species on earth, it is to have brought forth a few individuals like these, and not those who toil at their gruesome trade in the laboratory culture.

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I'll tell you what I believe and what I believe on the strength of such books as these: that doctors are unanimously of the opinion that animal experiments have no use. They're a fraud, but that's an opinion that's very much suppressed because of the political powers that stand to make fortunes off this business.

I'm going to tell you what I believe and what many doctors believe and have expressed. All animal experiments must be rejected, both on ethical and medical grounds. Animal experimentation destroys respect for life and hardens the experimenter against the suffering of human patients. Callousness towards animals turns imperceptibly but inevitably into callousness towards human beings.

Experiments on animals are not a proper way to diagnose, research or heal human ailments. The organic, anatomical, biological, metabolic, genetic, histological and psychic differences between humans and animals are so substantial that knowledge obtained from animals is not only worthless but misleading and can be fatal when applied to human beings, especially the sick. We have pharmacological disasters and therapeutic errors, etc., as the witness to that.

Animal experiments are not carried out in the interests of mankind, as is said, but only of the experimenters themselves and their financial backers, as there has never been a single statistical proof that their results are applicable to human beings, whereas proofs of the opposite are countless.

Animal experiments lull the public, especially doctors and patients, into a false sense of security that prevents them from warding off disease. Most diseases today are not organic in origin but have psychological, social, alimentary — that is to say dietary — environmental, and iatrogenic due to doctors and therapies…. Iatrogenic diseases are caused….

All these factors can't be reproduced in their complexity in animals. That is why orthodox medicine has no causal treatment to offer. It can't even cure a common cold, insomnia, rheumatism, arthritis, cancer, nor any of the other traditional diseases, which it has only managed to increase, meanwhile producing new ills
[ Page 1207 ]
such as SMON, various herpes and allergies, leukemias, multiple sclerosis, AIDS, ebola, etc.

By concentrating on the symptoms, it obscures the recognition of the causes. A dog that's hit on its legs and has its bones crushed is not the same thing as an arthritic patient. The arthritis patient did not get his illness through being smashed with a hammer on the knee joint or hip or wherever.

That is not the same disease, yet it is pretended that it is, and we fund the money. We taxpayers have to pay for this nonsense.

Sick care is the main victim of vivisection, animal experimentation. Many billions of dollars are squandered yearly on useless animal torture — believe me; it is torture — that should, rather, go to the assistance of the ailing.

With the biggest budget for animal experimentation in the world, the United States should also be the healthiest nation, but it is one of the sickest, mentally and physically, in the statistics of life expectancy, behind many underdeveloped countries where animal research is unknown.

Our health depends primarily on prevention and individual lifestyle. The healing of ills can in no way be obtained by animal experiments but only by application of some of the many soft disciplines that are spurned by official medicine because of its fixation on animal experimentation and profits rather than health.

For example, dietetics, psychosomatics, psychotherapy, exercise, fasting, yoga, environmentalism, epidemiology, vegetarianism, veganism, homeopathy, chiropractic, osteopathy, naturopathy, diathermy, electrotherapy and many more, which have proven effective and economical to boot. It doesn't cost anything to change your diet, yet diet is the principle cause of many of these diseases — our denatured, devitalized, fast-food culture.

Medical research must be holistic, concern itself with the entire person, and adopt methods of research that relate to the causes and to the patients, instead of veterinarian results applied to humans, which at best replace acute symptoms with chronic illness.

[1125]

A veterinary education should have equally followed humane principles: no more deliberate infliction of maladies and mutilations on healthy animals but considerate treatment of spontaneous diseases and natural accidents. For all these reasons, to demand the total abolition, prohibition by law, of animal experiment is not only possible but necessary.

"The medical establishment has become the major threat to health." That's the first sentence of a book by sociologist, theologian, author and medical historian Ivan Illich in Limits to Medicine: Medical Nemesis — The Expropriation of Health, 1976. In an interview at the Italian-Swiss TV station of Lugano in 1975 he said: "Modern medicine is a negation of health. It isn't organized to serve human health but only itself as an institution. It makes more people sick than it heals." When I made that statement to Bill Good's radio show one day, he thought I was completely crazy, and yet there it is: "Modern medicine is a negation of health."

Well, you know, we're spending billions of dollars curing mice and rats, but only after spending millions of dollars more making these animals sick with an artificial sickness which is totally different from the human disease it is supposed to model. But you don't have to take my word for it. Here is an expert opinion with regard to cancer only. I have many, many statements here that I could relay to you, but I will confine myself to two.

Homer Pearce, research fellow at Eli Lilly pharmaceuticals, told Fortune magazine on March 9, 2006: "Mouse models are woefully inadequate…. If you look at the millions and millions and millions of mice that have been cured, and you compare that to the relative success, or lack thereof, that we've achieved in the treatment of metastatic disease clinically" — cancer — "you realize there just has to be something wrong with those models."

Or leading cancer researcher Robert Weinberg of the Massachusetts Institute of Technology in Fortune magazine. It was a different date: 2004, March 22. "It's been well known," he said, "for maybe two decades that many of these preclinical human cancer models" — a fancy name for lab animals — "have very little predictive power" — predictive power — "in terms of how actual human beings" — actual human tumours inside patients — "will respond. Preclinical models of human cancer, in large part, stink."

You know, scientists don't express themselves like that without very good reason. They stink. Hundreds of millions of dollars are being wasted every year by drug companies using these animal models.

I could also quote Dr. Sabin, famous developer of the live polio vaccine:

"The cancer research bodies," he said, "cause pain and suffering to hundreds of thousands of animals every year by inducing in these animals, through chemicals and irradiation, large cancerous growth in their bodies and in their limbs. Inflicting cancer on laboratory animals has not and will not help us to understand the disease or to treat those persons suffering from it. Laboratory cancers have nothing in common with natural human cancers. Tumorous cells are not unrelated to the organism that produced them. Human cancers are greatly different from the artificial tumours caused by the experimenters in the laboratories."

Or — one more — former director of the U.S. National Cancer Institute, Dr. Richard Klausner. The history, he said, "of cancer research has been a history of curing cancer in the mouse. We have cured mice of cancer for decades, and it simply didn't work in human beings. All that money, all that time wasted on torturing animals."

Well, there are some very strong words. I wish I could read them to you. But the moral is that animal model systems not only kill animals; they also kill humans. There is no good factual evidence to show that the use of
[ Page 1208 ]
animals in cancer research has led to the prevention or cure of a single human cancer.

[1130]

Over a 25-year period the United States National Cancer Institute screened 40,000 species of plants for anti-tumour activity, and as a result several proved sufficiently safe and effective on the basis of animal tests to be included in human trials. Unfortunately, all of these were either ineffective in treating human cancer or too toxic to consider for general use. Thus, in 25 years of this extensive program, not a single anti-tumour agent safe and effective enough for use by patients has yet emerged.

That was a paper by Farnsworth and Pezzuto at the University of Panama workshop sponsored by the International Foundation for Science and reproduced in The Cruel Deception by Dr. Robert Sharpe in 1988.

Sometimes things get by the medical censors that you're very surprised at. But Dr. Bross, probably because of his stature, did get this one through the centres — an article called Animals in Cancer Research: A Multi-Billion Dollar Fraud. It's an article in Fundamental and Applied Toxicology, a very respected medical journal, in November 1982 by Dr. Irwin D. Bross, PhD, former director of the largest cancer institute in the world — the Sloan-Kettering Institute — then director of biostatistics at Roswell Memorial Institute, Buffalo, New York.

Human disease occurs as a result of a combination of factors including genetics, growth and development, positive or negative lifestyle activities, and social and environmental influences. These factors are profoundly dissimilar in humans and animals. Experimental research on animals to find the causes and cures for human ailments is pure folly — at best an appalling waste and diversion of resources and at worst the cause of much human suffering and disease.

The resources now wasted on animal experiments should be allocated to patient care, to clinical research, which is human-based research, and mostly to prevention. According to the International Agency for Research on Cancer, 80 to 90 percent of human cancer is determined environmentally and thus theoretically avoidable.

Environmental causes of cancer include lifestyle factors such as smoking, a diet high in animal products and low in fresh fruit and vegetables, excessive exposure to sunlight, food additives, alcohol abuse, workplace hazards, pollution, electromagnetic radiation, and even certain pharmaceutical drugs and medical procedures.

But unfortunately, as expressed by medical historian Hans Ruesch: "Despite the general recognition that 85 percent of all cancers is caused by environmental influences, less than 10 percent of the U.S. National Cancer Institute budget is given to environmental causes. And despite the recognition that the majority of environmental causes are linked to nutrition, less than 1 percent of the National Cancer Institute budget is devoted to nutrition studies." I guess they don't want to hear about that.

R. Howard (Chair): Thank you, John. Your time is expired.

Thank you very much.

J. Pranger: I'm sorry it has taken so long. I mean, it could take a lot longer.

R. Howard (Chair): I appreciate that.

J. Pranger: Was my 15 minutes up or ten?

R. Howard (Chair): Fifteen.

J. Pranger: Thank you very much for listening to me.

R. Howard (Chair): Thank you for coming.

J. Pranger: I did leave you some of what I've been reading.

R. Howard (Chair): Yes, I appreciate that.

Next up we have the Mining Association of British Columbia — John McManus and Ben Chalmers.

J. McManus: Good morning. Thank you very much for taking the time to have us come and speak with you. I'm John McManus. I'm the chairman of the Mining Association. I'm also chief operating officer of Taseko Mines.

We believe, as an industry, that there is a unique opportunity here for the mining industry to be of great assistance to a province that is in pretty great need. Ben has a brief presentation, and then we'll have question and answer after. We're looking forward to that.

B. Chalmers: My name is Ben Chalmers. I'm a vice-president of the mining association, and I just want to provide you with a little bit of an update on where the industry is at. Then I have a few recommendations to offer to the committee. Thank you for the opportunity to be here today.

The Mining Association of B.C., as many of you already know, represents the coal, metal and industrial mineral producers of our province. We also represent both of B.C.'s only smelters. We are committed as an industry to providing the kinds of materials, whether it be metallurgical coal or copper or zinc or aluminum, that our society needs every day for the kinds of things that we use to sustain ourselves.

[1135]

One of the things I'd like to highlight in the presentation here is that in December our board of directors took
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the step of becoming the first provincial association in Canada to adopt a program called Towards Sustainable Mining. This is our industry's commitment to providing the materials that I talked about a minute ago in a transparent and responsible way. It uses mechanisms — including third-party verification and auditing, and public reporting of individual minesites — to demonstrate to the public that we are in fact doing things in a responsible and transparent way, and it's very exciting for us. This year is all about implementation, and we look forward to reporting results to the public in future years on our performance.

It's also, I think, worth noting at this time that the mining industry in B.C. is the safest heavy industry of all our industries in our province. We've gotten there through a lot of hard work, both within the industry and in partnership with government. The Ministry of Energy and Mines plays a big role in that. That's something that as an industry we're very proud of, and we like to tell everyone who will listen to us how proud we are of that and how important it is.

Today the Mining Association is a very significant contributor to B.C.'s economy. We have 20 mines right now in operation, which produced about $8 billion in gross revenues last year, with a contribution to GDP of $4.7 billion. That number is a new number for us. It's going to be released in a PricewaterhouseCoopers report next week that's going to cover off a very detailed analysis of the economic impacts in the province of our sector.

We employ about 8,000 people directly at our mines in our province, and we pay on average about $110,000, which is the highest salary of any sector in the province.

In addition to that, I think it's worth noting that we made direct payments to government last year of about $691 million. What's really significant about that is that it's about a 50 percent increase from 2009, about $280 million more. I think that's really important to note because as your government grapples with balancing a budget and closing a large gap in the deficit, our sector is growing, and we're producing more revenues and more in the way of taxes and economic activity that will help provide a solution to some of the issues you guys are grappling with.

We're also a major and growing employer of First Nations, which is an important part of our industry. Many great, good partnerships have been developed over the last years. I think there's a lot more work to do, but it's an important part of our business that we're very proud of.

Now, having said that we have 20 major mines in the province and $8 billion in revenues is a great start, but we think there's a huge opportunity here over the next decade that as a province we can choose to take advantage of. There's a large spreadsheet table in your package that is made available by the Mining Association of Canada, and it highlights the number of potential projects that could see construction in the next ten years. I think what's really important there to note is that 29 of them are from British Columbia. The next province in line is Ontario, with only 17 projects. The number at the bottom of the page, in total investment, is about $136 billion in potential, and B.C. accounts for almost $30 billion of that. So we have the lion's share of interest in this province, in the country, for mining, and it's ours for the taking if we choose to act on it.

Of course, in order to act on it, one of the things that we have to get sorted out in this province is a clear and efficient approval process for permitting, and that will lead into my first recommendation. But before I get into that, I'd like to take the opportunity to thank this committee and government for acting on previous recommendations that we made. The support to Geoscience B.C. this year was terrific — wonderful to see. I think that geoscience really is the foundation of our sector. It's where everything starts. You can't have a mine if you don't know where the minerals are. Seeing that commitment was terrific.

Also, I'd like to thank you for continued support for the flow-through share tax credit for mineral exploration. That's an important part of sustaining our industry, and ongoing support for that is greatly appreciated. Also, the government played a pretty significant role in offering the permits to get our first new major metal mine going in the province — Copper Mountain, which opened just last month, which was very exciting for us — and in the recent review of B.C. Hydro and electricity rates.

[1140]

Electricity is a key input to our industry. It's one of our largest costs, and one of the reasons that we're able to operate as an industry in B.C. is because the rates are so competitive. So we appreciate the government taking a look at where future rates are headed.

I have a few recommendations here, but the first one is the most important that I'd like to make today. The first recommendation is related to the reinvestment in permitting agencies. As I said earlier, we need our permits to operate. As several of my colleagues often tell me: "No permit, no work; no work, no tax revenue." That's sort of a foundation here.

I think that over the last number of years, permitting agencies — whether it be Ministry of Environment; Ministry of Energy and Mines; Ministry of Forests, Lands and Natural Resources; the EAO — have been cut to a point that we don't believe they can function adequately. We really believe that in order to realize some of the potential in our province with respect to mineral resource development, we need to see some renewed investment in terms of people and resources to make sure our applications can get reviewed and addressed in a timely manner.
[ Page 1210 ]

I think having a robust permitting process — it's worth noting — is very important to us, whether it's the environmental assessment process or the mine development review committees. Even regular inspections for our reclamation and safety are all very important things to our industry. We need to make sure that the resources are there to make sure that that happens. Today, if I leave you with nothing else, I wanted to focus on that as our number one recommendation.

The other recommendations I'd like to make next relate to climate change. The government has, I guess, reinvigorated the consultation process with respect to climate change — cap-and-trade and carbon tax policy — in recent months. We welcome that. I think the steps they're taking now are ones that we had asked for about a year ago and are pleased to see the reconsideration of the impacts of current policy and future policy.

I just want to emphasize the need to protect the competitiveness of B.C. industry on a global scale. The mining sector, in particular, exports almost all that we produce in our province, and we're subject to world commodity prices. We have no ability to pass our prices on. The capital that goes into building these mines — the potential $30 billion that I talked about earlier — is very mobile and could go elsewhere, depending on what the investment climate is like here. I think carbon tax and climate change cap-and-trade policy could have a significant impact if not done carefully to make a difference in where our investment flows.

The next recommendation is also related to climate change and specifically the carbon tax. With the carbon tax schedule expiring next year, with the last increase scheduled for July 2012, I think there's an opportunity here to revisit how the carbon tax moves forward. I would like to suggest to you that there would be tremendous benefit in rebalancing how the revenues of the carbon tax are spent and channelling some of that into some sort of fund to look at developing clean, green technologies that industry can use to reduce our emissions and increase our energy efficiency.

The next recommendation I have is around First Nations and revenue-sharing agreements. In the last couple of years two have been signed, and that's tremendous. I think there is a need to sign more. These have proven effective in moving the needle on relationships with First Nations. We would like to see progress made on signing new agreements, with new projects.

The last recommendation, very briefly, is regarding the transition from HST to PST. We think there's an opportunity here to look at, hopefully, keeping in place or adding into the PST some of the efficiencies and competitive advantages that the HST saw. So we're asking for an opportunity as a province to have that conversation on how we can go back to the PST but do it in a better way than it was before.

That's where I'll leave it. Thank you for the opportunity.

R. Howard (Chair): Thank you. We have some questions.

P. Pimm: Thank you very much for your presentation. I just wanted to touch a little bit on a couple of your first recommendations. In "address permitting and First Nations consultation requirements in a timely manner," what do you perceive as a timely manner? Can you outline that a little bit for us?

[1145]

J. McManus: I'll take that one, Ben. Having timelines as part of the process helps a timely manner. There are some processes out there that have no timelines. You know, we're asking for more people and resources for the permitting. Sometimes you get too many people, and then they start asking questions. You end up in a permanent "do" loop, and you never get a permit that comes out the end.

But what we're really looking for in this one is to look at it, as Ben said, as an investment in those ministries and those departments within the ministries which actually issue permits, because the permitting process is becoming more and more complex and difficult. As these things drag out, people will turn away. It's not that the permit is delayed. The companies lose interest. You lose your opportunity to build a mine. You need to build the mines while the prices are high, because that's when you can get financing. If it takes too long, you miss the window, and the mine doesn't get built.

There's no one-word answer. Sorry.

B. Chalmers: I'll add something in there too. I think what's really important to add on to what John said is that the process is getting more complicated. We're not here to ask for an easier process. We have no interest in seeing mines just shepherded through the process without the kind of rigour that society demands. We just need the people in place to make sure that the process that is there is done well.

P. Pimm: Okay. I've got one further one on your recommendation 2(b) on climate change. With our carbon tax the way it is now, where do you think your industry is going to become uncompetitive in that marketplace?

B. Chalmers: I think, unlike some of the other sectors, we have a ways to go before it really hits us hard. But having said that, when you look at having to pay $30, $40 or $50 a tonne, which is not far from where it is now, and other places that we compete with don't have any cost, it is a factor in making a decision. I don't have a specific number for you. I don't have a threshold to tell you it's
[ Page 1211 ]
$100 a tonne or $200 a tonne. We haven't done that analysis yet. But as these costs are incurred…. It's incremental costs that compile with some of the other tax burdens that do affect us.

R. Howard (Chair): Excellent.

It's going to have to be brief.

J. Thornthwaite: Where do you think the best jurisdictions are, for instance, for British Columbia to emulate for permitting systems?

J. McManus: That's a difficult question too. There are a lot of things about British Columbia that are very good. There is a rule of law, and there's relatively good adherence to the rule of law. If you look at some of the South American countries — Chile, for instance — they have a very rigorous and vigorous permitting system, and a lot of what they have is a time frame in place. They realize that if they don't have a permit issued, they're not going to get a mine built. So that would be one place to look.

B. Chalmers: It's also worth noting that we do have timelines. The environmental assessment process has a timeline. The rest of the permitting process does not, so there could be benefits in adding timelines there. But at the heart of the matter, the process that we have in the province works, and it's a very good process. We just don't have enough people to do the job, so I think the ministries that are responsible just need more resources to do what is already laid out.

J. McManus: That's what we think this committee could help us with.

R. Howard (Chair): Thank you.

And with apologies, I missed you, Doug.

D. Donaldson (Deputy Chair): Good to hear your presentation again. Congratulations on your new CEO and president, Karina Briño. I'm going to be meeting with her in the near future, so I look forward to hearing from her about the direction this organization is taking.

I was in Galore Creek a couple of weeks ago, so I'm well aware and reminded once again of the need for resources in the front-line ministries that deal with mining. We have a member of the committee who is an advocate for that too, a former Mines Minister.

So when I brought this up with the current Mines Minister, Minister Coleman, and with Minister Thomson of Forest, Lands and Natural Resource Operations during the budget estimates, one of the responses was the transfer over of responsibilities around mining permitting and Ministry of Natural of Resource Operations forest technicians doing that kind of work.

I've heard from members of your association that this is not necessarily the ideal situation. Although they both deal with ground issues, forests are quite different from mines. So do you share these concerns with some of your members around having not just more personnel but adequately trained personnel?

J. McManus: Very much. One of the things in this province which works very well is the Mines Act and the mines code. One of the issues of moving into forestry personnel trying to manage the Mines Act and the mines code — not just permitting but operationally…. It's a big transition.

[1150]

The people in forestry who are the inspectors that are doing that type of work are very good at what we do. No question of that at all, but there are things which are specific to mining. It's a big engineering project. Usually you've got high stresses, big equipment. You're in one spot for a long time, which is quite different than what happens in the forest industry. So I think if there was an attempt to do that, the transition period could be very difficult, and there would be things that would happen that wouldn't be of benefit to the province or the people or the industry or anybody.

I think being able to work under the Mines Act and the code, which has been in place…. We're the safest heavy industry in the province, which is a safe jurisdiction in the world. We think that is a very effective document and piece of legislation.

That's why we resist it. Not that we think there's less talent there, but the specifics around mining are very different than any others.

R. Howard (Chair): Excellent, gentlemen. Ben and John, thank you very much for coming out.

J. McManus: Thank you for your time, and good luck.

R. Howard (Chair): Next up we have Canada's Research-Based Pharmaceutical Companies B.C. regional committee — Peter Simpson, Shiera Stuart and Bob Dawson.

Welcome. So 15 minutes. You can use it all with your presentation. Often people will stop at about ten for questions, but it's up to you. I'll give you a little nudge at about ten minutes.

P. Simpson: Thanks, hon. Chair and committee members. We really appreciate this opportunity. My name is Peter Simpson, and these are my colleagues Shiera Stuart and Bob Dawson.

We're members of B.C.'s regional committee for Canada's Research-Based Pharmaceutical Companies, known as Rx&D. I work with the pharmaceutical company GlaxoSmithKline, Shiera is employed by Bayer
[ Page 1212 ]
Canada, and Bob is employed with Pfizer. In addition, Shiera and I are co-vice-chairs of B.C.'s regional committee for Rx&D. Shiera, Bob and I are based in British Columbia, and we're part of a large community of individuals from our industry and the broader life sciences community who work and live in this province.

We appear before you today to affirm the value that innovative pharmaceuticals and vaccines contribute to improving the health and reducing the overall burden of illness for British Columbians. In fact, in terms of the cost components and drivers of overall health care budgets in this province, the tightly controlled drug and vaccine budget represents a relatively small proportion of health spending.

By way of background, Rx&D directly represents 15,000 men and women in the innovative, knowledge-intensive pharmaceutical and vaccines industry. Our 50 member companies invest over $1.5 billion annually in health research and development from coast to coast.

Rx&D member companies are leading funders and performers of therapeutic product research and are the largest single source of health R&D research in the Canadian business enterprise.

Our mission is to propose and advocate for public policies that will bring the best innovative medicines and vaccines to Canadians in a timely and appropriate manner. We want to help make Canada a leader in pharmaceutical and biotechnology research and development and contribute to the expansion of B.C.'s knowledge-based economy.

In fact, over the past five years our member companies have invested hundreds of millions of dollars in this province's health innovation sector, including hospitals and universities. We're very proud of this level of investment in the province, especially during a very challenging economic period.

Our future ability to continue to contribute to the province's medical research and life sciences sector will more and more be dependent on the direction B.C. takes in embracing innovation, the knowledge economy and overall job creation.

To this end, we encourage the government of British Columbia to formally support the government of Canada's efforts to negotiate a comprehensive economic and trade agreement with the European Union and, more specifically, to support raising Canada's standards in intellectual property protection — which include the right of appeal, patent term restoration and data exclusivity — equivalent to those standards that already exist in Europe and the United States.

Turning to the issue of governance, we wish to recognize this government's efforts to develop and implement a more transparent review process within the Ministry of Health. We continue to work with health officials to help implement this important program.

[1155]

In addition, Rx&D is committed to playing a positive role in meeting the latest economic challenges the government of British Columbia faces, and we're equally committed to working with this government to achieve sustainability in the broader health sector spending.

I'll now turn it over to my colleague Bob Dawson to present to you how our industry is prepared to work within the financial targets already set out in this government's three-year budget plan.

B. Dawson: The current service plan for the Ministry of Health projects that departmental spending for 2011-2012 will be $15.7 billion, and this is a significant public commitment to the management and the development of our health care system. Of that total budget, the service plan anticipates allocating just over $1 billion on PharmaCare. This budget includes the cost for generic, or the off-patented, drugs as well as some over-the-counter medicines and supplies. It also includes pharmacists' dispensing fees, distribution costs and the costs of actually running the pharmaceutical services division and the various program initiatives within that division as well as the costs of the reimbursement of brand, or patented, medicines, which we represent.

While drugs are often cited as the fastest-growing expenditure in health care, it's important to understand that the entire budget of the pharmaceutical services division is still well under 10 percent of the entire health care pie. In fact, the five-year average is 7.6 percent. This is a fundamental point for public policy-makers such as yourselves. Despite the growing public commentary that drug and prescription costs are skyrocketing, over the past five years less than 8 percent of B.C.'s total health care budget was spent on prescription drugs.

It's also possible to break this down further between patented prescription drugs and non-patented prescription drugs. In the handout we have distributed to the committee there's a pie chart illustrating the percentage of the government health expenditure in Canada by use of funds in 2009. You can see here that the percentage spent on patented prescription medicines is 5.5 percent.

We can see the cost-growth curve straightening out. For example, while the PharmaCare budget grew by 10 percent annually between 2003 and 2007, annual growth dropped to 3 percent between 2007 and 2010, and the service plan predicts a 4 percent annual growth over the next four years. This is due in part to the fact that an unprecedented number of the brand-name pharmaceuticals have lost their patents and because of the savings realized from B.C.'s new generic pricing framework.

As Peter noted earlier, when you consider the many cost drivers in the health care budget, the tightly controlled drug budget makes up a relatively small proportion of health care spending but provides tremendous value in improving the health of British Columbians.
[ Page 1213 ]
The new treatments and technologies we have developed over the past several years have led to less invasive surgery, increased use of diagnostic imaging and more specific and tailored drug treatment plans. Simply put, British Columbians are living longer and healthier than ever before.

Past experiments in reference-based pricing and mandatory therapeutic substitution across drug classes were introduced as a way to control costs. Unfortunately, real-life experience has demonstrated time and again that these programs actually increase costs and make health care less effective. This is also why government needs to be cautious in its development of bulk purchasing strategies and consult openly with stakeholders.

We believe that the public investment in PharmaCare is making the health care system more efficient and effective, and if we can work with the government to ensure that the right patient gets the right medicine safely in a timely manner, then we'll help manage costs more effectively while increasing investments in drug research and development.

I'm going to now pass it over to my colleague Shiera Stuart to elaborate a bit on where we see some of these answers.

S. Stuart: As an industry, we are prepared to roll up our sleeves, participate in the health care debate and bring real solutions to the table to help achieve sustainability in health care spending.

B.C. is not alone in trying to find the right balance between managing its expenditures in health care while at the same time wanting to improve patient choice and population health outcomes. Indeed, this is a challenge for state-financed and state-governed health care systems throughout the world.

Rx&D and its member companies have solid experience with other jurisdictions in addressing this balance. Some examples include government and industry working groups and memoranda of understanding in places such as Alberta, Quebec and Atlantic Canada. We would welcome the chance to provide our perspective on how to maximize opportunities and address implementation challenges here.

[1200]

To that end, we suggest that a multiministry, multi-stakeholder working group be put in place with representation from our industry; from the province — including the Ministry of Jobs, Tourism and Innovation, the Ministry of Health and the Ministry of Finance; as well as members from the life sciences community, including the health research and business sectors; and, of course, patient stakeholders.

Through such a structure, it is our view that together we could (1) make recommendations regarding the development of a coordinated science and technology strategy for the biopharmaceutical sector; (2) serve as a liaison between government, business and academia in the development of strategies that will further strengthen British Columbia's health sciences sector; and (3) collaboratively find ways to increase private sector investment in this province while also managing the cost growth in the health sector.

We also feel this regular forum could be used to discuss potential partnerships in appropriate medicine utilization and chronic disease management. We want to bring these insights to the government, and we believe more of these partnerships will improve health for British Columbians, will result in savings to the health system and thus lead to increased investment and research.

We strongly support any efforts by governments to maximize the value of public funds in health care.

To conclude, Rx&D has a strong desire to work with the government of British Columbia. We are committed to the health, wellness and economic prosperity of this province. When it comes to tackling the tough issues, we want to be at the table not just because we see ourselves as a concerned stakeholder in B.C.'s future but also because we feel that we can bring knowledge, experience and solutions to all the challenges we face.

Thank you very much for your time, and we'd now be pleased to answer any questions you may have.

R. Howard (Chair): Excellent. Thank you. Nine and a half minutes it was.

D. Hayer: Very good presentation. A very important presentation because Health takes 50 percent of our budget.

My question is: from a $1.5 billion investment your industry invests in Canada, what percentage is in British Columbia, and how many jobs does it create?

Also, on prescription drugs. Is British Columbia paying a lot more for buying prescription drugs than other provinces, or are we in line? Where do you see us going in the future? Because overall, health care is increasing faster than inflation and is growing by more than any other ministry in our budget.

B. Dawson: We'll tackle the last part of your second question first, and then I'll pass it over for the jobs and investment one.

But on pricing, all of the patented medicines — all of the brand drugs that we produce, coming into Canada — are reviewed and approved through the Patented Medicine Prices Review Board. So it's a federal regulatory system for setting prices.

The PMPRB uses a patented medicine price index to monitor the price trends of patented drugs in Canada. Their data shows that drugs in Canada have been stable or declining compared to other countries that they benchmark our prices with.
[ Page 1214 ]

In short, prices in B.C. are exactly the same as they are across the country. Prices in Canada are regulated and matched to prices in France, United Kingdom, Italy, Sweden, Switzerland, Germany and the United States.

S. Stuart: I think…. I want to make sure. You were also asking, though, in regards to this pie chart — right? — if B.C. is similar to the 5.5 percent? Or are we less than the 5.5 percent? That was part of your question, too — correct?

D. Hayer: Yes.

S. Stuart: This pie chart is, obviously, federal. In B.C. we are less than the 5.5 percent. We are about…. Isn't it about 3.8?

B. Dawson: Yeah. I think it's between 3 or 4 percent.

S. Stuart: So 3 and 4 percent. We're actually lower. The cost for British Columbia is lower than the rest of Canada for brand-name pharmaceuticals.

P. Simpson: In terms of your question about investment and jobs — two really important points. Some of the investments that our industry takes in British Columbia and have taken over the last couple of years have some parts of them that are hard investments, and then if milestones are reached, then later payments are made on those investments. That's if it's a capital investment in a large pharmaceutical company investing in one of the start-up biotechs here in the province.

Other investments include extensive research work that's done in the teaching hospitals in British Columbia. There is quite a lot of that done.

If we look conservatively over the last five years, we said hundreds of millions. If you look at the hard investments, it's around $500 million, we'd estimate, in that time frame for investments in British Columbia. That doesn't include any of these milestone investments that could be attached to that. So that number could be significantly higher.

[1205]

In terms of the jobs that are within British Columbia, we were talking about that just before we came here. Between our three companies, direct employment is around 200 in high-tech, knowledge-based jobs. The last estimate that was done was in 2009 for Rx&D in British Columbia, and it was about 500 direct employment. Indirect employment was estimated to be about 1,600 jobs that would relate to that.

I'm not sure. Between us, have we answered your…?

R. Howard (Chair): Yeah, that sounds good. Thank you.

Just briefly, MLA Ralston.

B. Ralston: Thanks very much. Just to further explore the issue of research, there are two federal programs that help offset research costs: the industrial research assistance program and the SR-and-ED, the scientific research and experimental development program.

Now, I understand the federal government is reviewing the SR-and-ED program, because there is perceived at least to be some problems with that. To what extent do your members avail themselves of those two programs, and do you have any comments on the efficacy of those programs?

B. Dawson: Those are very important programs. We don't generally apply for research funding for those. Often what would happen is a hospital or researchers would leverage private sector research investment along with those to try to amplify the amount that they receive.

The role that we play in the research with the public side is often as a partner. There are many opportunities and experiences where medical research organizations have funding from the private sector — say, from one of our companies or a group of our companies — as well as one of those agencies that you've identified.

But you're right. They do fluctuate. I'm not exactly sure what kinds of pressures they're under from the federal funding perspective. Sometimes that increases expectation for our companies to increase our presence in those funding relationships.

R. Howard (Chair): Excellent. Thank you very much, Bob, Shiera and Peter. Thank you for coming out.

Next up, we have the Vancouver board of education, school district 39 — Patti Bacchus and Steve Cardwell.

Just as you're getting settled, I'm sure you know that you have 15 minutes. I'll give you a little nudge around ten if you want to wrap it up for questions, or you can go right through it, if you like.

Welcome.

P. Bacchus: Thank you very much once again for this opportunity to come back this year and speak to you. I've been here the last couple of years. I know some of you were here, and I think I see some new faces on this panel. We always appreciate the opportunity to make our case and come and talk about public education funding.

What you're going to hear this morning probably isn't unique to the Vancouver school district. You'll probably hear similar things from districts across the province in very similar situations as we are.

We had very short notice of this hearing. Actually, we didn't get a notice. I got it from someone else. I'm not sure why that has happened.

The good news is that we were able to put together a brief really based on previous years. But of course, the bad news there is things haven't changed, and that's why we were able to use last year's. So these points have been
[ Page 1215 ]
made before. They're still very relevant, very important and very critical to our school district and, I suspect, to others, although I don't speak for them.

As you know, the Vancouver school district is a large, urban and multicultural school district. It includes some of the most affluent communities in the province and also some of the most impoverished urban neighbourhoods in the country. This setting does provide wonderful opportunities but also some very serious challenges.

We are very diverse, and our annual enrolment is about 56,000 students from kindergarten through grade 12. We also have a very strong adult education program that runs out of several sites throughout the city as well, serving a few thousand more students.

We do address the very extraordinary and complex challenges associated with such diversity, and our goal is to serve the needs and tap the potential of each of our students so he or she may achieve their own unique potential.

Our brief today is brief. I've intentionally done that. I know you're receiving a lot of information, and as our favour to you we've tried to keep it as concise as we can, because I think the points are best made when they're made quite simply.

[1210]

Our number one point, and this has been consistent over the years, is that the province must provide stable, predictable and adequate funding to enable school districts to fulfil their responsibility to provide continued equitable access to quality public education.

We have had some very unpredictable funding situations and unfunded cost increases. Those require us to spend significant time and resources on balancing budgets each year instead of strategically planning the most effective use of funding to support student success. This chronic underfunding issue that we face also makes it increasingly difficult to fully support success for students as valuable programs and staff positions are further reduced each year to balance budgets.

I'll give you a few examples of where I would say the unpredictable funding takes up a lot of our time and resources unnecessarily. For example, last year — just in this current calendar year in the spring — we had three different releases of our holdback funding. Very welcome to get the funding. It was higher than in previous years, and by no means was it unwelcome. However, it fell outside of our…. It came in unpredictable amounts. We would suddenly hear an announcement after we had completed our budget process.

As locally elected officials, we strive to have a very open and democratic and inclusive budget process where we work with our stakeholders, we work with the public, we work with families and students and employee groups to develop a budget each year that most effectively uses the resources that we have. We're very proud of that process. It's a very robust process.

However, it becomes difficult when we've passed that budget after that process and find ourselves, a matter of weeks later, in a different funding position because of a sudden, unexpected release of money. We now don't have that opportunity to go back and work together to find the best way to allocate it. So the board is in a position of making decisions in isolation, which isn't, in my opinion, the best way to govern and spend public funds.

Another example. I think two years ago at this time we were grappling with the very sudden cancellation of our annual facilities grant funding the week before school opened. That was about $11 million that we used over the summer to do summer work on buildings, relying on that funding that we had been advised was on its way.

About the last week of August we got an e-mail in the afternoon advising that it had been absolutely cancelled for that year. So we were thrown into…. Instead of sitting down with our staff at the beginning of the year in a planning day that we had scheduled, we spent the day in damage control trying to figure out how we were going to cover these costs and the money already spent. Again, not a great way to be running a large and complex school district.

Of course, the HST situation is a very specific and, hopefully, unique example of real instability for us. The HST initially, when it was introduced, was going to be a cost item for school districts. We did work hard and advocate through our provincial organization, the BCSTA, to have a meaningful rebate applied, and eventually that was accomplished, which was good news for school districts and in fact would have put us into a better position financially. We had anticipated that. This year we are benefiting from that.

However, the return to GST-PST will be a cost item for us, we anticipate, in the area of about $800,000 a year. That's significant for us when you look at what that would spend in terms of special ed support workers or teachers or counsellors. That's a lot. So we are hoping that that could be in some way addressed through some review of the rebates that could be applied there as well, so that we're not thrown into more instability again, adjusting our budget to reflect that.

In terms of as we get our allocation and the process, we are advised in about the middle of March each year what our per-student funding will be, and that's really what we build our budget on. But we need to have that done. We try to do it in Vancouver — we need to, for our collective agreement reasons, really — by the end of April, because if we're in a layoff situation, which, unfortunately, we have been in a couple of years, we need to get that process begun in early May. So we have a tight period in there — March 15 to the end of April.

When you're trying to do public consultation in a city as, again, diverse and large as Vancouver in a way that al-
[ Page 1216 ]
lows our stakeholders to have meaningful participation, which requires them to have our proposals, our information, background, time to come and hear about it, to think about it, go back to their groups and associations and their parent advisory councils, discuss and provide feedback that we can then work with our senior management to incorporate in our final budget, it's a very tight time frame. And again, the unpredictability of that.

[1215]

We're often waiting on tenterhooks to know which direction we're going to be going in and planning for the coming school year in staffing and programs and, of course, notifying parents of what they can expect and if their programs will indeed be able to continue into the next year. So I'll leave that as point 1.

Point 2. Again, this is related to…. We’re asking that at a minimum, all negotiated or provincially mandated increases — including salary, benefits, pension contributions, medical premiums, and new requirements such as carbon emission calculation and carbon offset purchases — must be fully funded by the province. I'm not going to read the next paragraph but will just point out that these items have been increasing at a rate that quite significantly outpaces any funding increases in our per-student allocation that we get.

That comprises a significant portion, over $76 million, that we've had to reduce in spending since the early part if this debt, about 2002-03. When we go back to that point, we're looking at…. Now, if you accumulated out those unfunded increases that we are obligated to pay our employees in benefits, medical, their increments as they individually rise up their pay, it's a real challenge for us. Each year that results in some cuts to our budget and spending in other areas.

Some of the additional requirements. Again, you're familiar with the carbon offset issues, medical. We very recently had the issue of insurance premiums again — just really a letter at the end of the day saying: "You're now responsible to pay your insurance premiums for one category." For us, it was just under $300,000. Well, there go six special education assistants. So it's not an easy thing to absorb. That, again, was outside of our budget time, just after we had adopted a budget that the province was fully aware of. To get that kind of news puts us in a really difficult position.

Point 3 is that we need to review and increase supplemental funding grants for students with special needs. The current formula provides supplemental funding based on essentially three categories — level 1, level 2, level 3 of special needs; quite broad categories — often not really reflecting the functional needs of a student in a classroom, based on a medical diagnosis that often doesn't really translate well into what that child needs in the classroom.

I use the example of autism, a very broad spectrum. A student with an autism designation…. We call it G in the Ministry of Education. Some students can function fairly well independently with some minimal support. Some require full one-on-one support, particularly in their younger years, from a special ed assistant. They also require, in many cases, occupational therapy, speech therapy, psychoeducational support, special resource teacher support — a number of items that the approximately $18,000 in supplemental funding that is currently available doesn't come close to covering.

We spend in Vancouver more than double on our special education supports than we are provided through the supplemental grants. It's a growing population, as we know, and it's an area that really needs some careful attention and increases, because it is creating real strains in the public school system.

I'll move on to item 4, which is our buildings. We need to provide funding for increased maintenance and upgrades to address the needs of aging school facilities. We have a large stock of old buildings in Vancouver. Last year I went to several centennial celebrations, which are great and fun events, but it really reminded me these are 100-year-old buildings all over the city that have had, in most cases, very minimal maintenance over the years.

We've just completed our audits and assessments that were under the direction of the Ministry of Education and supported by the Ministry of Education to assess the conditions. It also relates to seismic and other areas. Just on that building condition maintenance item, what that review has told us, by the engineers — many of these are ministry-hired consultants — is that we would need to increase our current annual facilities grant spending by eight to nine times just to keep our buildings at the level they're at now.

This is to prevent further deterioration. We're talking minimal work. These are valuable public assets that are now at the point of deteriorating due to the inadequate maintenance. We're just barely keeping up with the roofing, and I mean barely — patching to not see a rapid decline in the value and get into some very difficult situations where we'll probably be forced to be replacing some of these. We need to take it seriously.

Our board took a resolution to the BCSTA a couple of years ago, which I think had unanimous support, looking at the Building Owners and Managers Association comparisons of what they would recommend to maintain a building. The current grants are less than a quarter of the industry standard for school districts. We're not taking care of our assets at that level.

[1220]

Our final one. We need a real plan to eliminate child poverty in B.C. We see the impact of that every day in schools, and we need to address it. It's a pressing issue in Vancouver schools.

Three quick points that we didn't put in the report. We need to share the information that's gathered in ministry audits of school districts. We have auditors come
[ Page 1217 ]
out. They'll find out there's a procedural problem in a school. Filing information. We'll suddenly be having $1 million clawed back because we didn't have the forms filled in right. This happens all over the province. It's a real pressure for school districts. We need to share that information. If one school district is doing something wrong, tell all the school districts so we can fix it and not get in this situation.

We need a strategic investment in technology infrastructure. We're really struggling to keep up in schools. We don't have wireless.

And thirdly, we need incentives to go paperless. It's difficult to make the shift when we don't have a replacement for paper, when we don't have iPads or other things that we could possibly be doing to improve our sustainability and efficiency of managing our resources.

Thank you, and my apologies for going overtime.

R. Howard (Chair): That's okay. We have a few minutes for a few questions. They'll have to be brief.

J. Thornthwaite: Thank you for your presentation. With regards to your point 3, the functional assessments of learning needs: are they actually already done or not?

P. Bacchus: I'm not sure if they're done in a way that would inform a model like this, but what we…. It's that gap between what a student needs and what we know the needs are versus a funding formula that is so disconnected from that. We have had these discussions, and I know…. I think the ministry has had some discussions, as well, about how we get to a more realistic model that reflects the actual learning needs in a way that is more meaningfully tied to the individual students. I don't believe now…. I know in schools that we know…. As a district, we work with our schools to determine what their needs are, and that's how we allocate support, but we don't see that reflected in the piece that goes through with the province.

M. Elmore: Thank you very much for your presentation. I'd just like some information from you in terms of — certainly Vancouver, a very diverse and multicultural community — the challenges presented in the classroom addressing new immigrants, students who are new immigrants and need supports — English as a second language, these kinds of things — as well as from the wide range of ethnic communities. Certainly, we're seeing that proportion growing. If you could just talk to some of those challenges.

P. Bacchus: In Vancouver we know that over 60 percent of our students speak a language other than English at home. We have — and I certainly can provide it to you; I don't have it with me — very detailed breakdowns through our district reception and placement centre that tell us where our families are coming from, what their languages at home are.

We do provide some support through a federally funded program — our settlement workers in schools — which helps the families, works with the schools, helps connect them with other services, and that's been a very successful, relatively new program.

We also have multicultural liaison workers who we rely on, again, to support families and students who are coming into the city, but those have been affected by budget reductions. Again, they're our non-enrolling staff, and they tend to be the areas that are most at risk when we're facing the kind of budget situations we have. But we'd be happy to provide you with more detailed information.

R. Howard (Chair): Excellent. Thank you both for coming. Thank you, Patti. Thank you, Steve.

S. Cardwell: Thank you for your time.

R. Howard (Chair): Next up we have the Consulting Engineers of British Columbia — Doug Hinton and Steve Fleck. As you're getting settled, as you know, you have 15 minutes. I'll give you a little nudge at ten if you want to wrap it up for questions, or you can go right through if you like. Welcome.

D. Hinton: Chair, thank you very much. I'm president of the CEBC, and Steve is the vice-president of the CEBC. The Consulting Engineers of British Columbia is a provincial association of engineering consulting firms. CEBC represents about 90 of B.C.'s consulting engineering companies that provide engineering and other technology-based intellectual services to the public and private sectors. Our CEBC firms employ 7,800 people in the province of British Columbia and are comprised of a workforce of engineers, geoscientists, technicians, technologists and other support staff.

Nationally, over 100,000 Canadians owe their livelihood directly to the business of consulting engineering. The consulting engineering business contributes some $2.9 billion in annual revenue to the B.C. economy, much of it earned from clients based outside the province of British Columbia. These are revenues that would not find their way to the province of B.C. if it weren't for the excellent reputation of the B.C. consulting engineering industry.

[1225]

Consulting engineering is at the centre of B.C.'s knowledge economy. The knowledge economy is the source of high-value employment supporting a broad array of business spinoff. A healthy B.C. consulting engineering industry is critical to building the future economic foundation of British Columbia.

Canada ranks fourth in the world in terms of revenues derived from the export of engineering services. British
[ Page 1218 ]
Columbia consulting engineering firms have been at the forefront of this export market for many years. The world export of services is growing at an increasing rate — 12 percent average growth rate, from 20 to 26, and 18 percent in 2007.

A healthy B.C. consulting engineering industry is critical to growing high-value employment opportunities in the province. The continued success of the B.C. consulting industry is threatened by outdated legislation affecting the personal risk of individuals and the competitiveness of B.C. consulting businesses.

B.C's current Limitation Act is outdated, having been enacted in the mid-'70s. It sets the ultimate limitation period at 30 years from time of discovery.

Premier Clark's government recognizes that the economy exists to create jobs to sustain families and communities and that good jobs are the foundation of strong families. To strengthen the economy and help create jobs, the B.C. government should modernize the Limitation Act and reduce the ultimate limitation period from 30 years to ten years.

Modernization of similar legislation exists in several other Canadian provinces: Alberta, Saskatchewan, Ontario and New Brunswick. This has occurred in all these provinces. The national trend of these reforms is to shorten the ULP to between ten and 15 years.

CEBC supports the modernization of the B.C. Limitation Act, particularly the reduction of the ULP from 30 years to ten years, matching the current legislation in the province of Alberta.

A reduced ULP means companies would reduce their insurance costs over extended periods. The money saved would make B.C. consulting firms more competitive and contribute to the hiring of new employees, benefiting B.C.'s small business and creating jobs.

B.C. families would benefit from more people working. As Premier Clark remarked in her inaugural speech, good jobs are the foundation of strong families.

Competition between professionals and provinces will be enhanced when the playing field between professionals is levelled and when interprovincial trade barriers are eliminated. The B.C. consulting engineering industry should not be put at a disadvantage by outdated legislation.

As a result of lower insurance costs, B.C. taxpayers will benefit from this reduction in the costs of engineering services.

B.C.'s current liability regime will continue to be a deterrent to B.C. engineering graduates considering a career in B.C.'s consulting engineering industry. This has the potential to adversely affect the future of the industry. Numerous professional groups representing dentists, chartered accountants, certified general accountants and architects support the reduction of the ULP to ten years — that it is outdated and unfair — to improve service delivery.

In support of the change to the ultimate limitation period, I would like to just quote from the APEG president, Frank Denton, who said:

"Over a period of 30 years changes in professional standards, development of new technologies and the evolution of social values make fair assessment of a professional's conduct at the time of an error difficult. It also complicates the administration of justice, as evidence needed to prove or disprove a claim can deteriorate, written records become lost or destroyed, and the memories of witnesses either fade or the witnesses themselves are no longer available."

In conclusion, reducing the ULP is in alignment with B.C. government initiatives. Reducing the ULP will result in economic and social benefits that support a families-first approach to the economy and jobs. The Ministry of Attorney General has long proposed reducing the ULP. CEBC currently supports this recommendation, and it was included in our response to the September 2010 White Paper on Limitation Act Reform: Finding the Balance.

Reducing the ULP will reduce red tape. Doing so creates the opportunity for more development, more jobs and a stronger economy. Finally, reducing the ULP will make B.C. firms more competitive globally, increasing knowledge-economy exports.

R. Howard (Chair): Thank you.

[1230]

B. Ralston: Thank you. I'm familiar with the ultimate limitation question. Certainly, you've been lobbying for many years, and thus far the government has not responded.

My question was beyond this change. Is there anything else that you would look to the government to do to increase the ability of your members to gain contracts abroad? Certainly, the consulting engineers, given the revenue stream that you speak of, are very successful in exporting engineering services. Is there anything else that would be on your list of things that a government might do to improve your opportunities to get the economic benefits for this province?

S. Fleck: I'll take that question. We have a number of things that we'd like to see moved forward, but we see our lack of success in moving the ULP issue forward as evidence of needing to focus on getting one thing done, rather than putting 20 things on the table and getting nothing done.

We would be very pleased if we could see this change in the Limitation Act and have that moved forward. I'd be happy to spend some time with you and explain some of our other initiatives and issues.

B. Ralston: I'll take you up on that.

D. Donaldson (Deputy Chair): Thank you for the presentation. I have another question around an issue
[ Page 1219 ]
that affects the competitiveness and employment opportunities of engineers. It's been brought to our attention — engineers in the past year discussing the TILMA, the Trade, Investment and Labour Mobility Agreement, signed unilaterally by the government and now being expanded to Saskatchewan under a different name.

The concern that was raised was the additional paperwork required by engineers when signing off and making applications for jobs — you know, the same amount of requirement on a $50,000 bidding project compared to several million. I'm wondering if that issue is still of concern — the amount of time that that agreement has now created for engineers in the proposal phase versus what was the case before.

S. Fleck: The short answer is: yes, that's of concern. We currently have an initiative to put together a joint presentation to government in B.C., Alberta and Saskatchewan — in fact, it was the subject of some discussion today — to bring forward concerns that exist across all three jurisdictions around what's now known as NWPTA, northwest something trade agreement. I can't remember what it is. It's being implemented. So yes, it's very much at the top of our list, and we have had a significant level of government engagement around this issue.

Again, we'd be happy to have off-line discussions and explain to you what our concerns are. I guess the most significant is that we are a very strong proponent of quality-based selection, otherwise known as QBS, which says you want the engineers who are designing the bridges that you travel on and the water that you drink to actually be qualified to do that and not necessarily just be the lowest-priced service provider.

There are issues within the current legislation that we see as inhibiting QBS from being applied.

D. Hinton: Also, I'd just like to add that changing the Limitation Act really supports the NWPTA, in terms of putting B.C. consulting firms on an equal basis with those of Alberta, Saskatchewan and Manitoba. Currently we're way behind, at 30 years after discovery, which puts you at risk forever.

D. Hayer: Are there any people opposed to making these changes? Most people I talk to seem to be very supportive. They seem to say: "If other provinces can do it, why can't B.C. do it?" Do you know if people are opposed to it? What are the objections?

S. Fleck: We understand that the last time this came forward, which would have been around 2004-2005, the significant opposition came from the trial lawyers.

D. Hinton: We certainly have a lot of support from the other professional agencies. We have discussed that in joint committee with them. If you'll speak with those associations, you'll find there's a lot of unfairness there in a number of areas — the dentists, for one. If a dentist does some mouth surgery, it's a 30-year ULP, and if a doctor does it, it's six years — the same operation, a whole different risk.

D. Hayer: And the provinces that have changed their limitation, their timeline — have they done it recently, or have they done it for a long period of time?

[1235]

S. Fleck: The other provinces?

D. Hayer: Yeah, the other provinces.

S. Fleck: Yeah, I think Alberta's…. Most of the other changes have occurred within the past ten years. Within the package that we've…. We apologize for not bringing sufficient packages. We weren't actually briefed on how many we needed. It would have been easy to run them off.

Within the package that we left with the organizer there is a presentation that goes through exactly when each of the other provinces changed the legislation.

R. Howard (Chair): Excellent. Thank you, Steve. Thank you, Doug. I appreciate your comments and for taking the time to come see us today.

Next up we have the Association for Mineral Exploration British Columbia — Rick Conte and Gavin Dirom.

Welcome, gentlemen. You probably know the rules. You've got 15 minutes in total. At about ten minutes I'll give you a little reminder. You can either wrap it up and take questions, or you can go all the way through if you like.

G. Dirom: Sounds good. Thank you, Chair. I appreciate that.

Yes, my name is Gavin Dirom. I'm the president and CEO of the Association for Mineral Exploration B.C. I have vice-president Rick Conte with me here today.

Before I go into our paper, I thought I'd just highlight — and it's with you today — the Mineral Exploration Roundup conference. It's a brochure you have in front of you that I think exemplifies our sector's stature in the world. This is the premier mineral exploration conference in the world. It attracts upwards of 7,000 delegates a year. We've been hosting it for almost 30 years now. In fact, on the economic side it injects approximately $5 million to $6 million into the local Vancouver economy year over year. I thought I'd just touch on that. Of course, everybody's more than welcome to attend.

More formally, the association was established in 1912. We have upwards of 4,000 individual members and 330 corporate members. It demonstrates, again, that B.C. is
[ Page 1220 ]
essentially the centre of excellence for mineral exploration and development in the world. There are almost 800 companies in our sector based here in the province. There are hundreds of supporting companies on the technical side, the legal side, the accounting side, etc. It really does form a centre of excellence here in B.C.

Importantly, and many of you are aware of this, almost $3 billion is raised in risk capital here in Vancouver. But in fact, not much of that is then reinvested or invested in our back yard in terms of mineral exploration here in B.C.

One of our overriding messages today is: how can we help the government to encourage investment here in British Columbia, and how can we help create the safe haven, as it were, for global investors around the world during these financially challenging times?

Also, I want to emphasize that B.C. has a tremendous history, a positive legacy, in mineral exploration development. It's a foundational component of our economy.

On the mining side the production equates to almost $7 billion in revenue. Arguably, the return on investment is significant in terms of the number of projects we have and the opportunity it presents to our future.

Specifically, there are more than 350 mineral exploration projects in B.C. presently. There are 20 major mine projects active in this province. Last year, thankfully, we saw a doubling of exploration expenditures to almost $322 million, up from $154 million, and almost $1.5 million spent on construction and development of new mines or expansions. But we cannot take that for granted. We need to nurture that and encourage further investment.

Over the next five years we have the opportunity to substantially increase exploration expenditures beyond the peak that occurred in 2007 of $416 million. We need to do that through encouraging an open-for-business culture within government, strategic investments and, most importantly, a very robust and efficient permitting process.

I'd like to add that even with significant improvements in public policy since 2001 — whether it be with tax incentives, recent investments of Geoscience B.C. and investments into some of the human resources challenges — we are still faced with the reality that we're being out-competed for investments by other jurisdictions, not only in Canada but around the world.

[1240]

To address this, AME has four recommendations to put forth to this committee, the first one being: invest in effective and efficient permitting processes. Again, one of the best indicators of success for exploration is to see the project move through the various stages of permitting and review and move into construction and operation. Right now we do not have an efficient process, and in a competitive investment world, it's critical in order to attract the global investors.

The future of mining — and many folks forget this — is through exploration. There won't be a mining industry in B.C. unless the exploration sector is encouraged and allowed to have access and to test the resources that we know are world-class and exist. It just takes many years to build the support towards a project. Right now there are hundreds of notice-of-work applications that are with the government and that essentially created a backlog. It represents upwards of $150 million in lost opportunities in this year alone.

We do know that there are efforts to improve this, and we are certainly appreciative of that. So recommendation 1 is to develop and implement an effective, efficient and transparent permitting review process and to ensure that government agencies have the resources they need to address permitting and First Nations consultation requirements in a timely manner. The amount of time it takes right now to consult with First Nations, where there are no timelines, is stifling investment in the mineral exploration sector in B.C.

Recommendation 2 relates to education and training the next generation, specifically aboriginals. I think this is a golden opportunity before us to relieve the looming shortage of workers we have and the capacity limitations in the coming years. It's estimated that in the B.C. exploration and mining sector, there'll be 10,000 new jobs created over the next ten years due to these projects coming on line.

One of the very successful education and training initiatives, recently over the last two years, which we've helped to create, is something called the B.C. Aboriginal Mine Training Association, often known as the BCAMTA. Now, it was federally funded with $4.4 million. It has upwards of 700-plus registrants, and it has created over 202 jobs for aboriginals in the mining sector in B.C. Nothing else exists like this in B.C.

Unfortunately, we do know that the funding for this program will cease as of March 2012, so we're seeking government support for this organization, which has had tremendous success. It's early days, and what it does is that it enables the capacity development of aboriginals, who of course are generally located near these future minesites. It's the workforce of the future. It builds capacity. It improves the understanding of our sector and ultimately allows further tax revenues back into government.

So recommendation 2 is to support aboriginal capacity-building and economic independence by saving the B.C. Aboriginal Mine Training Association with a $5 million commitment. That might be a joint venture with the federal government or provincial government, what have you, but we'd like to work with government on that to see how we can best accomplish that goal. I should stress that our early, preliminary numbers show a return on investment of approximately 3 to 1. That's due to government incurring less support payments, and a
[ Page 1221 ]
number of newly employed workers who pay taxes versus the funding to date.

Recommendation 3 is investing in public geoscience. Now, I did state at the outset that we're very appreciative of the $12 million towards Geoscience B.C., and we certainly are, but just a reminder to the government that Geoscience B.C. represents half of the whole. The other half, and very much importantly, to recognize is the B.C. geological survey, which has been here for over a hundred years. It is government's survey that serves the interests of the public, and it's very important to recognize that and to support the survey.

What's happening today is that the budget for the survey has been drastically reduced, and workload has increased, given all the gold rush that's actually occurring, which is positive here in B.C. So at a time when their services are most needed and the public most requires the provincial government geologists' perspective on things, they're not there to support that need.

[1245]

What the survey does, which differentiates it from Geoscience B.C., is that it's particularly important to smaller companies and locally based prospectors. They act, as well, as government's eyes and ears on the ground, identifying issues with First Nations, identifying issues with NGOs, identifying issues that are perhaps transboundary in nature — whether it's Montana, Idaho, Alaska, Alberta or Yukon. A government geologist has the ultimate role to play there, and industry can not fulfil that role at all with respect to those issues or land use planning and so forth. It's the government geologist that's critical in that case.

I'd also suggest that recently a key role that they could play more is emergency geohazard identification and planning. We had the recent earthquake, and I think that should be a reminder to everybody that we are in a seismic zone. Having government geologists well informed and available to work with the public on developing plans and to identify risk is critical to the future.

Right now northern B.C. has no regional geologist. I know there is work to fill that vacant position, but it's important that we recognize that the majority of the $322 million spent last year in exploration, over 75 percent, was spent in northern B.C. It's incumbent, I'd suggest, that the government have at least one, if not two, government geologists that are promoting the north, working with local governments and First Nations interests and attracting further investment to the north.

Overall, public geoscience provides an estimated return on investment of approximately 5 to 1, and that's through further exploration and further development.

Recommendation 3, essentially, is to increase the base funding for the B.C. geological survey to 2008 levels, maintain a staff of five regional geologists and conduct field programs to improve the public's understanding of B.C.'s mineral development potential.

Recommendation 4 is both a thank-you and a recommendation. We do appreciate that the government has made huge strides in creating tax incentives that are supportive of our sector. Two such programs are the mineral exploration tax credit and the B.C. mining flow-through share program, both of which return greater than 20 percent to the investors.

Both have been extended, one to 2017 and the flow-through share program to 2013. However, this is, I think, a non-partisan issue. It's important for industry, and I think it's always been shown to be a benefit. So recommendation 4 is to make the mineral exploration tax credit and mining flow-through share programs permanent to encourage companies to explore for more here in B.C., in their own back yard, to attract more of that $3 billion that's raised in venture capital here in B.C. and to reinvest it into B.C. projects.

In conclusion, these recommendations are focused on the four critical areas that we believe will contribute immediately to more global investment and a stronger exploration and development sector here in B.C. We appreciate this opportunity, and I welcome any questions.

R. Howard (Chair): Excellent. Thank you. We have one question, a quick one from MLA Ralston.

B. Ralston: Both you and the mining association made a similar submission last year — that there are simply not enough people in the relevant ministries to get the permits out the door to get the projects started. Is it your view that the current configuration with the reorganization to a ministry of natural resources is inhibiting your wish that this process be accelerated?

Secondly, on the aboriginal training. My colleague Doug Donaldson had to go to do a radio interview. He said that in Northwest Community College, there is a program training specifically aboriginals for mining work. It doesn't have core funding. Is that the sort of program that you envisage support for from the government?

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G. Dirom: I'll address the second question first. In fact, Northwest Community College is a member of the BCAMTA — the B.C. Aboriginal Mine Training Association — so they are partners. Both, I think, could be seen as very successful. In fact, the college won the Premier's Award and, I think, has done great work. They are already partners. In fact, they sit on the board of the BCAMTA. Both would benefit by this funding.

In terms of the first question, the restructure of the government has played a role in some of the, I guess, lack of efficiencies on the permitting side. But I think more important is still the fact that you have a difficult and challenging time here retaining staff, some
[ Page 1222 ]
excellent experts, in government — and to ensure that there's a transition to the new generation. So there is a legacy issue there. I think we have a short window of opportunity to mentor the new government employees and build that expertise that we're renowned for.

R. Howard (Chair): Excellent. Thank you, Gavin. Thank you, Rick. I appreciate you taking the time out and making a presentation.

We'll break now for just about one hour and start up at 1:50.

The committee recessed from 12:51 p.m. to 1:53 p.m.

[R. Howard in the chair.]

R. Howard (Chair): We'll reconvene for our afternoon session. I note that we have, first up, the British Columbia Medical Association — Rob Hulyk and Dr. Nasir Jetha.

Welcome, gentlemen. As you know, you've got 15 minutes in total. At around ten minutes I'll just give you a hint. You can either stop and take questions at that point or thereabouts, or you can keep going, if you like, and you don't have to take questions. Welcome.

N. Jetha: Good afternoon. My name is Dr. Nasir Jetha, and I'm the president of the B.C. Medical Association. We represent more than 9,000 practising physicians across the province. I am a pediatrician, and I have been in practice for well over 25 years in Vancouver. I admit at the B.C. Children's Hospital. I can tell you that there is nothing more challenging or rewarding than caring for a sick child, and I would not trade it for anything.

On behalf of B.C. physicians and our patients, thank you for the opportunity to be here to offer suggestions for the provincial budget of 2012. Time at these sessions is always short, and given that health care represents the single largest expenditure in government, I'm going to get right down to our recommendations for the 2012 budget.

First, we must continue to collaborate and expand our efforts in primary care. If we hope to control health care costs, we must do so based on what has proven successful. Second, we must push even harder on prevention, both in terms of clinical services and also on the lifestyle choices of British Columbians.

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Third, we must continue to improve access to services. A healthy population is critical to a productive economy. Evidence shows that acting early makes people healthier and saves dollars later on. This is not the first time we have made these recommendations. The difference is that we can no longer afford to wait. We need to act.

Physicians know that to help patients, sometimes we need to have difficult conversations. This is what we are asking of you. These are important years. What actions are taken today will shape the system that will face incredible challenges in the next few short years.

For example, in 2015 one in six British Columbians will be over the age of 65. B.C.'s population is growing at 1.2 percent a year, but the population over 80 is growing at about 3.5 percent per year. Some 45 percent of B.C.'s population today is overweight or obese, which is actually the lowest in Canada. But consider that in 1985 that number was only 11 percent. Obese Canadians are four times more likely to have diabetes and three times more likely to have hypertension. These are just a few of the issues facing our province.

Now let me give you the good news. In fact, I can tell you about where British Columbia is leading the world in system reform. Today 600,000 B.C. patients with chronic diseases such as congestive heart failure and hypertension are receiving better care. This is being done through the GP services committee, or GPSC — a joint effort between the BCMA and the B.C. Ministry of Health.

The results of the initiatives, which really took off in 2006, are clear. British Columbia has the lowest hospitalization rate in Canada for seven chronic conditions. Independent evaluation has shown $85 million in avoided costs from improved care of chronic diseases through access to a regular family doctor. These avoided costs are mostly from averted hospital or emergency room visits. We have seen a 29 percent drop in mortality for congestive heart failure patients. We know a strong primary care system improves outcomes, makes patients happier and avoids significant costs in the acute care system.

Today over 3,500 primary care physicians are involved in the GPSC. We have people from around the world coming to study what we are doing. This is very positive, and we should be proud of the work that has been done so far.

Now let me turn to the issue of prevention. Last Thursday I attended the Minister of Health's speech at the Vancouver Board of Trade. Quite appropriately, the minister cited the need for us to dramatically increase our efforts around prevention, particularly around diet and exercise. He's absolutely right.

The BCMA has spent considerable effort in recent years on this area. We have advocated on everything from combatting childhood obesity, reducing salt intake, increasing exercise, banning cell phones while driving and improving road safety. We have also identified the most common effective clinical measures our system should take in terms of clinical preventative services. This includes various types of screening, such as for cancer and problem drinking, to other measures, such as immunization or daily aspirin use. These are all proven to reduce costs and illnesses and should be in place for all British Columbians at the appropriate age.

I do, however, wish to provide a caution. One issue raised in the minister's speech was the notion of explor-
[ Page 1223 ]
ing how to hold people accountable for their lifestyle decisions. On the surface, this is appealing, but the reality of implementing it in our public system is difficult. Smokers are always used as an example when it comes up, but once we get past them, it becomes more complex.

[1400]

How do you separate the injured skier from a person who eats too many hamburgers? We believe incentives are the best approach, and we will have more to come on that in the coming weeks. This matches what the public said that they want and is also what is most likely to survive, given the current legislative environment in Canadian health care.

The last area I'll speak to is improving accessibility in our system. This is the number one concern of British Columbians when it comes to the health care system, and we cannot forget this when discussing the upcoming budget.

The BCMA has provided numerous recommendations and reports on how to improve access across all parts of our system. These include improving efficiency in our operating rooms, improving how we manage and coordinate our emergency departments with other areas of the hospitals, reducing wait-lists, expanding capacity and flexibility in our community services and residential care facilities and ensuring that people have access to a family doctor. Lastly, we must move away from block or global funding and instead focus on having funding follow the patient. It improves both access and accountability.

These are complex areas of discussion. However, my point is that we cannot stop having these conversations even in times of fiscal challenge. If anything, we need to have more of them.

I am leaving a summary sheet for you where you can look for more information on these topics. I will conclude with a few comments about how we move forward.

Today health care expenditures are growing by more than 6 percent per year. This increase results from growth in inflation and demand for medical services. We know that the government has expressed an interest to bend the cost curve to a level of about 4 percent. To be successful, we need to ensure that we move forward in a manner that is properly integrated with our system and focuses on improving efficiency and outcomes. Failure to do so or acting too quickly will risk cuts in services or longer waits.

Therefore, it is critical that the government continues to collaborate if we wish to achieve this goal without causing problems. This means that we will need to continue to support what is working in our system. The evidence, outcomes and opinions of patients are clear. Reducing access and increasing wait times ultimately costs our system more, worsens outcomes and increases stress on families.

We must have the courage to face our challenges head-on. Our system is not yet prepared to meet the challenges our society will throw at it in the coming years. And not acting will cost even more down the line.

But we are making inroads. Health care remains the number one priority for British Columbians and for a good reason. We need our society to be healthy and assured they can get the care they need when it is required. Our patients and our economy depend on it.

Thank you for your time. I'll be pleased to answer any questions you may have.

R. Howard (Chair): Excellent. Thank you.

We have a few questions.

D. Donaldson (Deputy Chair): Thank you for the presentation. You brought up some points about prevention and screening. It reminds me of the situation in rural areas. You talked about screening for cancer and problem drinking. I know the statistics in the northwest are…. People are four times more likely to die from medically treatable diseases than in a standard population.

I've heard from physicians that screening, whether it's mobile clinics or screening in facilities…. The ability to access screening has decreased. Is that a pattern that you've seen as well with your association in the rural areas?

N. Jetha: Yes, certainly. We have challenges in how we deliver services in our remote areas, so that is an issue. But we at the BCMA are trying very hard to make sure that the level of delivery of our care is equivalent everywhere across the province now. It's easier said than done because there are many, many issues about human health, resources and facilities.

[1405]

I'm reminded that we did bring out a policy paper on that, and we'll be happy to share this with you.

R. Hulyk: Just to tag on. One of the things that's outlined in that paper is the call for a lifetime prevention plan. There are identified in here a number of both clinical and lifestyle prevention services that have the best cost-effectiveness to them. Those are the ones that we believe should be pursued at an age-appropriate level. They're outlined in the paper, and they're referred to in your summary sheet.

B. Bennett: As you said in your presentation, the society is growing older. That includes physicians, and they're retiring faster and faster. In some parts of the country and in particular some parts of this province, there's a chronic shortage of family physicians. Other than to do what we have done already, which is to double the number of physician training spaces at our universities — and,
[ Page 1224 ]
of course, we can increase that — are there other things that government could do in partnership with the BCMA to address the looming shortage of family physicians in the province?

N. Jetha: That's a very important question, and I'm glad it was asked. As many of you know — and this is common knowledge — well over 200,000 British Columbians cannot find a family doctor. That is how acute this problem is.

The physician health survey poll that we took at a national level — and that is also reflected in B.C. — is that our doctors are aging, as you mentioned. Only a small percentage of our doctors — about 35 percent — are less than about 40, I believe. So the bulk of our population is aging. Now, one initiative is that we have doubled since the year 2000 when we were taking in 120 medical students. We are sitting at 285. As a matter of fact, I just addressed them as the first incoming class this morning.

That is one way of doing this. There are initiatives that we would like to look at. We have a whole pool of adequately qualified international medical graduates, and we have to make good use of them. I do understand that all international medical graduates do not fall in the same category. There are international medical graduates…. These are children of Canadians who have gone away to study in Ireland, Australia, the Caribbean. They have good programs, so they should be absorbed in our human health resource pool.

R. Hulyk: One of the other things that we can do is continue to collaborate on things that have been working, such as the GPSC, where we've seen that by supporting family physicians in primary care, it makes it an attractive place to practise. It's rewarding. We know that the evidence is there in terms of both patient and physician satisfaction — that it's worked and it saves significant costs down the line.

So just to tag on to that, we want to make sure that it remains a place that physicians want to work.

R. Howard (Chair): Excellent. Thank you, gentlemen. We've expired our time. It goes fast. Thank you, Rob, and thank you, Dr. Jetha, for taking the time to come out and talk to us.

Next up we have Coast Forest Products Association — Rick Jeffery.

Rick, as you're getting set up, you probably know you have 15 minutes. Some people like to go ten for statement and five for questions. You can go all through if you like. I'll let you know when you're at about ten. Welcome.

R. Jeffery: Thank you for having me again. Lots of familiar faces.

You've got your presentation in front of you. I'm going to just hit the highlights. I'd rather talk to you than present you with a soliloquy.

Basically, the take-home message for you around current market conditions is that they're better now than they were for the last three years, but they're not great. So we're calling for stability, certainty, focus and cost containment as we face the imminent what looks like double-dipping global recession and its effect on the forest industry.

[1410]

But I'm not going to depress you with all that stuff. What I do want to talk to you about is the future, and I want to tell you that the British Columbia forest industry can be a leader in the bioeconomy era that's in front of the globe today.

We can be a leader in green energy, energy efficiency in terms of building products, building systems. We lead the world currently and can continue to lead the world in terms of sustainable forest management, carbon management — those kinds of things. And in front of our industry is the opportunity to develop a number of biomass-based products. I'll talk about that in a little bit more detail.

There are three strategic areas of growth for us: on the lumber side, offshore markets and the partnership that we have with FII. Jobs, tourism and investment in our offshore markets like Japan and China, U.K., EU — those kinds of places — are showing a lot of benefits. We've got 28 sawmills that have started up in the last couple of years, a lot of that directly attributable to China, which is directly attributable to the partnership between the industry and the province and the federal government through our offshore programming. So we hope that you will continue to recommend that those programs continue to be funded by the province.

The second opportunity is non-residential. The poster child for that, of course, is the Vancouver Convention Centre and the speed skating oval. There is in this energy efficiency, carbon storage world that's on us the opportunity for us to expand beyond residential construction to non-residential construction using wood. Things like six-floor apartments, wood-first policies — those kinds of things — are eminently helpful in advancing the non-residential cause.

Then lastly, the bioeconomy, which includes biofuels and new products like nano-crystalline cellulose and lignin, which are extracted from the pulping process and have great opportunity as a raw material to develop a whole new line of products in automotive and aerospace and places like that where you wouldn't normally think wood would belong.

So we're in a transition. We're on the cusp of trying to take advantage of these opportunities, these new markets, these new products, to augment and complement
[ Page 1225 ]
the existing traditional product base that we have, which is also world-class.

So what do we need? We need stable hosting conditions. We need continuation of partnership with government so that we can attract the investment that's required to realize on these opportunities. And these opportunities, of course — why you would care about them is because they create jobs, they create economic activity across the province, and they drive government revenue, and so you have a big stake in them.

Unfortunately for us, one of the best tools we had available to us to drive the investment that is needed in the industry was the HST. The repeal of the HST, of course, now makes that inducement vehicle unavailable to us. We also face transitional uncertainty, so we say to government: please tell us what the rules are sooner than later so that we can get on with trying to run our businesses as we make the switch back to that regressive, ugly, awful, investment- and job-killing PST. Are you guys paying attention over there?

So we don't have that. And we still need to invest in productivity, innovation, new markets, so we've got to work with government to figure out how we can do that without the HST. So let me get to it.

On taxation, we're talking about refundable plant investment tax credits that you can carry forward. Again, those will facilitate capital investment and investments in productivity in these new product mixes and new technologies.

Also, we once again say you should work with the federal government to ensure that they are expanding and enhancing capital cost allowances in the federal income tax system. So we're saying the province should do it, and so should the feds. That will help on the investment front.

[1415]

Research and development grants and tax credits would also help as we bring some of these bioeconomy products from precommercial and research kinds of levels to commercial levels. That's always the risky part, and that's an appropriate place for government to play a role.

For instance, nano-crystalline cellulose. We now have a facility through FPInnovations that actually can produce this stuff in enough quantity that we can give it to the Du Ponts and 3Ms of the world so that they can figure out what they can make out of it. But we need partnership and we need help in order to get to the commercial stage.

On carbon tax, we say freeze the carbon tax. In the short term there are a bunch of perverse leakage issues. For instance, the Chevron plant that refines gasoline here has to pay carbon tax. Its competitors in Alberta don't, and they have a pipeline that sends the gas to B.C., so we're punishing a B.C. company. You can bet that the investment is not going to flow to Chevron in British Columbia; it's going to flow to Alberta. So there are things like that you need to deal with.

We also say defer cap-and-trade, given the evolution of global circumstances, and do that until 2015. In the meantime, take a hard look at the carbon tax and the cap-and-trade proposals, and do a complete — missing right now — impact-and-benefit assessment of both of those things so that we have a better understanding what those are. Once you've done that, you may have to look at legislative changes to accommodate what you find. So that's carbon tax.

On economic policy, notwithstanding the big hole in the budget, government should continue on its mandated legislated timeline to balance the budget.

We call for First Nations tenures to be sourced from B.C. Timber Sales areas to start to get First Nations with replaceable tenures and also to look at the current revenue-sharing agreements that the Crown is signing with them.

We think that there's probably some room to improve those revenue-sharing ratios in a manner that increases capacity for First Nations and aligns their interests with our interests. There's some regulatory stuff in there. I won't touch on it. You can read it.

Last thing on the economic policy is that we think government and the public bodies associated with government should be early adopters of innovative home-grown products and services. A good example of that is that we've spent a bunch of money developing sound-abatement fencing for along highways. That's made of hemlock, which is a key species on the coast and could replace the concrete fencing that you see. It's half the price. It stores carbon. It assists the forest industry.

It's a hybrid product. The posts and sill plates are still concrete, where the actual bulk of the fencing is wood. You adopt that and use that on something like the South Fraser perimeter road, and it gives us the ability to showcase it around the western U.S., where the bulk of this product is used. It creates jobs and that kind of stuff. So just one example of how government procurement policies can help.

On program spending, I touched on FII. We say continue that funding at the current levels. That partnership is invaluable for driving offshore markets, which is one of our key strategic areas.

We also say that there's a bunch of money being targeted at FPInnovations, UBC, UNBC, the other universities, and so we need to continue that funding in research and development of new forest products, new forest products markets.

Municipal taxation. We support the creation of a municipal Auditor General. That's another area in the post-HST Armageddon that we can look at reducing the tax load on business. We pay more than what we should be, so we think that an office of the municipal Auditor General is a good thing.
[ Page 1226 ]

As one of the mandates for that person, they should look at the tax ratios and make recommendations to the House, and then we'd expect government to implement those recommendations. That would probably look at things like caps — ratio caps and those kinds of things.

I know that the province doesn't want to tread on the territory of municipalities, but the thing is a little bit out of control, and every year that I've been here, this particular issue has been on the list.

Those are the highlights. I'm happy to take questions.

R. Howard (Chair): Thank you.

D. Donaldson (Deputy Chair): Hi. Thanks for your presentation again.

R. Jeffery: Always a pleasure, Doug.

[1420]

D. Donaldson (Deputy Chair): Yeah, always a pleasure.

You speak of transitional uncertainty in regards to the HST. The government is on record as that process taking 18 months. Would it be the position of your association that less of a timeline on that, a more reasonable timeline of 12 months, would reduce transitional uncertainty?

R. Jeffery: We're not too concerned about the timeline. We're just concerned about making sure we know what the rules are. So if it takes 18 months, fair enough. If that's what it takes, great. If we can do it in 12 months, great. But what we want to know is what the rules are. We're all kind of standing around going: well, what's next?

This isn't a business where you invest on 12-month increments or 12-month periods. We're making 15-, 20-year investments. We just need to know what the rules are from now till then.

D. Hayer: Thank you very much, Rick. A very detailed presentation.

My question is regarding…. You said that we should continue to balance the budget by 2013, as we said in our legislation. You know there's a $458 million deficit because of the HST being eliminated.

The recommendations that you made…. Do you see them helping to reduce the $458 million deficit that we are projecting right now, or will it increase? Will this generate more revenue, or will it be revenue-neutral towards the deficit — the suggestions you are making?

R. Jeffery: I think that what we are recommending here creates a healthier, growing forest industry and allows us to start to capitalize on these market opportunities — places like China and the new bioeconomy ones. That generates jobs. That generates stumpage revenue. That generates income tax revenue. It generates corporate tax revenue. That helps fill your hole.

It's no secret. We used to be a $1.5 billion tax generator, the forest industry. We're nowhere near that today. We can return to those levels if we do some of the things we're talking about here, and that helps you fill your budget hole.

B. Ralston: You've mentioned research and development in two places. Obviously there is direct government investment, which you talk about on the last page. But I'm interested in your request for direct research and development grants or refundable tax credits.

As I understood the scientific research and experimental development tax, SR-and-ED, that's exactly what it is: a tax credit for research that's done…. Some criticism is that it covers normal business processes, but certainly, it's a big program. It's federally run, but the province kicks in.

Have you made a submission to the federal government about the effectiveness of that program? Or do you have any views on it?

R. Jeffery: We haven't directly, but we work closely with FPAC, which is Forest Products Association of Canada, based out of Ottawa. They've been on the federal government on the SR-and-ED stuff.

It doesn't work very well on the forest industry for various reasons. We've been trying to get them to fix that, to fix the things that we see are deficiencies there.

It won't surprise you the federal government's kind of unwieldy to deal with. We haven't been making a lot of progress on it.

B. Ralston: Would you forward to the committee a copy of your submission — the FPAC submission?

R. Jeffery: It'll be all FPAC stuff. Yeah.

B. Ralston: Sure. That'd be great.

R. Howard (Chair): Excellent. Thank you, Rick, for taking the time to come out and talk to us today.

R. Jeffery: It's always a pleasure. Bruce always asks me to send something to him, you know.

R. Howard (Chair): Next up we have the Coalition of Child Care Advocates of B.C. — Sharon Gregson and Mab Oloman.

Welcome. You've got 15 minutes. At about ten I'll give you a reminder. You can either stop then for questions, or somewhere thereabouts, or you can use the whole 15 minutes. But it'll just be 15.
[ Page 1227 ]

S. Gregson: Understood. Thank you very much, and thank you to all of you — the ten of you here doing your bit for public service. I appreciate that these are a lot of pieces of information to sit through for the time that you're on this committee.

I'm Sharon Gregson. I'm with the Coalition of Child Care Advocates. My colleague is Mab Oloman. We're here today to talk to you about child care and the appalling lack of child care in this province.

In B.C., as in the rest of Canada, access to child care is actually a right. However, that right is not yet being honoured. Subsequently, we have a crisis in our province which is impacting children, women, families, workers and, sadly, our economy. Commercial child care chains, which are on the rise in B.C., are adding to the problem.

The solution to the crisis, and a significant benefit to our economy, is the plan for a public system of integrated early care and learning. That's the booklet that you have before you.

[1425]

When I presented to this committee last year, there was a draft briefing note on this subject that was distributed to you. This is the finalized version now.

As I mentioned, child care is a right as guaranteed under the UN convention on the rights of the child and numerous other pieces that Canada and B.C. are signatories to. But after 30 years of advocacy led by grass-roots organizations, we still haven't fulfilled our commitment to children and families.

Despite research from countless academic, economic and healthy outcome studies — you will probably be familiar with the human early learning partnership at UBC, which has an international reputation for quality research — we still have an appalling rate of vulnerability of young children in our province. B.C. child care is in a crisis. Families are experiencing very long waiting lists for child care services, particularly if they have a child under the age of 36 months, and high fees.

Where I work in East Vancouver, which you might expect to have lower fees, if you have a two-year-old, you're paying $1,195 a month to me for your child care. This is in a group, not-for-profit situation. If you have a four-year-old, you're paying $820 a month. So if you have two children — which is very common for families, a two-year-old and a four-year-old — you're paying over 2,000 after-tax dollars a month.

Child care fees are high for parents because, unlike other services — like libraries, parks and schools — that receive public funds to cover most of their operating costs, child care in B.C. is primarily a user-pay service, a family's second-highest expense and often more expensive than post-secondary education. In the handout that you have, there's a little bit of a chart that gives you a snapshot of child care fees around the province.

In B.C. in 2008 there were 567,000 children under the age of 12 in our province. Of those children, 358,000 of their mothers were in the paid labour force. But this year only 97,000 licensed spaces. That 97,000 comes from a recent press release from MCFD.

The average wage of an early childhood educator, college-educated, is just $16.46 an hour, with no pension plan, limited health and welfare benefits — clearly not a wage that's commensurate with the level of responsibility that we entrust those caregivers.

The false solution to this crisis is commercial child care, the big-box commercial child care chains. From an international perspective, the very worst policy approach to child care is that where public funds are delivered to services on behalf of parents through vouchers or subsidy payments.

The largest proportion of the B.C. child care budget goes to subsidies. Actually, as an operator I received an e-mail today from MCFD telling me that the small capital grants available of $2,000 a year to child care providers are cut off for the remainder of this fiscal year and being diverted to subsidies.

When transferred to commercial child care providers, funds delivered through subsidies go directly into their profits. The strongest child care systems are those that are directly funded — public child care services that provide adequate spaces for the children that need them, decent wages, higher quality and lower parent fees.

In B.C., due to the lack of public policy and adequate operating funding, child care is market-based and provided on a fee-for-service basis. Based on examples from other jurisdictions, there are many concerns related to commercial child care chains, which highlight that corporate responsibility to generate profits can often be put ahead of quality for children and families or accountability to the general public and taxpayers.

The real solution to the child care crisis in B.C. is the plan that you have before you. I hope that you will sincerely take the time to read through it.

We know in B.C. that quality child care is early learning. They are not two different things. They certainly shouldn't be siloed into different ministries, as they are in British Columbia. We know that current policies and approaches do not meet the need of B.C.'s children and families. We know that public spending on the early years is a wise social and economic investment, and we know that quality matters.

There are six highlights of the plan before you. One is a new early care and learning act. That's going to be one of our recommendations — that you consider that act.

Moving child care from the Ministry of Children and Family Development to the Ministry of Education. A new role for boards of education, with mandate and funding to deliver child care services. The development of early years centre networks, building on the current licensed services that exist. Enhancing kindergarten and
[ Page 1228 ]
grade 1 with early childhood educators in the classroom alongside teachers. A workforce strategy to raise the level of education of those working with young children.

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The plan that we're presenting to you calls for child care that costs families $10 a day. You may be familiar with the Quebec model that is so often touted as the best child care in Canada — more affordable and accessible for families. It's $7 a day. We're suggesting a made-in-B.C. plan that's $10 a day and free for families with incomes under $40,000 a year.

People may ask: in this time of economic difficulty, how could we suggest investment in early care and learning? The reason is that after 12 years of such a system in Quebec, economists now have realized, and are publicizing their results of research that shows it, that Quebec's system is paying for itself. That is through mothers' annual income taxes, as well as consumption taxes. The economist Pierre Fortin at the University of Quebec has proven that for every dollar Quebec invests in its child care system, it recoups $1.05, while Ottawa receives a 44-cent windfall. In 2008 in Quebec there were 3.8 percent more women entering the workforce as a result of expanded child care options. The ripple effect of their employment pumped an additional $5.2 billion into the Quebec economy and boosts their gross domestic product by 1.7 percent — certainly an economic windfall that we'd like in British Columbia.

Our presentation also highlights the human early learning partnership information around the vulnerability rates of young children. It's a 30 percent vulnerability rate of children entering kindergarten in this province. The Liberal government, the provincial government, set itself a target of reducing vulnerability to 15 percent by the year 2015. We now have three years to accomplish that goal, and this plan would allow you to do that.

The recommendations we're putting before you today. The child care crisis in B.C. will be resolved and our economy improved when decision-makers and those elected to represent us move forward with this community plan for a public system of integrated early care and learning. Therefore, we recommend that in 2012 the provincial government endorse the plan's vision and commit to immediate action, pass the early care and learning act in the Legislature, commit to bold targets and timelines with a ten-year strategy, and develop a stable five-year budget with new funds to fully implement the plan.

I know this is a lot of information for you if you're not already a child care advocate. I thank you, and Mab and I will be happy to take questions.

R. Howard (Chair): Excellent. Thank you very much for taking the time and making an important presentation.

We have a question from MLA Donaldson.

D. Donaldson (Deputy Chair): Hi. Thanks for the presentation again this year. I'd like you to elaborate a little bit more on productivity. We hear from other presenters today, mainly from the industrial sectors, around productivity in B.C. My question is…. At the basis of productivity is human capital, and you touched on some of the advantages to productivity of investing in an early care and learning strategy. Are you seeing that in other jurisdictions, and can you expand on that a bit?

S. Gregson: Absolutely. I think it's twofold. One is that if we invest in human capital in the early years, we have children who are arriving at kindergarten better able to learn and be successful throughout their educational career, more likely to go on to be successful in the workplace. That's one piece of the productivity argument.

The other piece, though — proven in Quebec, you know, a Canadian jurisdiction — is investing in an early care and learning strategy, having more mothers working. With the baby boomer generation, more people retiring, we need as many people working as possible. From more employment income taxes from women working and more early childhood educators in the workforce, and then more consumption taxes — all those people spending the money that they're earning — we're seeing more productivity and an impact on our economy, a positive impact.

J. Thornthwaite: Thank you for your presentation. The first question I had, actually, was about where you came up with the $10 a day and how much you expect this to cost the government in paying for that.

S. Gregson: Our plan is not just numbers picked out of thin air. It's actually based on the work done at UBC through the human early learning partnership — Dr. Clyde Hertzman, Dr. Paul Kershaw and Lynell Anderson — who have costed out a plan for British Columbia and done some work on a Canadian plan. Fully implemented, when as many children have access as their families want to access child care, we're looking at $1.5 billion. The research shows that within year 1, half of that is recouped through the taxes that we've referred to, and that's fully implemented. Obviously, there would be a staged-in implemented approach.

[1435]

M. Oloman: There are references on our website to that documentation from HELP.

M. Elmore: Thank you for the presentation. I'm wondering if you can talk about…. I know in the plan you're recommending a governance structure administered through the school boards. Can you talk a little bit about, currently, the collaboration with municipalities? There is a patchwork of services offered, and a number
[ Page 1229 ]
of municipalities have stepped forward with different initiatives. Just in terms of, I guess, a best practices model and in terms of how you envision that contributing towards this plan.

S. Gregson: Perhaps we can tag-team each other on this answer. As a Vancouver school board trustee, I can tell you that I'm well aware of the ways in which our education system doesn't do everything for everybody. However, it is still going to be the best move forward to move child care out of MCFD and into the Ministry of Education because while municipalities…. Vancouver is a prime example. Vancouver is doing a lot for child care. Until there is a comprehensive provincial plan with dollars attached, the municipalities will never be able to solve the child care crisis themselves.

The best move forward for child care, for early care and learning — and you'll note the "care" comes first in that phrase — is to build on the experience from other jurisdictions around the world where the early years are more successfully invested in, with better outcomes, when they are moved into a ministry or department of education.

M. Oloman: Yeah, I think that's very well supported by the international literature as well.

R. Howard (Chair): Excellent. Thank you very much for taking the time and coming to see us today.

S. Gregson: It's always our pleasure, on an annual basis.

M. Oloman: And yours, too, I'm sure.

R. Howard (Chair): Yes.

Next up we have the Canadian Bar Association, British Columbia branch — Sharon Matthews.

Welcome, Sharon. You probably know you have 15 minutes. You can go ten and leave five for questions, if you like — I'll give you a little reminder at ten — or you can go all the way through. Your choice.

S. Matthews: Thank you very much, Mr. Chair, for the opportunity to be here today. My name is Sharon Matthews, and I am the president of the Canadian Bar Association, British Columbia branch. I am joined by Caroline Nevin, the executive director of our branch. As president I am pleased to speak to you today on behalf of approximately 6,700 practising lawyers, judges and law students from across B.C. This is our ninth submission to the Standing Committee on Finance, and we value the invitation to participate in this process.

Like many stakeholders in the justice system, British Columbia lawyers represented by the CBA are concerned about both perceived and real barriers to British Columbians accessing the justice system and its component parts. Access to justice is a fundamental part of our legal system and the foundation upon which our society is based. British Columbians must be able to enforce their rights and seek legal remedies where their rights have been ignored or impeded. Otherwise, our laws become hollow.

Those rights of individuals and their ability to seek redress where those rights have been impacted upon are as fundamental to a properly functioning society as the rights of British Columbians to health care or to education. In fact, it is the rule of law, the administration of justice and the ability to access justice that are the keys to ensuring that all other rights of our citizens are protected.

British Columbia's lawyers and judges see firsthand the problems associated with limited or no access to our justice system. Lack of lawyers and increasing numbers of self-represented litigants clog courts, which results from both, and the subsequent impacts on health and social service systems are clear. Having said that, lawyers understand the privileged place they hold in society as officers of the courts and defenders of the rule of law, and we are doing what we can to improve issues affecting access to justice.

B.C. lawyers donate tens of thousands of hours of pro bono and low-cost or legal aid services every year. As a very recent example, over two days this past week more than 100 lawyers in Vancouver and Kelowna provided free legal advice in outdoor clinics. A similar event will be held in Victoria tomorrow.

[1440]

The problem we face as a society is that lawyers alone cannot possibly fill in all the cracks. This is a key area where we believe the government needs to act. In particular, adequate and stable funding of legal aid is essential, especially in a tough economic climate when more people face financial barriers and are forced to deal with their legal problems without representation.

Crown and defence lawyers and judges know from experience that unrepresented litigants result in added costs to the justice system in several ways, most notably by bringing non-viable issues to court that a lawyer would screen out beforehand, bringing cases to court that would otherwise be settled if both sides had representation and by extending the time required to deal with cases in court due to lack of knowledge of legal processes.

Research from other jurisdictions, notably U.S. and Australia, showed that for every dollar invested in legal aid, at minimum $1.70 — and in some cases many times more — is saved in other areas of spending such as health care and social welfare. When government is faced with a need to contain spending, it makes sense to invest in programs that save money.

Cost-benefit analysis demonstrates that cuts to legal aid have created greater costs in the justice system and
[ Page 1230 ]
have slowed down the administration of justice. We only have to look at the news headlines to see the result.

However, with increased funding for legal aid, the 26,620 legal aid referrals provided in 2009-2010 would increase, and there would be fewer self-represented litigants. Civil and criminal case filings would decrease due to screening of legal issues. Family applications would decrease due to higher likelihood of mediation and resolution of issues outside the courtroom. Hours of trials and hearings would decrease. The government's expenditures on court costs would decrease, and based on the current research, other costs in health care and social welfare would also decrease.

Without an adequately funded legal aid program, the justice system will continue to face increased costs and stresses from unnecessary case filings, prolonged delays in trials and hearings, and decreased public confidence as important cases get thrown out due to delay.

In March 2011, after extensive consultations with stakeholders and citizens in communities across the province, Leonard T. Doust, QC, commissioner of the Public Commission on Legal Aid in British Columbia, released his report and recommendations. The commissioner identified legal aid as the fourth pillar of a just society, along with education, health care and social assistance.

The CBA supports the commissioner's findings and recommends that in recognition that adequate and long-term funding of legal aid is essential and that an investment in legal aid saves money in the justice, health and social welfare systems, the government of British Columbia increase its allocation for legal aid funding in the 2012-2013 budget.

We strongly believe that additional resources allocated toward legal aid will create significant savings for government, while at the same time improving the justice system. The findings of the Doust report clearly show that British Columbians do not feel the current justice system is meeting their needs.

The current story of the justice system in British Columbia is that unrepresented litigants consume a disproportionate amount of resources, and the current state of underfunding of legal aid is causing a public crisis in the confidence in our justice system. A more compelling and indeed progressive story for the government to share would be that they are committed to stable and long-term funding of our justice system as an essential service and that by doing so, substantial financial savings are generated that can be allocated to further improve government services.

The second issue I would like to raise today is impact of large law-student-loan debt and the fact that it is creating the unintended consequence of widening an already rural-urban gap in access to legal services in B.C. This issue is particularly concerning to the CBA, because it limits access to justice for rural British Columbians.

[1445]

The significant decline of legal services in rural areas of the province must be addressed. There are approximately 10,200 lawyers licensed to practise law in BC. Of these, 80 percent practise in what we call the south coast — Vancouver, New Westminster and Victoria. Of the 263 students currently articling — that's having finished their law degree and being prepared to practise law — only about 40, or 15 percent, are located outside of these areas.

We know that the average age of lawyers in rural areas of the province is over 50 and growing, but we also know that in some communities the numbers are significantly higher and growing. The balance of our submission sets out our proposition that this can be addressed through loan forgiveness of student loans, very similar to programs already in place in British Columbia for health care professionals, including doctors and some educators.

I'm not going to read it into the record. It is in our written submission, but noting the time, I would instead pause there and ask if there are any questions on our submissions.

R. Howard (Chair): There are. Thank you for that.

D. Donaldson (Deputy Chair): Thank you for the presentation. I attended, I believe, a public forum that you sponsored over at the CBC building here when Commissioner Doust was able to present some of his findings. It was very informative.

My question is…. In rural areas, I know many examples of the lack of access causing self-representation and the issues that causes. Do you have any numbers that you could forward to the committee on any workups of how much dollar cost that creates? You outlined it very well in a narrative here, but do you have any ability to put some potential costs, dollar-wise, in there?

S. Matthews: We do. We are in fact working on such a document now and would be happy to forward it to you. I will caution you that there's a lack of concrete data in British Columbia the way there is in some other jurisdictions that have led to these reports that show the cost-benefit analysis.

We know, for example, that eight out of ten criminal cases result in a plea bargain. That means they are resolved without taking trial time. We know generally how much it costs for a day of trial time in British Columbia. When a person does not have legal aid and is unrepresented, those plea bargains are virtually impossible. The Crown cannot ethically encourage a person to bargain away their legal rights without that person being represented.

That means of ten cases with unrepresented accused, none of them settle. In the fully funded legal aid world, eight out of ten of them would result in a plea. In the
[ Page 1231 ]
current world, ten out of ten of them take up trial time. We can provide some economic numbers that show the impact of that.

B. Bennett: A couple of quick things, I hope. I just wanted to confirm what I think is a recommendation. I went through the proposal really quickly and tried to listen at the same time. I think you were referring us to a program that we have for nursing students who decide to go and practise their nursing in rural communities. I think they get some or all of their loans forgiven.

What you would propose is that an articling student that is prepared to go a town of less than a certain size, whatever that might be, and to practise there for a minimum of two years, three years or four years — whatever it is — would have their student loans forgiven. Is that the proposal?

S. Matthews: Yes. Essentially, we're asking that the same program that's currently in existence be extended to lawyers. As I understand it, it's a three-year program, and for each of the first three years spent in the defined rural community, a third of the loan is forgiven.

[1450]

B. Bennett: Thank you for that. Just following up on MLA Donaldson's question. I was trying to think of my own question while I was listening to you. Did you say that there isn't much documented research to support Len Doust's statement that an investment in legal aid saves money in the justice, health and social welfare systems? Generally or just in B.C.? Does that research exist elsewhere?

S. Matthews: It does. A list of references to that research is on the back of the written information. It has been well studied in most western jurisdictions, but it has not been well studied in Canada, in part because the data, as I understand it, isn't collected in a way that easily permits that study to be done. It just cannot be suggested that what's been proven in other western societies wouldn't hold true in British Columbia.

So our submission is: let's just get to it. Let's start making the investment and saving the money. At the same time there are many organizations across British Columbia and Canada that are looking at how to go about doing this research.

J. Thornthwaite: Thank you for your presentation. Just a quick question. Maybe it's my naivety here about the system, but is there some way of encouraging all lawyers to do their part for pro bono, or is it just a selection of saints that do this on a regular basis? Or is it some sort of regulation that your association has to make sure that it's more equalized?

S. Matthews: It's probably not well known that almost all lawyers are saints.

J. Thornthwaite: You're right. That's not well known.

S. Matthews: You're right about that. The CBA has a policy to encourage all lawyers to engage in pro bono. The data is…. It is literally thousands of hours that lawyers put in. There are very well organized entities in British Columbia that dole out pro bono cases to lawyers who…. They're set up. So for lawyers who have expertise in family law, expertise in administrative justice, they are on listservs. They get e-mails weekly. I participate in one of those. The last time I put my hand up and said, "I'd be happy to do that case," they said: "Too late. It's already taken."

So there is a lot of pro bono being done, but it cannot fill the gap, especially in rural British Columbia where the numbers of lawyers on the ground are thin, the amount of money they make is a lot less than in the cities and the numbers of otherwise unrepresented persons are huge compared to the number of lawyers in those areas of the province.

R. Howard (Chair): Thank you, Sharon. Thank you, Caroline. Very nice of you to come out and present to us today.

S. Matthews: Thank you for the opportunity.

R. Howard (Chair): You're welcome.

Next up we have the Vancouver Aboriginal Friendship Centre — Susan Tatoosh.

Welcome, Susan. I'm sure you've heard the drill — 15 minutes. I'll give you a little reminder at about ten.

S. Tatoosh: I think I'll only take five.

R. Howard (Chair): We might catch up, then, and get back on schedule.

S. Tatoosh: First of all, I'd just like to say that MLA Shane Simpson presented the information to us at our organization that this opportunity was available. That's why I'm here today, because the message did get out to us.

Thank you for the opportunity to provide input into the considerations given by the Standing Committee on Finance to the B.C. government budget 2012. My name is Susan Tatoosh, and I am presenting on behalf of the Vancouver Aboriginal Friendship Centre as the executive director.

The Vancouver Aboriginal Friendship Centre is a member of the B.C. Association of Friendship Centres and the Metro Vancouver Aboriginal Executive Council. As such, we are very aware of the urban aboriginal issues
[ Page 1232 ]
across the province and in the Metro Vancouver regional district.

We responded to your survey online, and we sent in a presentation as well, but we felt that we should have a voice here at the hearings.

I've picked two questions of yours to respond to. The most important one to us is: what are the priorities for you in the next little while? We are urging the B.C. government to make it their priority to protect priority programs such as those offered in friendship centres through investing in an off-reserve aboriginal strategy for more than 70 percent of B.C.'s aboriginal population.

[1455]

Aboriginal people living off reserve are in need of an investment for a comprehensive strategy to address poor social and economic conditions. Health care and educational programming are very important to us.

In Vancouver there is a need to continue and enhance funding for health programs that address the issues that our population has to deal with, such as mental health, physical health and disabilities. Research tells us that the social determinants of health suggest that if we invest in our communities and our citizens in a targeted way, from a prevention focus, we can offset the spiralling health costs of pharmaceuticals, hospitals and expensive specialist services.

Investing in early childhood development or in programs that promote social inclusion, provide food security, support people with disabilities, provide community safety…. All of these are the kinds of supports that community social services provide in our community, specifically friendship centres.

We believe that increased funding for community social services is a smart investment. In Vancouver alone there are over 50 urban aboriginal social service agencies for a population of 40,000. Some of these service streams include early childhood development, elder services, educational facilities, alternate schools, adult community corrections for women's agencies, homeless shelters, youth services, and from services to persons with disabilities to child and family service agencies. This does not include all the service agencies provided by urban aboriginal organizations.

The services and programs provided through these many aboriginal service agencies, such as the friendship centre, have been linked to improved social, economic and educational outcomes for urban aboriginal people, such as increased literacy rates, reduced child apprehensions, increased labour market participation and decreased family violence. This speaks to the need for investing in a comprehensive off-reserve urban aboriginal strategy that includes long-term annualized investment.

For addressing the challenges ahead, as the province of B.C. prepares to remove barriers and provide support in key sectors to advance the B.C. jobs agenda, the government of B.C. needs to consider B.C.'s fastest-growing population group, the aboriginal people, as a significant source of future labour. An investment in continued support in the area of essential skills training is imperative.

Essential skills are the basic building blocks we use to learn other, more complicated skills. Essential skills are needed in virtually all daily activities and occupations. It is important to consider and integrate essential skills not only into self-improvement courses but into education curricula, skills-upgrading projects and on-the-job training.

This style of learning has proven very successful in our community in addressing the failure of the educational system for our population, especially for our older workers, but it has also proven very beneficial to our youth who had dropped out of school.

This is the most important part of our presentations that we made on line. Once again, I would like to thank you for the opportunity to speak to you, and I'll be happy to respond to any questions.

R. Howard (Chair): Thank you, Susan.

A question from MLA Donaldson.

D. Donaldson (Deputy Chair): Thanks very much for the presentation. I'm aware of the fine work friendship centres do not only in major urban centres but in areas like Smithers, in my constituency, as well.

[1500]

Can you speak a little bit and expand a little bit more on the efficiency and the ability of friendship centres to deliver the training needs, especially for those older people in our communities, and the success that you have as a model for a government interested in jobs and efficiency — the ability to use minimal dollars to get great results?

S. Tatoosh: I think the first thing that I would like to respond to is the time period that urban aboriginal agencies have been in place.

I look at the Vancouver Aboriginal Friendship Centre. In 2014 we'll be celebrating our 60th anniversary. We have the experience, and we have the expertise at hand, but we do not do it alone. We collaborate and cooperate with our other urban aboriginal organizations, specifically those that are specialized in employment training and education.

For instance, in Vancouver we have the ACCESS program, which for approximately 22 years has been providing employment, training and education programs. They are situated in the Vancouver Aboriginal Friendship Centre.

We also have many other training programs that we collaborate with in the area of corrections, in the area of daycare. We work very closely with the native educa-
[ Page 1233 ]
tion program in promoting the on-the-job-training type of placements for students. So our daycare has been in place for 30 years, and we have seen three generations of families go through our daycare.

J. Thornthwaite: Thank you very much for your presentation. Are you saying that 70 percent of B.C.'s aboriginal population lives off reserve?

S. Tatoosh: Yes.

J. Thornthwaite: Have you had any dealings, then, with the federal government with regards to an adjustment in their funding to provide for aboriginal populations that actually don't live on reserves?

S. Tatoosh: We have.

J. Thornthwaite: How's that going?

S. Tatoosh: We've been lobbying very actively at the national level, and we have been doing it for three years now. We have not had an increase in federal funding since 1983. That was first time we had an increase, and we haven't had one since.

B. Routley: I appreciate the work that you do. In the Cowichan Valley we have a large First Nations group. The Coast Salish and the Cowichan Tribes are represented there.

I was recently at the friendship centre and learned that there was both success and a problem. The success is that there are First Nations students. There was a young woman that just recently achieved her degree as a result of the child care program, but now that there have been cutbacks….

Apparently, the federal money that had been coming through and had been transferred to the province of British Columbia in the Cowichan Valley region didn't seem to be getting through to help the students. So I was wondering if you're having any problems with federal transfer payments and money that's supposed to be designed to help….

The friendship centres deal with daycare and that kind of thing. Are you still having enough funding to deal with your child care needs?

S. Tatoosh: No, there isn't enough funding to support the needs of the urban aboriginal population, especially in the area of child care.

Our constituents access daycare. They pay the minimum amount, and they can't afford the additional cost. But there is a subsidy available if you claim for a special needs child. So they apply for that, declaring their child a special needs child because of the language barrier or whatever.

That systemic title stays with the child through the school system. Even though it was initially placed on them as a result of financial burden, it stays with them throughout the school system.

[1505]

R. Howard (Chair): Susan, thank you so much for taking the time to come out and present to us today.

S. Tatoosh: My pleasure.

R. Howard (Chair): Next up we have the Pembina Institute — Matt Horne.

Welcome, Matt. You've got 15 minutes. You can use it all, or I'll remind you at about ten minutes if you want to allow time for questions. Or you can push through it if you want.

M. Horne: That's great. Okay. Thank you very much for the opportunity.

My name's Matt Horne. I'm the director of the B.C. energy solutions program with the Pembina Institute. For those of you that don't know, it's one environmental organization focused on energy and climate issues in Canada. We have about 60 staff across the country and 15 here in British Columbia.

What I wanted to talk about today was B.C.'s carbon tax and opportunities for the 2012 budget. Specifically, I'll be presenting on some public polling research we did earlier in the year and its relevance for decisions B.C. can make going forward on the carbon tax. Then I'll close with Pembina's recommendations on some of those opportunities.

The second slide is just some basic information on Pembina, if you want to take a look at that — just knowing who we are and our mission and vision. I won't go into that in detail.

Slide 3. Apologies. These aren't numbered, but the top one on page 2. The public polling we did. It was an on-line poll using the same panels that Angus Reid uses in its federal and provision electoral polling. It had a sample of 830 British Columbians, conducted back in April. We've got a margin of error of about 3.4 percent 19 times out of 20, and it's statistically representative of B.C.'s regions, ages and gender mixes.

A few contextual slides just in terms of where British Columbians are at on climate change and global warming, at least based on the public polling. I won't go into these in detail, but you can look at them and ask me questions on some of the specifics. We just asked: are they concerned about global warming? We've got 69 percent saying they're worried or very worried about the issue.

Next slide. Seventy percent say they support leading in efforts to deal with climate change. That's with the caveat of even if our neighbours and competitors
[ Page 1234 ]
are lagging behind, so it's an issue British Columbians clearly feel their government needs to be leading on.

Finally and I guess really importantly, 80 percent believe that dealing with climate change will have a positive or neutral impact on the economy, with only 20 percent feeling that policies to deal with climate change and global warming are going to have a negative impact on the economy. So there's a high degree of confidence in the potential for the clean energy economy in British Columbia.

Specifically looking at the carbon tax, we asked about three possible changes in the way that the carbon tax is designed. The first was the coverage of the carbon tax. Right now it applies to the combustion of all fossil fuels in the province. There are some non-combustion sources of emissions in the province — for example, natural gas ventage from pipelines or methane leaking from landfills.

About 25 percent of the province's emissions are not covered by the carbon tax, so we asked about broadening it to include those. We found 69 percent support having the carbon tax applied as broadly as possible. I think it's probably not an issue most British Columbians understand in detail, but there is a gut sense of fairness that they'd like to see policies applied as fairly as possible to everyone.

Looking at the next slide, sort of looking at the potential for future increases. This is certainly one that's contentious. Asked directly about a possible increase, without giving any future information, 29 percent said they would support an increase.

There are two ways to look at that. In one there is a majority that is concerned about future increases after 2012. It's also somewhat surprising that almost 30 percent of British Columbians would support an increase in a tax without any further information.

A second question we asked, which is the next slide, provides some additional information on this. Recognizing that government does need to collect revenue…. Asked to rank their preferences between different taxation options, carbon taxes were rated as the second most popular taxation option to raise the revenue that government does need.

I would personally take those in combination. If the carbon tax is raised going forward, we're not going to have British Columbians out in the street celebrating, but if it's well designed and well communicated, there's the potential to build support for that policy direction.

Finally, we asked about the use of revenue. To date, the carbon tax has been designed to be revenue-neutral, so it has gone into tax cuts and credits for low-income families in British Columbia.

[1510]

We asked about using the revenue for other possibilities — namely, investing in general revenue, investing in projects that reduce emissions — than the three options it's currently being used for: reducing personal income taxes, reducing corporate taxes and protecting low-income families.

We found the highest support — actually, somewhat surprisingly — for investment in general revenue. I think that speaks to a desire for government to be providing these services and a sense that many of them are underfunded.

The second most popular was investing in projects that reduce emissions, and that's certainly backed up by other public polling that's been done across Canada and in other countries as well.

There is a desire to see policies which are essentially sort of the stick to be linked with the carrot. So if we're charging people for their greenhouse gas pollution, we should also be doing as much as possible to provide solutions so that it's easier to make those different lifestyle and different business choices.

I've closed there with Pembina's recommendations on this, and these are, I guess, largely supported by the public polling, but maybe not entirely so. Our recommendation would be to broaden the carbon tax so that it applies to all measurable sources of greenhouse gas pollution in the province.

The implications, if we're to do that to the 2012 budget, would be about $175 million in additional revenue for 2012-2013. I would argue that there would be increased public support, given the increased fairness of the policy.

Second would be the continuing increase in the carbon tax in 2013 and beyond. Assuming an additional $5-a-tonne increase, which has been the rate at which it's been increasing over the first four years, that would be an additional $275 million in 2013-2014. As I said, I think there's an opportunity to maintain and build support, but it would really depend on how that policy is designed and how it's communicated.

Finally, we'd recommend diversifying the use of carbon tax revenue, with the priority on two areas: one, projects that reduce pollution and, two, helping low-income families be part of the solution. So I think, as a result of that, you're going to have increased investments in projects that do reduce pollution and also create jobs. Finally, I'd argue, we'd see increased public support from that direction.

I'll close there.

R. Howard (Chair): Excellent. Thanks, Matt. We have some questions.

B. Ralston: Thanks, Matt. You talked about broadening the carbon tax base, and you've given some examples of, you've said, natural gas leaking from pipelines, methane gas.

One of the discussions I've had with people is: how would you accurately measure those sources in order
[ Page 1235 ]
to…? You've mentioned a percentage of 25 percent, so I'm just wondering what your understanding is of the way that those sources would be measured.

M. Horne: Yeah, it's a good question. The key is that if it's going to work, they have to be accurately measured. Right now the carbon tax covers about 75 percent of the province's emissions. Based on our research, that could be increased to 85 percent, so there's about 10 percent of the province's emissions that aren't covered but are accurately measured.

The biggest chunk there would be within the natural gas sector, coming when carbon dioxide is vented from natural gas–processing plants and when natural gas is vented from pipelines.

The example of leaking from pipelines isn't actually a good example. Those aren't well measured, so that's not one the carbon tax could be applied to at the present time.

Then there are some small chunks on a provincial scale within cement and lime production.

P. Pimm: Thank you. So your polling, you say, is just done randomly?

M. Horne: Yeah.

P. Pimm: The 250 area or 604 area? Which areas?

M. Horne: The full province and on a weighted…. It's representative of the province. That is, the majority of people polled would be from the Lower Mainland, but it's drawing in representatives from the north and from the southern Interior.

P. Pimm: So the majority from the Lower Mainland.

M. Horne: Yep.

P. Pimm: Would you know what percentage that would be?

M. Horne: I could look that up and provide it, but it'd be representative of the province's population distribution.

P. Pimm: Okay, so evenly, in accordance with the province's population.

M. Horne: Yep.

P. Pimm: Okay. Was there any polling done of any of the industries in the province?

M. Horne: This is part of a larger project, and we're actually in the process of doing interviews with those industry NGOs, academics and communities around sort of a more detailed study of these questions, so it probably wouldn't be appropriate to share preliminary results. We're still in the middle of those interviews.

P. Pimm: So no…?

R. Howard (Chair): MLA Pimm, I'm sorry. I've got to hold you to one question. Sorry about that. We've got to move on.

D. Donaldson (Deputy Chair): Thanks for the presentation, Matt, and congratulations on the report released this week on fracking. I think it's a well-balanced report and addresses a lot of the issues around water, if the recommendations are taken into consideration by government.

My question is on the stripping of carbon dioxide from natural gas. We're going to be visiting a natural gas facility, I hope, when we travel as a committee to Fort Nelson next week.

[1515]

Can you give me an idea of the extent of carbon that that would entail in B.C. — the stripping of carbon dioxide from natural gas production as we see it now?

M. Horne: Two answers to that. I can send you a specific number, but currently it's in the range of about 5 percent of the province's total emissions.

I think a concern, which actually is in the reports we released yesterday, is that because of increased development in the Horn River, the natural gas coming from that region has a much higher natural percentage of carbon dioxide that has to be stripped. So as we increase development, if we're not on top of that challenge, that percentage has the potential to rise.

J. Thornthwaite: Thank you very much for your presentation. Your recommendation is to continue to increase the carbon tax in 2013. But if the majority of the polling that you've done is from the Lower Mainland and only 29 percent of those actually support that, I'm just wondering: are you planning on doing any more convincing?

M. Horne: It's certainly a big chunk of my job and something that the organization is working on. As I said, I think if it is a direction that's taken and it's well designed and well communicated, there is the potential for support. But as with any tax increase, it's not an easy path direction forward.

At the same time, we're dealing with a significant challenge and an almost overwhelming challenge in trying to deal with climate change. It requires strong response from government.
[ Page 1236 ]

D. Hayer: Thank you very much for your information. My question to you is that since the economy around the world in the last couple years has really changed…. If you take a look at Europe and the United States, how they look at the carbon tax is much different today than it was 2½ years ago, before 2008, basically — right?

If our business does not stay competitive because of extra carbon tax, do you think we should still go ahead and increase the carbon tax, even though our products and our services will be out of line compared to the rest of the world — when you're trying to create jobs and keep the jobs that are here, here, rather than losing to other parts?

M. Horne: It's a fair point. I think the world has not evolved as many of us might have hoped it would have three or four years ago, from a climate change policy perspective.

There certainly are still some positive pieces out there. Australia is debating its own carbon tax as we speak. Quebec is moving forward with its cap-and-trade regulations, as is California. So there are pieces continuing to move forward. It's not necessarily as broad as many of us would have hoped for.

In terms of the competitiveness piece, I think it's really important to be evidence-based on that. We hear lots of discussion about competitiveness concerns. What you're concerned about is a combination of industries that are both trade-exposed and emissions-intensive. There have definitely been a number of studies on the Canadian economy that actually limit the number of sectors down quite substantially.

When you do have those situations, I think it's entirely appropriate for government to be concerned about that and direct support appropriately. One approach would be to not move forward with the carbon tax. The other approach would be to move forward with the carbon tax or cap-and-trade and use a portion of those revenues to make sure those companies have the resources to invest and modernize and be competitive.

So I think there are approaches to stay on top of and deal with competitiveness concerns. I wouldn't say that we should ignore them, but I think it should be evidence-based, and we should think through the best way of dealing with them when they are there.

R. Howard (Chair): Excellent. If we can squeeze in one more of one minute, Bill, I'd think they'd thank you.

B. Routley: Okay, a quick question on gas flaring. I had the opportunity to see what was going on in northern British Columbia with gas flaring. I was told that down in Texas it's actually illegal, the gas flaring. They have laws that require them to utilize that gas.

Do you have any comment about that? Do you know what percentage of carbon in B.C. is actually created as a result of gas flaring?

M. Horne: It's in the range of sort of 1 percent, right around there, in terms of flaring emissions in terms of the province's total emissions.

I know B.C. definitely has some regulations to prevent flaring in certain situations, but there is still flaring happening. The carbon tax does currently apply to flaring emissions, but I would say there are opportunities to continue to reduce those emissions, for sure.

R. Howard (Chair): Excellent. Well, thanks, Matt, for coming out and making your presentation. We appreciate that.

M. Horne: Thank you, and good luck with the rest of your tour.

R. Howard (Chair): Thank you.

Next up we have Moms on the Move — Dawn Steele.

Hello, Dawn. I think you've been sitting there for a while, so you know the drill here. Fifteen minutes. I'll give you a little hint around ten. You can either continue or take questions.

[1520]

D. Steele: Thanks for having me.

It's interesting listening to the other presentations. It really emphasizes the tough choices that you folks have before you about different choices for revenues, expenditure. It all comes down to priorities, and that comes down to our values. In that respect, we are really positive about the Premier's emphasis on listening to families and putting families first, and we really appreciate that.

Just very briefly, we are a provincial all-volunteer network of parents who support families of adults, youth and children with special needs. I'm one of the coordinators. Cyndi Gerlach, another mom from North Van, is my partner.

Our key message today is that government claims unprecedented spending to support children, youth with special needs, adults with developmental disabilities and families, but since we started MOMS a decade ago, families around B.C. have been reporting to us an erosion of supports, growing wait-lists, reduced standards and a lack of accountability.

Our message is that this is placing a crushing burden on families, and it's taking a significant human and economic toll — parents, usually mothers, forced to abandon careers or full-time work; young families with crushing debt; single parents forced into poverty; aging parents in crisis, reduced economic contribution from parents and young adults who were failed by the school system; and more families, children and adults in crisis and relying on costly emergency services.

These are some of the themes I've listened to the previous speakers emphasize as well. An additional one for our families is that fighting for services and administer-
[ Page 1237 ]
ing programs like direct funding has become a major stress in the lives of families who already face enormous stresses. It may sound big, but these problems can be resolved, and we think the solutions lie with funding and accountability.

The next three pages have a lot of numbers. I realize this is a long day. You've been sitting for a long time, and you probably have seen more numbers than you can absorb in a day, so I'm not going to repeat them all. I'm going to just touch on the highlights.

Looking at budget first. Just to give you an overview, lifetime supports are funded through CLBC, which is under the Ministry of Social Development; the Education Ministry; the children's ministry; and Health. The budget story across all these areas is that funding has failed to keep pace with costs and with the demands of a growing population.

Our children have been asked to tighten their belts for a decade, in good times and bad. If the Premier is serious about listening and putting families first, this is going to require a major shift in spending priorities. In special education, for example, we have a growing number of children with special needs in our school system, and yet the direct special education grants have been cut significantly in the past decade.

During this same period teachers' salaries have increased by 27 percent. Our kids have paid for those increases, because they weren't funded. The result is significantly less funding to accommodate students with special needs, a massive erosion of supports for the most vulnerable students in our schools, and serious lifetime cost implications.

Our first recommendation, therefore, is to invest an additional $110 million in special education grants. This would just restore per-student funding to the 2001 levels in real dollars. We propose that this be distributed based on enrolment of all designated students and that future grants be indexed to teacher compensation. We're also proposing a further $5 million annually for capacity-building and special education, and establishment of a stakeholder council to work with the minister to identify priorities.

In Community Living we have a similar story. Funding has alternately been cut and raised, with a net increase, but which has been wiped out by inflation. When you add the growing number of adults who require supports, the result has been a serious deficit. Budgets have been frozen for four years, while the number of adults who require services has been increasing by 5 percent each year.

I want to emphasize that based on incidence rates, we have an estimated 37,000 B.C. adults with developmental disabilities serious enough to make them eligible for CLBC services. CLBC serves less — about a quarter of those.

[1525]

Parents and families provide the vast majority of support to the vast majority of adults with developmental disabilities in B.C. We can't do this alone. It's a shared responsibility, and families need help.

Our organization belongs to the B.C. Community Living Action Group, which has recommended an immediate $70 million budget increase for this year to cover the backlog from the last two years, plus a further $35 million for each of the next two years. This does not address added costs, cost increases; it simply keeps pace with the population growth and the demand for services.

Also, I'll comment briefly on the minister's announcement yesterday — $6 million. While it's a positive gesture, with all due respect, this is like throwing — what came to my head — a cup of tea on a raging kitchen fire. Based on CLBC's average cost for adults, this would serve 120 clients for a year. That's one-tenth of the unfunded new adults who have come into requiring services for the last two years.

Feedback from families in our network suggests that this funding is going to the families who have brought their cases public via the media. While we're happy for those families, we think this would be a shockingly unfair approach. It promotes a squeaky-wheel system, where those people who make noise get preferential access. We don't think this is the right way. It's a recipe for disaster.

The third major ministry is the Ministry of Children and Families, and quite frankly, we've tried and tried and tried to do a budget analysis. It's impossible. For a decade MCFD has been promising to provide data on caseloads, wait-lists, who's getting what, and for a decade they haven't been able to produce that data. We think this is a shocking failure.

If we want to have accountability, if we want to make sure our money is being spent effectively, we need to be able to see who is being served, who is not being served, what is being provided, if it's effective, what the outcomes are, what the performance measures are. We don't have anything like that.

I would like to add that in this information vacuum, we've been getting increasingly wild claims through government media announcements about the spending. One, for example, said that spending was now in excess of $600 million. Another one said spending for school-age kids alone is $858 million. An independent study in December 2010 found that all three ministries together spend something like $525 million.

Another one that I read recently said autism spending is up tenfold from 2001. It's now $42 million, and it was $4 million in 2001. I have documents, including newspaper reports, that say it was actually $20 million in 2001. It has doubled, but the ministry has gone from serving a couple of hundred children to 7,000 children, which means that the average funding per child
[ Page 1238 ]
has reduced significantly. It's no longer enough to provide the kind of intensive early intervention for autism that's going to prove effective, that's going to reduce the burden of these kids when they hit the school system, that's going to reduce the burden on CLBC when they reach adulthood.

No framework for evaluating and prioritizing proposed initiatives. So we feel the funding may not always be well spent. BCACDI did the report and found that resources for children and youth with special needs are scattered across more than 90 programs in three or four ministries.

In 2008 B.C. approved a cross-ministry integration framework to improve coordination between all those services. After three years, as far as we can see on the ground, there's been absolutely no change in that regard. And yet each year we're seeing new ad hoc funding announcements, and each new announcement complicates an already fragmented and already complex system.

An example is the lack of any rationale for the province's proposed $20 million contribution to help build a lavish private project to house existing autism services, when families have repeatedly stressed that program gaps are their top priority.

In the Education Ministry we also have deteriorating accountability. In 2002 the Education Ministry stopped tracking graduation rates, which was the only accountability outcome previously tracked for 17,000 students, who together account for 92 percent of the special education budget. That's $290 million, and the one measure that was tracking the outcomes has been dropped almost a decade ago with nothing to replace it.

I missed my other recommendations. I guess you'll go back and read them, hopefully.

[1530]

Recommendation 5. We are, therefore, urging the appointment of an external expert to work with the ministers responsible, with the children's representative and with stakeholders to undertake a broad needs assessment and to help the province develop a comprehensive vision, objectives and prioritized action plan that provide clear direction, coordination, prioritization, streamlining and accountability for a governmentwide, lifelong system of services and supports for children, youth and adults with special needs.

If you had to ask me for one name that would pop into my mind, it would be Tom Christensen, who was the Minister of Children and Families, Education, and was responsible for Community Living. I think everybody would agree he did a stellar job in all of those ministries during his time. So if he could be persuaded to come and help look at some of these questions….

Anyway, thank you for listening. I hope that you'll take the time to go back and read some of those numbers that I spent all weekend digging up. There's an electronic and on-line version of this, and all the little blue ones are hyperlinked so you can check the source documents and the data.

We trust that you're going to support the Premier's commitment to put families first by reordering budget priorities to simply restore what was lost. Our recommendations are not asking for new money. We are not asking for increases. Our kids have tightened their belts. Adults have tightened their belts. Families have tightened their belts. We're simply asking that what was lost be restored.

We think these supports represent an ongoing moral societal obligation that exists independently of where we are on the economic cycle.

R. Howard (Chair): Thank you, Dawn.

M. Elmore: Thanks, Dawn, for the presentation. In terms of your recommendation 5, are there other jurisdiction areas that have implemented a plan to help more efficiently and effectively deliver services?

D. Steele: I'm sorry. I haven't researched that, but I just think it's a basic need. If I was running a business, I would like to know what my objectives are. If I don't have enough money to do them all, what are my priorities? I'd like to know that the money I'm spending is being well spent. If I'm funding 90 programs, I'd like to know that there is some way that they all work together or some reason for having 90 programs, as opposed to one comprehensive framework.

M. Elmore: Yeah, absolutely. I think it is a very good recommendation in terms of bringing it all together and effectively being able to monitor and account and also assess the programs.

R. Howard (Chair): Thank you. I think we can just sneak in one more question.

J. Thornthwaite: Thank you very much for your presentation. My question is on recommendation 1. Who are the stakeholders that you are referring to?

D. Steele: I think that would be groups that represent families of children with special needs, the people who actually work in the system, the teachers, the trustees, the administrators, obviously the minister and the minister's staff.

I would add that in Vancouver we've started — very preliminary — doing something, an initiative like that on a very small scale, looking at a focused problem. It's been really helpful bringing all the different stakeholder groups to the table and saying, you know: "You can't have competing people putting out competing solutions. Come together and agree together on how we can make this work." I think that's an effective way. It helps guide
[ Page 1239 ]
you, rather than you having to listen and choose between six different directions proposed by six different stakeholder groups.

R. Howard (Chair): Thank you, Dawn. Thank you for taking the time to come out today and make a presentation.

D. Steele: Thank you for having me.

R. Howard (Chair): Next up, we have Pamela Gardner. Welcome, Pamela.

You have 15 minutes in total. At about ten minutes I'll give you a reminder. You might want to stop for questions; you might not. But you've got 15 minutes.

P. Gardner: I don't think I'm going to take the whole ten minutes. This is the first time I've done anything like that, but I thought it was important to use this venue as a bit of a thank-you. I did give you a one-pager. I'm not going to specifically talk off that. But I do orthotics and prosthetics in beautiful Burnaby, and a lot of the clientele that I serve are people who are covered under disability 2.

[1535]

Many are people that are clients under the ministry for social economic development. On April 1 of 2010 the ministry, through their having to tighten up their budget, chose that one of the cuts would have to be to cut off some clients, or lessen the scope of clients, that were using custom foot orthotics, wound-care shoes, extra-depth orthopedic shoes that would accommodate their foot conditions. They did continue to cover foot orthotics for clients that were at possible risk of an amputation to their feet, and the ministry also chose to cover custom-made shoes if the clients needed that.

It was my opinion, and that of quite a few people in my profession, that a lot of people suffered from pain, and the visits to hospitals increased because of people that had plantar ulcers — ulcers on the bottom of the feet. They were diabetic. Their ability to heal was compromised, so there were more antibiotics being used in the hospital. It was documented, but I don't know from personal experience, that there might have been some amputations — foot amputations that people suffered because they were not able to heal, specifically.

Then I went to the ministry for social housing and economic development. Other professionals and some other MLAs also brought this topic up, and on August 2 Harry Bloy, the minister for social, economic housing and development, made an announcement that the ministry was listening to the people, that the ministry was listening to the different interest groups, and that he and his ministry, along with the consultation of podiatrists, decided to expand the program to cover custom-made foot orthotics, diabetic foot orthotics, wound-care shoes, extra-depth footwear that would benefit the clients of the ministry for social housing and economic development.

I feel that this was just a position where the ministry, the government, listened to the needs of the people and listened to what was happening. They looked at the policy, they acted on the policy, and I think they did the right thing.

I just wanted to use this venue to say thank you. As a group, thank you for listening, and thank you for helping the people and doing the best you can with the restraints that are given. I realize there are tough decisions to be made, but I feel that this was the right decision. Through the organizations that I deal with in the Downtown Eastside, in Vancouver community centres, the people are happy that their clients are able to have off-loading shoes, shoes that are easier to get now, to meet their clients' needs. That's all I have to say.

R. Howard (Chair): Well, thank you for coming out to say thank you. It's very nice. Do I have any questions?

D. Hayer: Do you also provide services to Surrey and other areas too, or is it…?

P. Gardner: Yeah, we do. All around the Lower Mainland there are people in need of these services.

D. Hayer: Good, thank you. I had one constituent asking that just at the new year.

P. Gardner: The word is still getting out. Social workers will call, and occupational therapists throughout the Lower Mainland will call, and they'll say: "We've heard there've been changes." Burnaby and New West are largely what I serve, and there are a lot of clients that are benefiting.

D. Donaldson (Deputy Chair): I believe you made a presentation last year on this topic. Is that right?

P. Gardner: No, this is my first time. I'm nervous, raw, speaking just from my notes.

[1540]

D. Donaldson (Deputy Chair): Well, you were very impressive in your presentation for being nervous and raw. I recall the issue being brought up, whether it was last year or a year before, by another person in your profession. So thanks for following up.

The announcement — does it address all the needs that were present before, and are there still some needs that aren't being fulfilled, to your knowledge?

P. Gardner: I think that to my knowledge, all the needs are being fulfilled. The thing I really like about
[ Page 1240 ]
this policy is that the ministry chose to put ceilings on so that you didn't have the potential of some providers to overcharge. In the past — the ministry prior to April 1, 2010 — there were no restrictions as to the costs of a wound-care shoe or of an extra-depth shoe. Extra-depth orthopedic shoes…. If you're wearing a drop-foot brace, if you're post-polio and you're wearing a big brace, you need extra width, extra depth. Now there are appropriate ceilings that are put on so that the providers can provide something decent.

I think it'd be nice to see the ministry, and also the Ministry of Health, looking at orthotics and prosthetics. I wrote in my notes that I don't have the quantitative figures, but the amount of hospitalizations is going to drop when you're proactive because, again, you're not going to have the same level of infections. You're not going to have the same levels…. People are going to be in something that they can easily wear to protect themselves, to unload the ulcer so that the ulcer can heal.

R. Howard (Chair): Excellent. Thank you, Pamela.

Next up we have Barbara Hobson.

Barbara, while you're setting up. I'm sure you've heard this a number of times — you've been sitting there patiently — 15 minutes. I'll give you a little reminder around ten. Welcome.

B. Hobson: Thank you for the opportunity to address your committee. As a way of introduction, I'm a resident of Coquitlam and have been since 1975. My career years were spent working in health care and education. I was a school trustee from 1996 to 2002 and chaired the board in school district 43 for three years. I worked at universities here in British Columbia as well as in other provinces and at schools involved in trades training.

My volunteer and community involvement have brought me into contact with more than 30 organizations, and I currently am president of the Rotary Club of Coquitlam; vice-president of Place des Arts, which is a small arts centre in Coquitlam; vice-president of the Maillardville Residents Association; and a member of two city council–initiated committees in Coquitlam.

As an active member in my community and someone who values the way of life we enjoy here in British Columbia, I have five points I would like to make to this committee.

I believe our most important priority in this province should be to return to a balanced budget. I understand that Minister Falcon has committed to this, and I am fully supportive.

Notwithstanding this, education cannot be neglected during difficult times. Children do not stop growing up while us grownups try to figure out how to manage the money. The lives of the youth in this province are in our hands, and we must not fail them. However, I believe that in many cases we are doing just that.

I would like to see us look for innovative ways to educate children and, rather than teaching subjects, figure out how to teach kids. The Ministry of Education needs to find innovative ways to deliver education, make sure our kids are safe, warm, free from discrimination and harassment, fed, and surrounded by adults who care about them and want to see them excel, and teach them to do just that.

[1545]

Here is a quote from the Ministry of Education website, special education page: "All students should have equitable access to learning, opportunities for achievement and the pursuit of excellence in all aspects of their educational programs…. The purpose of special education is to enable to equitable participation of students with special needs in the educational system in British Columbia."

While "equitable" for some children with special needs means integration into the regular classroom, for others integration is not the best way to help them. I believe we should encourage school districts to group some children for the purposes of instruction, with parental permission, and allow these children to excel in an environment that encourages them to be supported because of their unique learning needs.

There are a large number of private schools specifically designed for children with special needs, and these schools show us that there is a demand for this type of education. Why should access be restricted to those families who have the ability to pay? And conversely, how can every teacher in every classroom in the province be an expert on every exceptionality children have when special education isn't even a required subject for teacher training? This could have the added benefit of decreasing the number of students with special needs who need to be placed in other classrooms and help with class composition restrictions.

As far as health care in this province is concerned, I would like to see better use made of nurse practitioners and nurses in the system. Many patients who consult their family physician would be able to be seen by or screened by a nurse practitioner or nurse. In a family physician's office the number of patients who make appointments to deal with such things as cold or the flu are staggering. Prescription refills for ongoing prescriptions and medications that need to be administered with a needle could, for the most part, be dealt with by a nurse or a nurse practitioner.

I would also like to see more information about HealthLink B.C. This is an excellent service. It was advertised extensively when it began, but it needs to continue to be publicized. For example, perhaps a small card could be handed to patients by their health care professional during an office visit. This would show patients that their physician is supportive of the service, would encourage
[ Page 1241 ]
use of the 811 service and possibly cut down on the number of visits to emergency wards.

Finally, at a minimum please do not decrease the current government-controlled gambling revenue that is provided as grants to community groups and non-profits. I know it will be tempting to look at this area as you struggle with how best to provide funds for all the government's commitments. However, many, many excellent services and community groups rely on these funds, and it would be imprudent to decrease the amount allocated.

Thank you for this opportunity to address the committee. I know you have significant challenges to deal with in this year's budget. I believe you are all here because you want to do the very best for everyone in this province. It's an incredibly difficult task, and I commend you for taking it on.

R. Howard (Chair): Excellent. Thank you.

J. Thornthwaite: Thank you very much for your presentation. Your No. 2 point, about the special needs children and grouping them…. I do know that our ministry is very, very much in support of personalized learning, which would fit into this. But I'm wondering how your recommendation would fit in with, for instance, what the teachers are saying right now, the BCTF, with regards to their class size and composition issue.

B. Hobson: Well, the class composition issue is a problem because it directs that there are three special needs children in every classroom. That means that you can't group children who could potentially benefit from being grouped.

For example, children who are gifted could be grouped in a classroom and provided differentiated programming, and yet we can't do that. Children who have learning disabilities who require specialty teachers are spread out in a school rather than being able to be grouped together to learn how to learn. Children with autism — there are specialty schools for children with autism. Why can't these children be grouped in the school system instead of having to take them out and parents having to drive long ways and spend a lot of money to get them an education that they believe is what their child needs?

[1550]

D. Donaldson (Deputy Chair): Appreciate the presentation and the recommendation around the government-controlled gambling revenue. Were you able to take the opportunity to make those views known to the task force that's investigating?

B. Hobson: Not on a personal basis. I believe my Rotary club did.

R. Howard (Chair): Excellent, Barbara. Thank you so much for coming out and taking the time.

Next up we have B.C. Community Living Action Group — Anita Dadson.

Anita, you have 15 minutes. Around ten minutes, if you're there, I'll just give you a reminder, and you can either stop and take questions or keep going if you like.

A. Dadson: Okay. Thanks very much.

I'm very pleased to be back again. I think this is the fourth time I've shown up — the other times on the same subject, saying the same thing. I'll just quickly let you know that I am a parent. Our daughter lived for 34 years, was in the care of the ministry in the first children's group home in North Vancouver called Quinton Place. She had cerebral palsy, required total care in all aspects of her life.

I've been a founding member of the North Shore Disability Resource Centre, so I've been involved in this for over 40 years. I've been privy to some incredible resources that have developed over the full banner of that time, but in the last two years I've been becoming increasingly concerned about the deterioration of the community living movement, which is such an important part to the people that I'm representing here today.

The B.C. Community Living Action Group — you have it listed in the reports that we've submitted to you — is a group of organizations that have got together because we all are speaking on the same page, have the same concerns about the diminishing resources that are available to people with developmental disabilities and their families. I'm sure you've all been reading the paper. You certainly saw the report yesterday that some $6 million has been put into Community Living B.C. to help meet some of their urgent needs that they have been unable to meet.

The concerns that we have been bringing forth are that we've attempted to meet with your minister, Mr. Bloy. He has refused to meet with us as a group, which the rest of us decided we really needed to meet as a group, because we're all on the same page. This has been very, very disappointing and frustrating to us, because we feel we represent a very good cross-section of people who care deeply and many of them are family members who are struggling.

You've also read in the papers the many, many concerns that have been brought forward. This has not been easy for families who want to bare their soul to try and point out just how seriously affected they are by lack of the ability of Community Living B.C. to provide at least some services that they are requesting.

Community Living B.C. has been forced to redesign service as a way to save money. It has not, as they seem to want to put forward, been because there are better ways of doing things. The whole community living pro-
[ Page 1242 ]
gram is based on better ways of doing things, and we definitely…. If there's a person living in a group home who would benefit better by living in a supportive housing situation, then I think that has been happening.

Well, I could go on and on, but the fact is that we have been doing an assessment of the cost pictures. The community living supports have been cut back over the years when you consider the number of new demands that are coming to them from families who have disabled loved ones.

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In particular, a big, big concern has been hitting, as we call it, the black hole — or hitting the wall — when a person hits age 19 and they are moved from the Children and Families system, which in many ways is very good. Then they suddenly lose those services, or most of them, and they're faced with the reality of having to renegotiate ongoing services.

Many, many, as you know and have heard from the heartrending stories families have been forced to talk about to the media…. Suddenly their services aren't there anymore.

Somehow that coordination and that promise of planning from age 14 on…. So many of our loved ones don't get better. They get better in many ways because they're able to maybe get out and do part-time work, or they can learn to walk or learn to say a few words or something like that. But it's a lifelong disability.

The consistency of planning, as we've always said, from the birth room to the end of life…. Sometimes many hop off that, thank goodness. And a lot of good services are making that happen.

But yesterday's announcement, while we are not going to put it down — although it sounds like I am, maybe — we're grateful for. We're grateful for the fact that at least, there's the beginning of a recognition that the whole service is underfunded.

As I say, I'm speaking on behalf of this coalition of people. The unions are part of that, and this is the first time in my 40 years of experience that we have worked, bringing all the different players together to the same table with the same concerns. To my mind, the service industry, the backbone of this, is these wonderful workers who are out there working for our loved ones.

Believe me, my daughter was in care for over 22 years, and I can tell you that the people that helped us in ensuring she had a good quality of life are outstanding. It's because of their training and so on.

So many of the new service redesigns are scaring many, many families, because they're really moving into less costly services, and this is not necessarily…. For some, it may help, but for many, it won't.

When you hear of group homes that have been closed, where people have lived together and become a family after 20 or 30 years and suddenly are going to a private home or something, it's devastating. I can imagine what a regular guy or gal would go through if they had to go through that.

So I guess we're here just trying to lay out the facts. This is trite to say, but a caring society looks after those most in need, and many of the families who are being supported get very little help from the ministry, and rightly so, because they're in a position to offer it themselves. And we do that. We give the most we can, because disabled people bring something very special to our lives and to the community. Now, so with the closure of the institutions in B.C….

We can be very proud of that, and we've made some great strides, but I guess I'm here appealing, on behalf of the B.C. Community Living Action Group, that you put pressure on the Treasury Board or whoever comes up with the decisions to prioritize and perhaps seriously look at the underfunding.

We're grateful for the amount that did come in yesterday. Rather suspicious of the timing, to be honest with you. We've become rather skeptical.

Anyway, I think I'll leave it at that. If you have any questions, I'll be happy to answer any.

R. Howard (Chair): Thank you, Anita. We do have a question.

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D. Donaldson (Deputy Chair): Thank you very much for your presentation. Appreciate it very much.

Disturbing to hear the minister refused to meet with you as a group. Were you told why the minister did not want to meet with you?

A. Dadson: No. We were told he would prefer to meet with the individual players. Those appointments were offered, but we as a group felt it would be more effective, because we're all on the same page, so we as a group insisted that we meet as a group. It did not happen.

J. Thornthwaite: I just want to say thank you very much, Anita, for all the work that you do. I know that you do a lot. I just wanted to congratulate you on the work that you do and thank you.

D. Hayer: Thank you very much, Anita. I have heard you before make a presentation. I really appreciate everything you do and your presentation this time.

My question is: have you met with the many people who have moved from the group homes to those other arrangements they have made?

I had some people contacting my constituency. They had mixed views. Some were really happy; some were not. But there were quite a few who were saying, in the beginning: "We weren't happy." But after they got used to the new one, they said it was better than the other one. I was wondering if you have personal
[ Page 1243 ]
experience with both points of view or only one side of the view.

A. Dadson: No, I don't. I know of one who was very unhappy with the move. She was moved after 20 years from a home with three other women.

Now, I'm sure there are some it will work out for, once they get moved. We're not denying that. But I guess many of us who have had the care of, especially, the higher-care-needs young people, it's a 24-hour-a-day commitment.

Unless the proper services are being put in place to assist the home care provider — the major mother or family that is taking in somebody to live with them — I guess many of us are very concerned that it's not going to work and that they're going to be faced with another move and another move.

It's the staffing and the commitment and the understanding of the developmentally disabled person. Really, you need very good training, and there's some very good training going on. We've got some wonderful caregivers out there who, many of them, have been around and working for years and years. I know that in our own situation many were committed for 20 years or more. So it's not just a sort of a short-gap type of job. But your point is well taken.

There will be some who will benefit from the move. I think one of the biggest concerns that we the families have heard is that the timing has been so quick.

For families who had thought they had worked for years to get a good plan for their loved one, suddenly it's falling apart, especially for older parents — and I can relate to that — who have reached a point where they're worrying about their own health and their own reality. One of the comfort things is that they thought they'd made good plans and that they had good resources there to be their comfort zone if and when they passed on.

Suddenly having these plans change without proper involvement and real, good confidence that it's going to work is terrifying to families, especially the older families. I can tell you, having had to place our daughter, it's not easy. It's one of the hardest things a family has to do — when they have to face that they need help in the day-to-day care. We all need help with our kids. God knows, it's not easy times for anybody. But your point is well taken.

D. Hayer: Thank you very much. Thank you for doing a great job on this.

R. Howard (Chair): Thank you, Anita, for taking the time to come and present to us today.

A. Dadson: My pleasure, and thank you for listening. I hope I won't have to come back next year.

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R. Howard (Chair): Next up we have the B.C. Technology Industry Association — Bill Tam.

Welcome, Bill. You've got 15 minutes. You can speak for ten and leave the last little bit for questions if you like, leave the last five for questions, or you can go right through. At about ten minutes I'll just give you a reminder.

B. Tam: Great. Well, thank you very much for the opportunity to address the committee in the prebudget consultation process. Perhaps what I can do is start with a quick snapshot of our industry. I'm very proud to be representing the B.C. technology industry here.

We're now close to about 9,000 technology companies in B.C. We've been producers of large and global leaders, like MDA, Cardiome, Electronic Arts, Sierra Wireless, PMC-Sierra — all backyard successes here in B.C.

We have been very fortunate to generate a disproportionately higher contribution to the overall GDP for the province — $9.3 billion a year. That's allowed us to employ about 83,000 people in the province, with very high-paying jobs, jobs that generate wages that are 50 percent higher than the industrial wage average in B.C.

We've seen a 50 percent growth in our industry over the last ten years, and that's allowed us to really outpace the growth of most of the other industries in the province. But looking ahead, we're really excited because now, in the next ten years, we have the opportunity to more than double the size of the industry; increase the productivity of our traditional industries in B.C.; create more stable, high-paying jobs; and bring added wealth to the province.

Really, to realize this opportunity, we must address what we call a fundamental growth gap in the size of technology companies in B.C. today. Today over 94 percent of all the B.C. technology companies are small companies, those with fewer than 50 employees. Meanwhile, there's less than 1 percent of the whole ecosystem that has greater than 500 employees.

This growth gap can be addressed by really helping to advance small-sized companies and help them grow into mid-size companies, companies with more than 50 employees. The reason for this is that mid-size companies feed the innovation continuum. They have the resources to sustain R and D. They have the opportunity to grow exports; expand operations; and really add to stable, high-paying jobs.

More importantly, they form a pool from which we can draw upon larger anchor companies that will emerge and create a growth ecosystem. That includes reinvestible net income, growth financing, development of skilled managers and a vibrant industry that's going to attract new talent and capital, fueling the ongoing growth of the industry, our economy and jobs for our kids.
[ Page 1244 ]

This government has been a strong supporter of technology innovation through programs such as the provincial SR-and-ED tax credit program; the venture capital programs — the VCC and EBC programs; and the B.C. Renaissance Fund; in addition to a variety of strategic investments such as the BCTIA's Centre4Growth.

We believe that continued strategic investments in the growth and health of the industry will continue to yield more companies; more stable, high-paying jobs; and more economic prosperity for British Columbia. To that end, we offer the following recommendations as considerations for your budget consultation process: firstly, to reinforce our existing access to capital programs and, secondly, to support programs that continue to accelerate the success of small and mid-sized technology companies.

On the first point, reinforcing the existing access-to-capital programs, it's clear that the capital crisis has led to a particular impact on early-stage technology companies, where things like access to capital are central to growing and sustaining those businesses. The provincial SR-and-ED tax credit plays a critical role in allowing these companies to leverage their comparatively lower levels of investment and increase their hiring by 40 percent or more.

Additionally, the venture capital programs we have in the province, such as VCC and EBC, have really catalyzed the growing base of investors and created an important source of early-stage financing for tech companies.

As such, we recommend that the government continue to support the access-to-capital programs by, firstly, enshrining the provincial SR-and-ED program into the British Columbia Income Tax Act, thereby making a long-term commitment to the ongoing development of technology innovation in our province and removing the sunset date, which is currently September 2014.

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The second point is to continue to support the existing venture capital programs — the VCC and EBC programs — and the B.C. renaissance program so that we can continue to ensure that there is availability of early-stage financing for tech companies.

On the second point, which is really supporting the growth of small and mid-size companies in B.C. In September of 2010, acting on the recommendations and goals that we had set out in 2009 in B.C. Opportunity 2020, we launched a program called Centre4Growth as a two-year beta program to support small and mid-size companies. That is due to sunset in March of 2012.

Centre4Growth addresses this growth gap by delivering high-impact, direct support for high-potential technology companies and entrepreneurs and their companies. It really helps to expand the core capabilities of these companies, helping them to focus on commercialization, growth in exports, revenue, investment and employment.

Since its launch, just about a year ago today, we've already achieved some outstanding results. We've had over 160 companies that have received direct assistance. We've provided over 8,000 hours of one-on-one coaching and collectively have grown by over $15 million to these companies in terms of revenue and investment and created 71 new full-time jobs. In just this one year Centre4Growth has really stimulated growth for our companies and created an additional $6½ million in regional economic benefit for the province of British Columbia.

As I mentioned, the program is due to sunset in March of 2012. We believe we have a proven program that's working but needs additional resources to continue. We're requesting that the government consider funding of the BCTIA Centre4Growth in the amount of $15 million so that we can continue to further the path of success that we're on today.

Through this support, the Centre4Growth will have the resources to sustain and expand into key tech regions, such as Prince George; Kelowna; Kamloops; and, of course, Vancouver Island; in addition to the metropolitan Vancouver area. Fostering the growth of small companies into mid-sized companies, creating stable, high-paying jobs and creating regional economic benefits will be foremost in the program for Centre4Growth.

In closing, I want to thank you again for the opportunity to sit before you today, and I hope that you'll undertake these strategic investments that are needed to reinforce our capital ecosystem and the growth of our technology industry, hopefully bringing additional wealth to the province, lots more stable and high-paying jobs and the infrastructure to support all the industries that we have in British Columbia.

R. Howard (Chair): Thanks, Bill.

We have a few questions.

B. Ralston: Thanks very much. I had understood that the SR-and-ED program parameters were determined by the federal act and the provincial government simply contributed to that sum of money as a percentage of that. You refer to a separate SR-and-ED program, and you want it enshrined in the Income Tax Act.

Now, I understand that the federal program is undergoing a review, which is going to report out in October. There are some concerns about the way that program works. I'd like your comment on that.

Secondly, you mention the issue of scale. Generally, the problem, I think, in the tech industry has been that companies get to a certain size and then they're acquired by someone in the States, and most of the intellectual capital and head office personnel move out of the jurisdiction.

Is there any recapture of earlier incentives that are offered to companies at those stages when they're sold
[ Page 1245 ]
out, when they sell out to a foreign acquirer, in order to provide opportunities and capital for companies that choose to stay in British Columbia?

B. Tam: Right. Well, thank you for your questions.

On the first item, you are quite correct. The provincial SR-and-ED program is an add-on on top of the federal program in the amount of 10 percent. There is a review process that is being undergone by the federal government.

Our recommendation is solely on that provincial piece, which has continued to see extensions since its introduction several years ago. That component of it is due to sunset in 2014, so we are simply asking for the continuation of that 10 percent top-up on an ongoing basis, without that due sunset date.

On your second item, it's certainly clear that there have been a number of companies in the history…. I do come from an entrepreneurial background, so I've had firsthand experience in companies that have been acquired, as well as companies that have grown and crossed that growth gap, if you will.

I consider that there are two elements that are quite critical in the assessment of how that feeds the overall ecosystem and the health of the economics of the province.

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First, the experience factor that these companies gain. Actually, the entrepreneurs that do engage in, let's say, an M-and-A transaction — ultimately sell to another interest — do come back and forge new companies, or else they are participants in the mentorship and the coaching that we contribute towards the growth of new companies. So that's a very important aspect.

The second component is that much of what we've been doing on the access-to-capital piece and…. Why elements such as SR and ED and the access-to-venture-capital programs such as VCC and EBC are so important is that over the last number of years the comparatively lower levels of capital investment in these companies has created pressure points on companies that are not able to successfully expand on that next stage.

So the options become more narrow in scope in their assessment of: do we sell, or do we continue to grow? I think that's an area that we need to have ongoing focus on to see how we can continue to nurture these companies to grow to more substantive sizes before they need to look at transactions of that nature.

M. Stilwell: Thanks, Bill. The Centre4Growth is one of a number of programs that are arising in the province and all other First World countries around accelerators, incubators — trying to figure out the magic in the mix. What do you think the BCTIA's role should be to try and make sure that these kinds of programs are coordinated and collaborative where needed — not duplicative, but to make sure that you do fill that gap with a continuum?

B. Tam: Our perspective on Centre4Growth is that we've had early successes in a few places in the province, including Victoria, Vancouver and in doing some work out in Kamloops. But certainly, we think that it's a model that could be universally applied throughout the regions in B.C., with sort of some common best practices in the energy and vigour of the tech community at large, be they entrepreneurs who've had past successes or ones that just want to contribute to the overall ecosystem.

The scalability, I believe, is there in the model, and I think it's simply a case of putting more resources to work and having the benefit of partnering with all the various regional associations to have common delivery mechanisms in place.

D. Donaldson (Deputy Chair): Thanks for that presentation. I have a question around the Centre4Growth. Especially, specifically you mention Prince George and the high-potential technology entrepreneurs. I know from experience that the bioenergy and biofuels technology sector there has great potential.

The $15 million you're proposing to sustain the program for the next five years. You mentioned that this was a two-year beta program that'll sunset in March 2012. Was there a funding allocation by the provincial government to help launch and sustain this two-year beta program, and how much was that?

B. Tam: Yes, there was. The original funding allotment that we received from the province was $400,000, which…. We received an additional $400,000 from NRCC-IRAP and $400,000 from western diversification.

R. Howard (Chair): Excellent. Thank you, Bill, for coming out and presenting to us today.

Now, I think we're a little ahead of schedule, and our next group is still awaiting one, so we'll recess until, say, 4:35.

The committee recessed from 4:19 p.m. to 4:30 p.m.

[R. Howard in the chair.]

R. Howard (Chair): Up in front of us we have the Motion Picture Production Industry Association of British Columbia — Peter Leitch, Brian Hamilton and Menashe Arbel.

Welcome. Fifteen minutes. I'll give you a little reminder at about ten. You can leave some time for questions if you like, or you can go right through. It's up to you.

P. Leitch: We're going to try and leave a little bit of time for questions, so we'll get rolling.
[ Page 1246 ]

Thank you very much for seeing us this morning. My name is Peter Leitch. I'm the chair of the Motion Picture Production Industry Association. My day job is we've got two major studios in town, called North Shore Studios — which was North Shore, then Lions Gate, then back to North Shore — and Mammoth Studios. This is infrastructure that facilitates…. Each one of them will facilitate about a thousand jobs a year.

For starters, I'd like to give you a brief overview of the industry. There are different components of the industry. First of all, there's the service side of the industry. This is mostly the work that comes up from Los Angeles. Then there's the B.C.-based production companies. These are companies that are based in Vancouver. These are local people that are creating intellectual property here in British Columbia, and this is a really important component of the industry.

Then we also want to talk a little bit about the post-production end of the business. There are a number of components to that.

Certainly, we can talk about the success of the visual effects industry. Because of the digital animation or visual effects tax credit, which is another labour tax credit, we have attracted a world-class community of some of the best post-production visual effects companies in the world here.

Some of the key companies that we've been struggling to make sure survive here and that are an integral part of the film sector here are the other post-production companies. These are the companies that provide the sound. If you've ever had the opportunity to go to Menashe's place, it's a fantastic process.

There are very talented individuals here. That's what makes this a real film centre here versus just another location where you go, you shoot and you ship, as they say. You go and shoot your film, and then you just ship it back to Los Angeles.

That's a sector we're really concerned about right now. One of the reasons they're struggling is that, first of all, they're not covered by the DAVE tax credit. Menashe's going to cover that. Secondly, the B.C.-based production is way down here for a number of factors, which Brian is going to cover separately. That's a really important factor in terms of what our strategy is in going forward in the industry.

Other than that, the service sector…. We've survived fairly well, despite the high dollar. One of the reasons is that we've had consistent, competitive tax policy. That's been extremely important for us.

I was involved quite seriously in the HST debate, where I was co-chair of the Smart Tax Alliance. The reason we got involved in it as an industry association, and myself personally, is that it was an extremely important competitive part of our tax structure.

Once Ontario certainly announced that they brought in HST, it was imperative that to keep up…. We'd fallen a little bit behind on the tax credits. They brought in an all-spend tax credit. We weren't big advocates for that type of a tax credit. We believe in the labour tax credit. We think it's much more auditable and trackable, and it directly impacts labour that's already paying taxes here before they get the rebate.

I think we'd like to differentiate ourselves. I'm kind of proud of the way we've done that with that particular tax structure.

It did leave us a little bit behind Ontario. We weren't sure exactly how we were going to survive, because their 25 percent all-spend credit is a fair amount more aggressive than ours.

I think the reason we survived that is because of the infrastructure we've developed. We've got about a billion dollars' worth of capital investment in this industry from the private sector now. That includes studio facilities, post-production facilities, visual effects companies. That includes all the equipment that you see — the camera trucks and all the different vehicles that you see on the streets, the lighting equipment, etc.

There's been huge investment by the private sector. We've got extremely talented people here. That's right across all disciplines, including our local producers here that can now produce world-class product.

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One of the things, as I say, that we are lacking is a competitive environment for those other post companies, besides the visual effects and animation companies, which get the DAVE tax credit, and those post-production companies like Sound and companies like Technicolor and Deluxe, which are really struggling. Again, we want to keep them here because going forward if we have those companies intact and it doesn't cost a lot of money to keep those companies, we're going to really differentiate ourselves. I really think that we can become a world centre for digital entertainment in British Columbia.

I think you're going to see a consolidation in the industry. We've seen a number of U.S. states, which have very aggressive tax credits, which have attracted the industry. Now that the U.S. dollar is even lower than the Canadian dollar, we're seeing some migration of business there, but some of those places aren't particularly desirable to shoot in, and they certainly don't have the infrastructure that we have. So we think there's a great opportunity for us to continue to grow this business.

But there are some issues. One of them is, of course, that the loss of the HST is going to be significant not only for the service side of the business but for the B.C.-based part of the business. The reason it's even more significant for the B.C.-based part of the industry is that end is even more competitive. In Los Angeles they come up here because they do a big feature film like Night at the Museum, for instance, and they have great success with it here, so they want to come back because of the talent and everything else.
[ Page 1247 ]

B.C.-based producers have to struggle to get funds from all sorts of different sources, and that differential makes a big difference. There are a number of factors, which again, Brian will cover.

I'd like to now turn it over to Menashe to talk a little bit about the post side of things.

M. Arbel: Hello, my name is Menashe Arbel. I'm the president of Post Modern Sound. Post Modern Sound is a company of more than 30 years in the business. We have a state-of-the-art facility that includes 25,000 square feet, eight studios of state of the art, with a multi-million investment into the infrastructure.

The main issue is that sound in our case is the only part of the post-production and production of any animated or visual effect or any production that comes to B.C. that is not included in the DAVE tax credit. Historically nobody can give me the reason for it, but when whoever producer comes to our building…. If Brian comes to my building with a piece of a drive that is the same equipment, the same technology, the minute that he walks into the building, DAVE stops there. We do our thing. We are not part of DAVE, and then he leaves, and then DAVE is back in action.

The reason for that — it doesn't make any sense — we are not in a position to compete on work that is shot here and done here, but it's going back to L.A. or to other jurisdictions to finish. So really, what we are trying to do in order to compete is to include post-production within the DAVE tax credit, and we think it would give us a tool to gain back work that we are losing.

The last two or three years post-production in Vancouver lost a substantial amount of the workforce — what we call human talent. They are leaving to other jurisdictions. We predict that by 2015 we are going to lose about 60 percent of our infrastructure and talent.

We employ 35 to 40 people, all of them trained to do what they do. A mixer, for instance. It's standard: 15 years of experience on the job. If they leave, if they go elsewhere, it's almost impossible to train in a short period of time, so we have to go to other jurisdictions as well. A student. I have on my desk hundreds of resumés — people trying to volunteer. We can't offer them any work because of the difficulties that our sector in the process is suffering.

DAVE can give us a tool to go back and try to survive and not lose the infrastructure. Nobody is going to build Post Modern again if we close shop or we continue to shrink.

Thank you — and Brian.

B. Hamilton: Good afternoon. My name is Brian Hamilton. I'm a partner in Omni Film Productions. We're one of British Columbia's most established and most successful production companies. We were founded in the 1970s, and we've produced hundreds of hours of award-winning television that's seen in more than 70 countries around the world.

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We are notable because we are an export-driven company entirely. None of our clients are based in B.C., so the revenue that we generate — last year it was $24 million — comes entirely either from other provinces or internationally.

I'm here to represent the employers in the film and television sector who take on the early, high-risk activities of developing an early concept and bringing it to fruition on the screen. We're the people who hire the B.C. talent, the crews and the post-production facilities, and we decide where we film, because we're in control of the intellectual property. It's our project, and we're the decision-makers on it.

I'd like to just outline a brief success story. In 2008 our company, with support of the B.C. government's R-and-D program then in place at the time, invested $25,000 in an early, high-risk activity. That activity was: we produced a demo tape, based on an article that we'd read in a magazine. That magazine article was about an airline up in the Arctic that was run by a family, kind of a cowboy sort of environment, and we bet $25,000 that this group of people would be terrific characters in a new television show.

We made our demo, we brought it to Toronto, and in the first meeting we had, the broadcaster bought it in the room. They said, "Don't take it anywhere else; we're broadcasting this," and soon after, we were producing a series that generated about 50 jobs. It was a $5 million series. Fast-forward to today. We've now finished season 3 of this series, and we're preparing season 4. Also, based on the success of that show, we have developed a lot of digital content and mobile content to increase our audience's interaction with the property, and that has spawned other jobs in this digital sector.

Perhaps most important for job creation here in the province is that ten days ago we began principal photography on a show that was inspired by Ice Pilots. It's called Arctic Air, and if you haven't heard of it, it's the CBC's newest flagship drama series. It'll be launching after Christmas, and it'll be on billboards. It'll be in bus shelters. It'll be widely released, and CBC's most important project. That is a fictionalized adaptation of the stories that we first came across in this northern location.

Now, Arctic Air has, of course, a much more substantial budget. If you combine our original documentary series with the fiction series, that speaks to at least 200 jobs that that one little idea and that one little investment has triggered. That's just in one year. It's a multiple-year proposition. The series will go as many as five or six years.

That's a success story that we're obviously proud of and that the province can be proud of. Why am I telling this story? It's because I passionately believe that this
[ Page 1248 ]
province needs more of those success stories. I mean, certainly we have things we can be proud of, but in the years since the original demo, the original R-and-D money, was invested, our competitive edge has eroded significantly in three particular areas.

The first one is the R-and-D funding. Back in 2008 the agency funded by the government, called B.C. Film, had an R-and-D support mechanism that was partnered with industry. That was part of what made it possible to film up in the north and do this demo. That has now disappeared because the funding of that agency has been cut by 50 percent, two years running. Meanwhile, Ontario, investing in this sector, has more than doubled their agency's budget. Comparable figures…. I mean, I won't even go into it in this short time frame, but B.C. is lagging not just behind Ontario on a per-capita basis but behind most provinces in that area.

The second factor is tax credits. You know, Ontario is the jurisdiction with which we entrepreneurs most compete. That is where the more established companies are in the country, and it's certainly the case that since 2008 there is a larger competitiveness gap in between B.C. and Ontario.

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Of course, the last factor is HST. Ontario producers don't pay it, or they pay HST, which is fully refundable. Because of the referendum, we are confronting the reality that our projects may be approximately 3 or 4 percent more expensive than they were before.

All these factors together — three of them — put us in a more challenged position in general, so my message overall is….

There are companies here who are doing work that is on the world stage, generating new money, bringing money to the province, but we propose that government and industry work together to find solutions to improve the competitive environment so that there are more of these success stories we can point to and speak about in the future.

Thank you very much for your time.

R. Howard (Chair): Excellent, gentlemen. We've run you right out of time. We appreciate all three of you coming and taking the time to make a presentation to us. If there's anything else, you know where we live and you can contact us directly.

P. Leitch: Okay. We'll be submitting a written proposal.

I guess we're out of time, but one of the things that we see really benefitting in terms of the B.C.-based production, also, is that it can happen anywhere in the province. There have been millions of dollars spread throughout British Columbia, with our fantastic locations. But there's also great talent in these outlying areas that I think we can really tap into, especially with all the opportunities with the way digital communication works nowadays. That's another great opportunity for B.C.

R. Howard (Chair): Excellent. Thank you.

Next up we have the Guide Outfitters Association of British Columbia — Scott Ellis.

Welcome, Scott. You've got 15 minutes. You can take it all, or you can stop partway and allow for some questions.

S. Ellis: Thank you, Mr. Chair and committee members. I have some ideas for a new TV series, but the guys left already.

A little bit about me, I guess. First, I'm the executive director of the Guide Outfitters Association of British Columbia. I guess I'll start with wow, you guys have a tough job.

I'll try not to whine and try to make our ask simple. I think that when you look at some of the difficult situations that are out there, whether we're talking about where we are with the carbon tax or any other kind of tax or cap-and-trade or…. We don't get any tax credits, but….

I think that you have a big task in front of you. I think that what we've got here is some low-hanging fruit, so hopefully, we can clearly articulate that to you.

First, a little bit of background on the guide-outfitting industry for my urban friends who may not be aware of us and who we are. We're the founders of the tourism industry. This dates back to the late 1800s.

Guide territories were established in 1961. That was really a good vision for the government of the day. This did two things. One, it developed strength in tenures, and it was the beginning of wildlife stewardship. This type of ownership really had the guide-outfitters take a long-term look at how they manage wildlife, what the habitat was like and invest in it over the long term.

The whole province is divided into guide areas, actually, and 233 of them are active right now. They are all small, family-run businesses — no corporations. Many of them have been passed down from one generation to the next, and I think both government and guide-outfitting have a proud story to tell about our heritage and sound wildlife management in the province.

We're blessed with 18 of the North American big-game species. We are a highly renewable green resource. I think that our sector is a very strong indicator of the business environment, specifically in rural British Columbia. I think that's a comparison to kind of like the canary in the mine shaft.

The association, GOABC, was established in 1966 and currently represents about 80 percent of the guide-outfitters in the province and advocates on the needs of the industry to government and to other stakeholders.

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[ Page 1249 ]

We are a strong advocate of science-based decisions, even to the short-term detriment of some of our members. For example, MLA Bennett may be aware of the grizzly bear closure in the Kootenays in a very specific area. We will advocate and support government decisions when they're based on science.

We do our best to look at emerging markets and help not only market "Super, natural British Columbia" to the world at international shows but look at emerging markets and help our members market their hunts.

The GOABC also has a strategic alliance with the B.C. Fishing Resorts and Outfitters Association. In your package you'll see a press release of our strategic alliance.

Specifically, our industry represents about 2,000 rural jobs, which represents about $116 million per year. The significance there is that we support other rural businesses in all parts of rural British Columbia — gas stations, air charters and all different kinds of shops.

Tourists that come to this province, as the film group just mentioned…. You know that obviously, they're very valuable. Basically, they are almost all non-resident clients, and they spend more per capita per day than any other tourists to the province — an average of $23,000 per client. Obviously, they have a very high disposable income, and with a good experience in the province, they bring their families back in the future.

Back to your tough job of balancing the budget in 2013-2014. Good luck. We understand the value of maintaining a very good credit rating, and we support that desire.

I think that this will require many parallel strategies. There's not one fix there that will solve all the issues. Listening to many of the proponents here come and talk…. Well, I wish you well.

There are a couple of things that we see that we're going in the right direction on. One is the idea behind Forests, Lands and Natural Resource Operations. The idea of increased efficiency through that ministry, I think, is going to be good in the future, and we expect to see some savings and synergies for our sector. Reducing red tape, an unnecessary burden, is always something that benefits both the guide-outfitting community and government.

I appreciate the tough spots and holding a line on public sector wages. Just a little context there. Our association doesn't believe that government directly creates jobs — at least in the private sector, anyway — but you create an environment with business certainty and investor confidence. That's what I want to talk to you about for our sector.

Why should you care? Why should you help? Well, we're at a crossroads right now. Option 1 is no support. There'll be further pain to rural British Columbia, and the industry will flounder. With some simple fixes, we have the opportunity to double revenue and increase business certainty and investor confidence to solidify the sector for future jobs.

So this five-point plan. One is a fair and predictable harvest allocation policy. Currently this policy is under review. It's our position that cuts to our side, or our sector, have gone a little bit too far. This is going to be felt mostly in the Cariboo region and the Kootenays, but there'll be some small family businesses in other parts of the province that'll be significantly impacted as well.

We only want to harvest our share of the annual allowable harvest, and we expect some mitigation to come from the Trumpy report that's before government as we speak. I think the decision from the minister is imminent, and any support on that would be appreciated. But going forward, that's only one of the points.

We need a policy that eliminates competition between the users. We need to recognize what our sector needs as far as equality in wildlife management and support for inventories. Support for inventories, so that we know what wildlife is out there, will appease both the guide-outfitting community and the resident hunters of the province as well as the 98 percent of the province that doesn't hunt but is concerned about wildlife.

Point 2 would be a consistent, predictable First Nations consultation framework. This is a burden for all three: government, First Nations and industry. It's not clear. It's not consistent. It is a problem, and it's affecting buying and selling in guide areas and investment in the province.

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Some type of streamlined process that's predictable, that's clear for all parties would greatly enhance the process for tenure renewals and tenure transfers in the province.

Number 3: access to conventional financing. This is a simple change to the Wildlife Act. Right now we have ten-year tenures. We had this before government — to increase that to 25 years. This will significantly improve our opportunity to have access to conventional financing. In the past that was not as significant as it is today with this economy that we're in.

The other point that would raise revenues also for government is…. I mentioned that the province is divided into guide areas. Many of them are vacant, and government can look at selling the vacant guide areas — a huge opportunity to generate revenue there.

In regard to reduction of red tape, point 4, there are many regulations that impede and discourage investment, and we've put those forward. You'll see them in the attachment of the Challenges and New Opportunities paper that you have before you, but basically: removal of the requirement for assisted guide licences, the need for electronic licensing, electronic reporting for decorations, the linkage between the Land Act and the Wildlife Act and simplification of reporting in parks. These are all policy or procedure changes that have been put before the FLNRO and really will reduce the burden on both sides for business to succeed.
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I guess lastly, the fifth point, is a regulatory framework that works. I think that all British Columbians have an interest in how wildlife is managed in the province. As long as we stick to the North American model of wildlife management, you're going to be on solid ground. Basically, it's that law and science dictate how wildlife is managed, not based on any other public opinion or whim of the day.

This five-point plan will help create business certainty and investor confidence for the guide-outfitting industry and create jobs in the future. I think these solutions are relatively simple to implement.

Thank you for your time.

R. Howard (Chair): Excellent. Thank you.

D. Donaldson (Deputy Chair): Thanks, Scott. Good to see you again. Thanks for your comments. I recognize and know firsthand the impact that guide-outfitting has in rural areas as far as sustainable jobs. We know that most of our colleagues are out there right now hunting and taking clients on trips, so that's a good time of the year for that.

One comment on the inventory work. It's science-based. I was glad to hear you mention that. I would just say I believe that proper inventory work can mean more jobs, so it is something government can do to create the structure for more employment to happen. We've heard that from others in the natural resource industry, saying we need more attention to that — whether it's Ministry of the Environment, NRO now, or other such ministries.

My question is around a conversation we've had, and one I've had with guide-outfitters, around multiple uses of the land base. I support multiple uses of the land base. I'm just trying to arrive at processes and ways that that can happen without elimination of jobs, especially in the guide-outfitting industry.

We talked about the overlap of mining tenure and guide-outfitting tenure and the potential for that one industry to disrupt the guide-outfitting industry and perhaps the topic of monetary mitigation that's involved in that. Have you made any more progress on that front with government policy so that it's not just up to the guide-outfitter in the area to take on the topic but has a framework to work within from a government policy aspect as well?

S. Ellis: Big question. I guess we understand that 95 percent of the province is Crown land and that there are multi-users.

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And with mineral prices where they are, the desire for wind power, we're sure seeing a lot of challenges on the land for the different uses. So I think the environmental assessment office…. I think that process works. I think that generally, tenure holders are provided notice and are allowed to, hopefully, work with the proponent on whatever that development is going to look like.

We kind of go through a process there, whether it's avoid, mitigate, compensate. And when we're talking about a mine going in, for example, and it's hundreds of millions of dollars, I think that in those situations, whether it's….

Ideally, it would be a government process, but right now there isn't one. There's rumour of one, but right now it's up to the individual outfitter or me, specifically, to negotiate with a proponent on what kind of monitored mitigation or compensation would be paid. We have many examples of those around the province. We have many of those underway right now. So I expect many more to be coming.

If it gets to the point where it's that significant, it really…. We're really looking for a mine, for example, that is going to devastate a business, basically, to buy him out.

R. Howard (Chair): One minute left.

P. Pimm: Scott, thanks for the presentation. I just want to kind of go on record that certainly, your industry is a big part of rural British Columbia. I think my colleague here would attest to that as well. We certainly want to see it survive and thrive, going forward in the future. I know we don't have much time, so I won't get anything or put you on the spot for any questions.

R. Howard (Chair): Scott, thanks very much for coming out and making the presentation today.

Next up we have B.C. Teachers Federation — Susan Lambert.

Welcome, Susan. We've got 15 minutes. You could either take ten and then go to questions, or you can go right through 15 if you want. At around ten, I'll give you a reminder that we're around ten.

S. Lambert: Okay. Thank you very much.

R. Howard (Chair): Welcome.

S. Lambert: Thank you for this opportunity. I'd like to introduce members of our provincial executive committee who are here with me today.

Very quickly, that's Kip Wood from Nanaimo; Rick Guenther from Abbotsford; David Komljenovic from Kamloops; Joanna Larson from Prince Rupert; Paul Steer from Delta; Teri Mooring from Quesnel; Glen Hansman, who is the second vice-president and from Vancouver Elementary; and Denise Moffatt from Surrey. They are with me here today.

Just to introduce you to our brief, we have three sections to the brief: the introduction, an evidentiary base in the second section and then the conclusion. I'm just
[ Page 1251 ]
going to very, very quickly skip through it to give you what I hope are the highlights, and then maybe there'll be time for questions at the end.

We appreciate the opportunity to present our views on the provincial government's budget to the Select Standing Committee on Finance and Government Services. It is a crucial time for public education in British Columbia, and we take very seriously the chance to provide information and our perspective on the relationship between the budget and the needs of students and teachers in B.C.

As we are sure you know, we believe that public education in British Columbia is underfunded. We have heard many times that the schools have the highest funding ever, and while that may be true in actual dollars, it is not true of the levels of services that those dollars can purchase.

The costs of running schools have gone up more than the funding provided. Some of that is because of inflationary factors, but also a significant amount is a result of costs that have been downloaded onto school districts.

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As you know, taxation is the way we've chosen as a society to redistribute wealth in order to purchase services and products we cannot individually afford — services and products like roads, like medicare, like public education. The B.C. government has cut taxes substantially over the past decade. In particular, it reduced taxation on corporations and for those with the highest incomes. These tax cuts shrank government revenue, resulting in cuts to public services, including education.

However, the people of B.C. rely on government services and expect them to be of high quality. When they see that the services they need are being funded by an increase in taxes and those taxes are greatest for those who can best afford them, the public readily supports such a tax regime.

Having a good public education system is not optional. It is essential for the health of our society and our economy as well as for the development of the potential of every child. That is why the funding must be there to restore the strength, resilience and quality to the system.

I'm going to take you now through the evidentiary base we have in the second section. It starts on page 4. That one starts with statistics around class composition. Class composition is how we refer to the makeup of a class and the needs of the individual students within that class.

The graph in front of you is a chart of the number of classes with four or more students with IEPs, individual education plans. They are plans that are developed for the educational needs of students with more extreme learning challenges that they have to face.

The number of students with special needs has been increasing in most directly funded categories — most notably, students designated as having autism spectrum disorder and physical disability or chronic health impairment. All of those categories have increased. At the same time, we have fewer teachers to deal with those types of students. Here's a chart where we see that there has been an increase year after year after year of the number of classes that have class compositions that, in our view, tax our ability to meet the individual needs of the students within them.

Over the page, on page 5, we talk about the situation in English as a second language. I am going to skip through, and I do hope that you spend the time to read this brief in detail later. The enrolment in English as a second language has increased steadily over the decade to almost 62,000. Almost double that number — about 130,000 students — live in families where the primary language spoken at home is not English. We know that the provision of ESL teachers has gone down.

Overleaf in section C. Class size has increased needs because we've had a decline in the number of teachers, and that's disproportionate to this decline in student enrolment over these years.

Special needs and ESL are two areas of learning specialists needed in the system, but they are not alone. A qualified professional teacher-librarian, of which I am one, in the library is a key factor, research shows, outside of the socioeconomic neighbourhood of the school, in improved literacy in schools. Counsellors are required to meet the increasing needs of students in the 21st century.

All of these specialist areas have taken a significant hit over the past decade, and the graph there shows that hit: 277 fewer teacher-librarians, 106 counsellors, 737 special ed teachers, 328 English teachers and even fewer aboriginal education support teachers, even though we know that particular population is probably the most needy of all and is growing in our schools.

On page 7. The number of classes with more than 30 students increased significantly between 2009-10 and '10-11. And there's a chart that shows that we have had an increase in larger classes over the last few years.

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On page 8. Provinces across the country, with the exception of Alberta, have faced declining enrolments over the past decade but have used this situation as an opportunity to improve education conditions. British Columbia, however, drastically decreased the number of educators and widened an already existing gap in the student-educator ratio compared to Canada. Between 2002-2003 and 2008-2009 the gap between B.C.'s and Canada's average SER increased from 1.8 to 2.5. British Columbia, at 16.4, has the second-highest student-educator ratio in the country. This is according to the 2008-2009 figures, the latest statistics available.

On page 9. The number of full-time-equivalent educators has gone up in every province across the coun-
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try except for Newfoundland and Labrador and British Columbia. Newfoundland and Labrador had dramatic declines in student enrolment that account for its position. Although it reduced its number of full-time educators by only 8 percent, that decline was 16 percent — so double the decline in students. That accounts for Newfoundland and Labrador's position.

In every other province except Alberta the numbers of educators went up, while the numbers of students went down. In contrast, the B.C. decline in the number of educators was the result of government policy to limit funding to boards of education. You can see in that chart that we are second from the right hand in that comparison. That doesn't reflect the significant loss of educators. We lost about 2,700 teachers in this province between 2001-2002 and 2002-2003 after Bills 27 and 28 were implemented.

Overleaf on page 10 we look at what the net zero mandate would mean for teachers. B.C. teachers' salaries lag far behind teachers' salaries in most of the country, even though B.C. has the highest cost of living in Canada. In 2010-11 a Vancouver teacher at maximum salary for category 5 earned about $11,000 less than an equivalent elementary teacher in Toronto, $12,000 less than a secondary teacher in Ottawa and $16,800 less than a teacher in Edmonton.

All provinces in Canada are dealing with the effects of the global economic crisis, yet only the B.C. government is imposing a freeze on teachers' salaries. Ontario teachers are scheduled to receive a 3 percent salary increase as of September 2011. In February 2011 Alberta government budget documents indicated a 4.4 percent salary increase for Alberta teachers. Recently a mediator's report in Saskatchewan has recommended salary increases of up to 10.5 percent over three years, depending where teachers fall in the salary scale.

If you look overleaf on page 11, you'll see where we fit vis-à-vis all the other jurisdictions across the country, and you can see us there shaded. If you take off, down to the first four, Nunavut and Yellowknife and Northwest Territories, you'll see that in Edmonton the comparative figure is $95,000, as opposed to Prince George, $74,000, and so on.

If you flip now to page 14, you'll see we estimate that if we restored the same funding ratios we had in 2001-2002, we would have $1.6 billion more in public education coffers to restore services to kids. If we went back to '91-92 ratios, we would have an extra $3.9 billion — almost $4 billion in education coffers. You can imagine how many services and teachers that would provide the students of B.C. with.

I'm going to flip now to page 16. We rank second-to-lowest in Canada in the percentage of increases to per-student funding. You can see where we are there. We're just ahead of Quebec on the right-hand column. That's about education funding per student.

The next page talks about education funding as a percentage of GDP, and again, we're falling far behind other provinces in Canada.

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I'm going now to the conclusion. This brief has already indicated how far behind other provinces British Columbia is in providing funding to public education. Similarly, B.C. has a smaller public sector overall to deliver the services that British Columbians need and want.

Clearly, the fiscal situation of the province is not a case of spending being out of control. It is a case of a decade of tax cuts that have primarily benefited corporations and higher-income earners.

Based on their analysis, the CCPA report shows that B.C.'s taxation revenues as a percentage of GDP have fallen. This amounts to a loss of $3.4 billion that would be in the provincial treasury if the B.C. government had collected the same share of the provincial economy in taxes as in 2000.

As the CCPA points out, this extra $3.4 billion in government revenues would be enough to balance the B.C. budget and pay for much-needed public services. At the same time, we must acknowledge the HST referendum and articulate a process of public consultation when contemplating an increase in taxes to increase government's capacity to adequately fund valuable public services, including public education.

However, government revenue must be increased. This must be done through a fair and just tax regime that places responsibility on those most able to contribute and returns corporate taxes to a more appropriate level. In so doing, government will be able to resource critical services adequately.

In particular, we urge the select standing committee to recommend that the levels of public education funding increase to provide students and teachers in British Columbia the conditions needed to maintain and improve one of the best public education systems in the world.

R. Howard (Chair): Excellent. Thank you, Susan, and to the rest of your group, for coming out and making the presentation today. Much appreciated.

S. Lambert: I took up my whole 15 minutes?

R. Howard (Chair): You did.

Next we have the Students Union of Vancouver Community College — Carolyn Ehman.

C. Ehman: I apologize for being extra-sustainable. We only printed out six copies of our presentation.

R. Howard (Chair): That's all right.
[ Page 1253 ]

C. Ehman: There might have to be some sharing.

R. Howard (Chair): You probably know you have 15 minutes. I'll give you a little hint around ten, and you can either take some questions, or you can have all 15 for yourself.

C. Ehman: Fantastic.

R. Howard (Chair): Welcome.

C. Ehman: Hello. My name is Carolyn Ehman. I am a recent graduate of the applied music program at Vancouver Community College. I'm also the chairperson of the Students Union of Vancouver Community College, which is Local 73 of the Canadian Federation of Students. I'd like to thank this committee for the opportunity to provide you with our recommendations for the B.C. budget on behalf of our 13,000 members.

Before I begin with our recommendations, I would like to highlight two hugely successful student programs: the tuition-fee-free adult basic education and the U-Pass B.C.

For many years Metro Vancouver post-secondary students called for a standardized and universal U-Pass program. Before last year students were using a highly regionalized and unsustainable funding model to determine their monthly transit costs. This meant that Vancouver Community College students, who are among the poorest in the province, were paying $81 a month to ride the exact same transit as UBC students, who paid only $23.50 a month. This financial inequality further entrenched already pronounced financial barriers for VCC students.

In an attempt to show the benefits of a standardized Metro Vancouver U-Pass, we surveyed 1,200 VCC and Douglas College students and asked them how they would spend the money if their monthly transit costs were reduced from $81 to $30 with a standardized U-Pass. The most popular answer we heard from students was food. Something as basic as food is the first budget priority of students when provided with the much-sought-after financial benefits of the $30-a-month standardized U-Pass.

The B.C. government's investment of $28 million for the U-Pass B.C. has meant that students now have the first truly universal and affordable U-Pass program in the country. As representative of over 150,000 students in British Columbia, the Canadian Federation of Students was proud to participate in the government's announcement of the U-Pass B.C. last June.

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Students campaigned for years for a U-Pass that includes everyone. Whether you're a Douglas College student or a Simon Fraser University student, we all receive the same great deal of $30 a month for a U-Pass. The universality and the affordability of the U-Pass B.C. is what makes this program so unique. The U-Pass B.C. is a forward-looking student program that is building a new transit generation.

Students talk a lot about how the U-Pass B.C. is good for our environment and even better for our budget, and I'd like to give you an example of what that actually means. I've asked a friend if I could tell you about her story and how the U-Pass B.C. has helped her family, and she agreed.

Charmaine Waters enrolled at Vancouver Community College to upgrade her high school education through another very important program funded by the BC government, the adult basic education. As a mother of three, her family struggles to make ends meet, but because adult basic education is free, she was able to get started with her upgrading.

Today Charmaine is a fourth-year nursing student at Vancouver Community College and is looking forward to soon realizing her dream of working as a nurse in British Columbia. With her husband looking for work and a kid heading into college, their family more than ever has to make every penny stretch.

With all these challenges, she was saying to me the other day that the only thing that wasn't a juggling act in her life right now is her U-Pass. The U-Pass means that now she knows she'll be able to get where she needs to go, whether it be class, work, the library or everywhere else students need to travel. The U-Pass has made it so much easier for her to get where she needs to go that her family has gotten rid of their car and are all using public transit.

Charmaine is just one of many stories about why the U-Pass B.C. is such an exciting program, and how tuition-fee-free adult basic education removes upfront financial barriers to accessing post-secondary education. The government is to be commended on these policies, and students look forward to continuing to work with the province to ensure that adult basic education and the U-Pass B.C. continue to meet the needs of students in our communities.

The remainder of our submission will focus on the benefits of investments in the B.C. post-secondary education system. Our members strongly believe that post-secondary education is an unparalleled means to achieve a far more fair and prosperous future for their families in the province.

It is for this reason that we are making the following budget recommendations: (1) a legislated reduction in tuition fees to the level they would have been had they increased only by the rate of inflation since 2000, and (2) establish a provincial system of upfront need-based student grants and the elimination of interest charged on the provincial portion of student loans.

Regarding our first recommendation, the legislated reduction in tuition fees, it's commonly said that aver-
[ Page 1254 ]
age tuition fees in B.C. are appropriate because they are below the average in Canada. The reality is that fee increases have radically outpaced the inflationary pressures so often cited as necessitating further increases, As these costs are off-loaded onto students and their families, the likelihood of their participation in and completion of post-secondary education is significantly reduced.

Students' anxiety around how they're going to finance their education has been clearly identified as the primary barrier to their access to post-secondary education, and 70 percent of those students facing barriers to post-secondary education cite financial issues as the cause. Debt aversion and inadequate cash flow have been found to be the first- and second-most important financial obstacles to students' persistence in their education.

These statements aren't simply our opinion. It is a fact that 80.9 percent of individuals from families earning over $100,000 per year attended post-secondary education in 2006, whereas only 58.5 percent of individuals from families earning less than $25,000 a year did. It is also a fact that the most recent VCC student census found that one in four VCC students had a family income of $20,000 a year or less.

One more fact, this one from the Ministry of Advanced Education and Labour Market Development. Their projections show that 76 percent of all job openings in 2017 will require post-secondary education. Jobs with this requirement are also growing twice as quickly as those without. Legislating a reduction of tuition fees to 2000 levels and adjusting for inflation would be a significant step towards eliminating low- and middle-income students' barriers to accessing and completing post-secondary education.

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Our recommendation No. 2 is to establish a provincial system of upfront, need-based student grants and eliminate interest charged on the provincial portion of student loans. The general Canadian student financial aid strategy deploys the majority of aid in loans but supplements those loans with upfront, needs-based grants and, to a lesser extent, loan remission, whereas in BC student financial aid is overwhelmingly provided as student loans, which provide students with access to post-secondary education but only by deferring upfront costs. Because B.C. lacks a provincial system of student grants, it provides the least upfront, non-repayable financial aid in the country — more than 70 percent below the national average.

Access to debt solves the issue of insufficient cash flow to meet costs but does not reduce the financial burden. Students who are not comfortable shouldering the burden due to other debts, expectations of modest incomes or simply a desire for financial security are not provided with greater access through loans.

Non-repayable aid in the form of a loan remission does not address this issue because instead of reducing the financial burden at the time that it is incurred, it offers debt-averse students an uncertain possibility of relief. In real terms, what that means is that students are debt-averse, and the more debt the student accumulates, the less likely they are to complete their education.

According to a study by the Canada Millennium Scholarship Foundation titled The Impact of Bursaries: Debt and Student Persistence in Post-Secondary Education, students who accumulate over $3,000 in loans per year are less likely to graduate than students who receive no aid at all. In fact, as student debt rises from $1,000 to $10,000 per year, completion rates plummet from 59 percent to 8 percent.

The elimination of interest on student loans is another way of reducing mounting debt for already debt-averse students considering delaying and stopping their education. The bottom line is that every financial aid dollar made available in such a way that does not facilitate access or completion is, in our opinion, a wasted dollar. It may be tempting to think that student loans and interest charges are cost-effective, but without a positive impact on post-secondary education outcomes, the return on investment is fiscally neutral and economically and socially negligible.

Upfront, need-based student grants and the elimination of interest on student loans are the optimal student financial aid because they are targeted to reduce the greatest financial burdens, are provided when financial need occurs and because they are transparent, allowing students to be sure of their financial position before incurring the costs of accessing post-secondary.

Grants improve access by directly addressing the issues of financial need and debt aversion. Students receiving a grant are provided with a means to meet costs when they are incurred and directly reduce the financial burden instead of deferring it as a debt to be repaid. Because students receiving grants do not carry a financial burden through their studies, they are less likely to drop out due to financial worry or to seek income. Students with the highest financial need who receive grants are almost five times as likely to graduate as those receiving loans.

It is true that grants, unlike loans, are not repaid. However, because grants promote successful completion of post-secondary programs, they provide greater returns associated with positive post-secondary education outcomes. An example of such a positive outcome is the fact that university graduates, which many VCC students aspire to be, make up to 22 percent of the population but contribute 41 percent of the income taxes paid and receive only 14 percent of government transfers. That is a great return on investment.
[ Page 1255 ]

R. Howard (Chair): Carolyn, just so you know, you're at about ten minutes.

C. Ehman: Okay, great.

A legislative reduction in tuition fees to 2000 levels, the establishment of a provincial system of upfront, needs-based student grants and the elimination of interest charged to the provincial portion of student loans are an investment in the intellectual capital necessary to build a stronger, more resilient economy as well as the kinds of economic and social opportunities necessary to meet the province's target to be the most literate region in North America.

I'd like to thank the committee again for the opportunity to make our submission and welcome any questions you may have.

R. Howard (Chair): Excellent. Thank you.

B. Bennett: Can you tell me more about that 70 percent number — that comparison of student aid in B.C. to the rest of the country? Just go over that one more time for me.

C. Ehman: Sure. The 70 percent below the national average on the student grants? Is that where you're…?

B. Bennett: Right. Is that sort of an all-in number, or is that strictly government assistance — grants/loans? I know we don't have grants, but is that what that is?

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C. Ehman: I believe that's all the provincial loans. Provincial and federal? Yeah.

B. Bennett: Where did you get that from — that number?

C. Ehman: That's from The Price of Knowledge: Access and Student Finance in Canada, fourth edition.

B. Bennett: Who puts that out?

C. Ehman: It could be the Millennium.

B. Bennett: Okay, good. Well, thank you very much.

B. Routley: Could you elaborate a bit on the issue of needs-based grants and how you would determine need in the case of designing a program to provide grants? Has there been any work done on that, or is that something that you would hope someone else would do?

C. Ehman: I personally haven't done any specific work into this. I don't know…. I know if a program was to be put together, students unions would love to be involved to work around those parameters. But as of right now, I don't have anything to tell you.

R. Howard (Chair): Excellent. Carolyn, thank you so much for taking the time to come out and present to us.

Next up we have Bob D'Eith.

Welcome, Bob. You've got 15 minutes. Around ten minutes I'll give you a little reminder, and you can either allow some time for questions or go all the way through if you'd like. It's up to you.

B. D'Eith: Great. Well, I'll try to hit ten minutes and leave time for questions if I can. I want to first say thank you very much to the committee for allowing me to speak to you. I think it's great that this is happening. I participated in the past with these Finance Committee prebudget meetings, and I've found them very helpful. So thank you.

My name is Bob D'Eith. I'm the executive director of Music B.C. Music B.C. is the provincial music industry association. We have approximately a thousand members, with over 5,000 people in our e-news database who are in the music industry. In basic terms, we help develop and promote music in the province — artists, professionals, companies in the province. I'm also the executive director of the Music B.C. Charitable Foundation, which focuses primarily on youth programs, instruments for schools, scholarships and songwriting workshops in B.C. schools.

To give you a bit of background on our relationship with the province, we've had a long-term relationship with the province in terms of programs. Unfortunately, in 2008 we were a victim of the round of cuts, and our core funding of $45,000 was cut in 2008 and has not been restored. Our travel assistance program, which helps touring artists, was cut in half to $50,000. We were very pleased that we were able to keep at least part of that program going. So we're very appreciative of that.

We did get some new funding. We're doing a trade mission to Los Angeles for music for film and television. As will come later in my discussion, we were also able to get matching funds from the federal government for that, so we have a $40,000 budget. Recently it was just announced that the provincial government is helping us with our charity instrument program.

We have appeared in front of the Finance Committee before, primarily in regard to arts and arts funding in British Columbia. I was very pleased when this committee recommended a number of times to restore arts funding to pre-2008 levels. Unfortunately, for whatever reason, the provincial government has not taken the recommendations of this committee in the past. I do hope that the committee does continue to recommend restoring and increasing arts funding. I also hope that the provincial government will listen to the committee.
[ Page 1256 ]

There are really two main points that I'd like to talk about today. One is about cross-sectoral digital entertainment. I know that's a big word, but basically we're talking about the new economy. A lot has been said about the creative economy and how that's driving the new world economy, how important creativity is. Creative industries really do provide a breeding ground for creativity and innovation in the larger economy and are critical to driving job creation for a technology-driven future.

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Examples of that worldwide. Mark Zuckerberg thought up Facebook. Now he's a multi-multi-billionaire. Locally Club Penguin, a Kelowna-based company, designed an on-line game for children which was subsequently bought by Disney, and Disney now has their operation for development of on-line gaming in Kelowna. They have a whole building there, so here's an idea of some local people that now has international significance.

Creative-based, idea-based — very important. We have strengths in British Columbia to do that. Our creative sector has actually shown 3 percent annual GDP growth from 2002 to 2007. And by 2007 the creative sector was about $4 billion. Right now it represents about 4 percent of the provincial workforce, which is higher than the combined employment of agriculture, forestry, fishing and hunting. So it's a growth industry. It's an important industry.

The creative industries are at a critical point in terms of growth. One of the interesting things about the B.C.-based companies is that we're young companies, so we're small and medium enterprises. In order to develop, they've had to develop across sectors. So B.C. is not only a place for traditional arts and culture. We have some of the best arts and culture in the world, but it's also a centre for the fast-growing and convergent digital media sectors.

We have an incredible film industry, an incredible book-publishing industry, a magazine industry, a flourishing music industry, all of which are growing by leaps and bounds. And they're all converging, and they're all working in cross-sectors. You'll find all sorts of different parts of the sectors working across different sectors.

But we are challenged. We're challenged by new business models. We're challenged on line — for example, in music, how free downloads have crippled the music industry but also opened up new avenues. In other provinces — for example, Ontario — they've actually created the OMDC, which is the Ontario Media Development Corporation, which actually deals specifically with this cross-sectoral digital media issue.

As a recommendation, in light of the enormous changes that are taking place as a result of recent technological developments and the role that the creative industries play as an economic driver in the province, Music B.C. recommends that the government open a discussion with the creative industries and, in particular, the digital media sectors, with the objective of creating a cross-sectoral development strategy.

Instead of piecemeal, we want to see a development strategy that deals with cross-sectoral. It's been incredibly successful in Ontario, and I think that B.C. is losing a great opportunity here.

That's my first point. My second point is really, generally, about how the B.C. government funding is catalytic in nature. What I mean by that is that it doesn't act in a vacuum. Provincial funding for arts and culture leads to matching funding. It leads to sponsorship. It leads to a growth of arts and culture.

Right now how does B.C. stack up? Well, recent studies based on StatsCan numbers show B.C. at the lowest spending in Canada on arts in all sectors of government. And as far as provincial spending…. The per-capita spend is $92 in Canada. B.C. is at $62, which, if you see the chart, where it shows B.C. at $62 and Newfoundland at $139…. We are, in some cases, at under half per-capita investment in arts and culture in the country.

It's really interesting that in fact, expenditures on culture across Canada have grown significantly — in 2008-2009 by 22 percent in the provinces. Even the Conservative federal government increased arts and culture funding by 4 percent. They understand that culture is an economic engine and not a drain on the economy. That's why we have to ask the question: why is it that British Columbia is standing out in the whole country in cutting arts and culture?

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One of the arguments that were made was that cuts to arts and culture are necessary because of the recession, because of exploding health care costs. We were told that if we fund arts and culture, children are going to die. There's no basis for that assumption. Funding for arts and culture is a fraction of the overall provincial budget. It's simply a question of policy. The British Columbia government should not compare industries that have completely different funding structures, different returns on investment and different needs.

The reality is that every dollar spent on culture brings more than a dollar back in tax revenues to the province, and every dollar that's cut has a cascading effect overall. We really have to try to just recognize that in fact, investment in culture enriches our society and drives the economy.

I just wanted to touch on a couple of things before I say my final recommendation. Non-profits and charities — how do we work? I think one thing that's being missed by a lot of these conversations is…. There's an erroneous assumption that non-profits take money and it's a drain. The reality, though, is that non-profits leverage every single penny they get.

There are four key areas. Core funding allows staff to…. Right now the policy is, actually, no core funding.
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We have no core funding. If you take that away, you rely entirely on volunteers. While volunteers are great, they have day jobs and can't focus, and we need to focus to make money.

But the biggest thing is leverage. If you put a dollar into the music industry, we turn it into ten. A good example of that was when we did the Juno Awards. The provincial government put $650,000 into the bid, and what did that do? That allowed us to go to the city of Vancouver and raise another $350,000, which allowed us to get the bid, which allowed us to go to all the sponsors, like WestJet, and raise $75,000, and to all our other corporate sponsors and raise over $10 million in economic impact to the province when we had the event here.

So what I'm talking about is leverage. It isn't money that's thrown down the toilet. It's money that is used and expanded upon.

I'll show you a little chart just to illustrate my point. If there's nominal funding, there's no matching funding. There's no private funding. If there's some funding, if it's piecemeal, then we get some return. But the reality is if we get full funding for arts and culture, we can get matching funding from the federal government. We can get corporate sponsorship. We can get municipal funding. That adds up to a lot more.

Finally, I just wanted to say that we recommend that the B.C. government increase funding to arts and culture to at least the Canadian average of $92 per capita to ensure that B.C. arts and culture organizations continue to flourish and are able to leverage B.C. public dollars. These funds should be used for operational needs as well as a balance between new and existing arts and culture programming.

That's it, so if you'd like to ask any questions. I tried to keep on time there.

R. Howard (Chair): Thanks, Bob. We've got a little bit of time left here.

D. Donaldson (Deputy Chair): Thanks for the presentation. A couple of questions. The $45,000 core funding that you lost — was that gaming grants? And were you able to participate in the gaming grants review process?

Secondly, another question, we heard from the Motion Picture Industry Association of B.C. earlier. They pointed out the number of jobs that are out there, the potential in post-production and sound. Would those be some of the kinds of jobs that your members would also be able to access?

B. D'Eith: Well, yeah, that's part of the cross-sectoral argument. I mean, when you have film and television hiring music for film and television post-production — composers — it's all part of a bigger picture. Now all of that is on line, so everything's converged. Saying "convergence" is past tense. Everything has converged.

So yes, we're all in this together. In fact, we're meeting all together — the CMPA and Music B.C. and the book publishers — because we realize that there are connections.

As part of your second question, gaming money, I've been asked to appear…. I am appearing tomorrow morning in front of the Gaming Commission. Thank you. We have never received any money from gaming, even though we've applied for 20 years.

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That's a whole other discussion. We have significant problems with gaming. We have significant problems with the process. We have significant problems with the fact that funding was cut from arts and culture and the province reneged on its promise to put 33 percent into non-profits. We're not getting that.

Even the money that is coming, we're not getting our fair share of. Because the criteria are so brutal, it makes it nearly impossible to get that money.

R. Howard (Chair): Excellent. Thank you, Bob.

Next up we have the B.C. Society for Public Education — Helesia Luke and Catherine Evans.

Welcome.

H. Luke: We're actually three today.

R. Howard (Chair): Ah, three. Okay.

Now, you probably know you've got 15 minutes. At about ten minutes I'll just let you know that you can either stop there for questions, or stop thereabouts for questions, or you can just take the whole 15 minutes — whatever you prefer.

H. Luke: I think we will give the presentation, which should not take 15 minutes — maybe about eight; you can time us to see — and then we'll open up for questions.

R. Howard (Chair): Okay. There'll be some room for questions.

C. Wong: First of all, we are glad to be able to come here and talk to all of you about the importance of an accessible, responsive and equitable public education system here in British Columbia.

We understand the recommendations you make are going to be a very critical part of the decision-making process about the allocation of our provincial resources. We are grateful to all of you for the time and effort you're spending listening to, engaging with and perhaps learning from groups, from us, throughout the province.

Let me introduce the British Columbia Society for Public Education. We were formed in early 2005 by a group of parents. We are very committed to promoting and advocating and improving public education in British Columbia.
[ Page 1258 ]

We are all volunteers. We rely on all of us to conduct our research and publish materials, providing clear, accurate and meaningful information to our students, parents, the general public and decision-makers like you, so you can make very good decisions about the public education system here in our province.

C. Evans: First of all, just let us reassure you that we are very aware that the province of British Columbia is spending more per pupil on education than it ever has in the past. This is something that we know is literally true. However, literal truths can hide a lot of other truth.

As a percentage of the provincial budget the funds spent on public education over the last 20 years have fallen from 26 percent of total spending in 1991, to roughly 20 percent in 2000, to 15 percent in 2009. What these numbers signify to us is a major shift in spending priorities, a shift that has cost the public school system and B.C.'s children hundreds of millions of dollars in lost opportunity, lost support and lost investment in their futures.

In December 2009 your committee made a number of recommendations related to K-to-12 funding. One of them was to work with boards of education to conduct a comprehensive review of the education funding formula. We encourage you to restate that recommendation. Reforming the funding formula is very necessary. It's not the only step that needs to take place, but the funding formula is quite broken.

We also ask you to take note of the fact that most British Columbians believe that our public education system is underfunded. A public opinion poll that we commissioned in the spring of 2010 revealed that 81 percent of British Columbians agree that the provincial government is not doing enough to protect public education, and 79 percent agreed, most of them strongly, that the provincial government needed to spend more on public education.

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You might be interested to know that around two-thirds of the respondents in our representative sample disagreed that you should spend any money on private schools. Again, most of them felt that way quite strongly.

H. Luke: As a final point, I'd like to draw your attention to a relatively small but potent symbol of the way we see the shift in funding priorities impacting public schools. Perhaps you've heard this already. You certainly have heard it on the news. While parents work hard as volunteers to raise funds and help keep school programs afloat, we pay fees on dozens of items deemed non-essential and spend our own money on basics such as Kleenex for classrooms.

Public schools are simultaneously being forced to pay nearly $5 million to the Pacific Carbon Trust to purchase carbon offset credits. We view this as a subsidy to fund private industry initiatives.

The absurdity of this policy, as you probably have followed on the news, is not lost on anyone, regardless of your political affiliations. Schools that desperately need those funds to actually reduce their carbon emissions, such as through the purchase of a new boiler or windows, are instead paying for carbon offsets. We view this as a fine which reduces their capacity to actually make a real difference in their carbon footprint.

In addition, schools have been shut out of the legislation, and schools that are leading the way in environmental responsibility receive no financial supports for their efforts. They can't sell credits onto the grid for the efforts that they do, and they are extensive in Vancouver alone.

My daughter's school runs the single largest composting unit in the city of Vancouver outside of a commercial facility. There's an intensive neighbourhood program to gather compost and garden, and the students hold a climate leadership conference every year. These are enormous efforts that go unrecognized, while their school is simultaneously fined.

So we definitely view parent fundraising, as well as fees charged to parents, as subsidizing public schools. Then our public schools are subsidizing private industry. In our view, both of those things should stop. Public schools are too important to the interests of society to be treated the way certain big retailers treat their suppliers. Lowering the quality of public education has consequences that far exceed whatever benefit comes from saving a few dollars in the short term.

As we have said over and over, we still have an enviable system of public education in our country. We hope that you will do your part to protect this valuable resource by recommending that funding for public schools be increased, and that's increased beyond what is necessary to maintain the status quo as we see it today, because we are looking at an erosion of ten years.

We need to shore up our funding for public schools. There's rebuilding to do. As well, we need to explore new and innovative approaches to learning and education. Anecdotally, we know that innovation doesn't happen when funding is in short supply. When pressure is on the schools, the effect on staff is less collaboration, not more. The two things go hand in hand. Your support is an important step in getting there.

On that, I will conclude and ask you if you have any questions for us.

R. Howard (Chair): Excellent. Thank you.

J. Thornthwaite: Thank you for your presentation. We did have — and we will likely have more — presentations from school boards, along our work. You had said that you want us to recommend the funding formula
[ Page 1259 ]
be changed. I'm wondering if you have in your minds a specific recommendation as to what that would be.

C. Evans: That's a fairly technical area. We're not going to solve that problem. I think that the people in the Ministry of Education have some alternatives, and I think that there are lots of examples, even around the country, that might work better than what we're doing here.

H. Luke: I think that definitely, if I can add to that, the funding formula needs to recognize that there are fixed costs that are not related to how many people are in a building. The costs of turning the lights on in a building remain the same whether there are 30 people or 300.

The funding formula right now just simply does not recognize those fixed costs. There's some built-in…. We can identify problems, but the policy solutions, I think, are collaborative, should be collaborative. That's another piece we would…. It's not included in here, but definitely, there's room for collaboration.

C. Wong: I would like to say that we are parents and we are volunteers. All we can see is that the funding formulas are not working. We have heard so many times from different school boards around the province that the present formulas are not working. They are facing deficits, and we have seen all the school boards cutting away programs, cutting away staff support. So all we can say is that it's not working and that we have to find a way to fund our schools so that they can support all our programs, all our staff and all our students' learning.

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D. Donaldson (Deputy Chair): Thanks very much for the presentation. My questions were on examples of how the current funding formula isn't working. You've given a few of those. Thank you for that, and point well taken on the Pacific Carbon Trust. We know that issue was brought forward, and it's a very important one.

D. Hayer: Thank you very much. It was a very good presentation. I appreciate you coming over and looking at the interests of the students.

I just have a question, looking at your paragraph where you talk about the percentages of the funding, comparing total budgets of British Columbia. I'm looking at the year 1991-92. It changed from 26.36 percent to 20.06 percent, which is about a 6 percent change in ten years. That was under the previous government. Then under our government, it went from 20 percent to 15.3 percent, so that was another change of 5 percent.

Do you have any numbers saying what the total population of students was versus the total population? Was there a shift in that, or was it almost the same in the year '91 and the years 2000 and 2009? If you have something that you can provide, I'd really appreciate it. Just to do the comparison. That way, we know, as a percentage of the population: has the budget stayed the same or not? Or maybe it got worse. Maybe there are more students as a percentage than there were in the years '90-91.

H. Luke: We don't have that direct correlation. What I can say in broad terms is that the population of British Columbia increased by almost 500,000 over the same period of time. So I would assume that a number of those are school-age children. I can't give you that direct correlation.

This data comes from several sources, and we can go back to the sources, if you'd like, as a follow-up. I can e-mail you that, perhaps.

D. Hayer: Sure. I'd really appreciate it if you can give us the total number of students versus the population in 1991, the year 2000 and the year 2009.

C. Evans: I think what you're asking about is whether declining enrolment accounts for this, and it doesn't. It doesn't.

D. Hayer: No, I'm just trying to get the numbers.

C. Evans: There is some declining enrolment, but it's not anywhere in the vicinity of those numbers.

R. Howard (Chair): Excellent. Well, thank all three of you for taking the time to come out and present to us today. Much appreciated.

C. Wong: We also want to thank all of you. We have given you our presentation. Does everyone have a copy? There's a contact there. There's a phone number and e-mail. Please contact us.

R. Howard (Chair): Next up we have Genome B.C. — Alan Winter and Suzanne Gill.

Welcome. Fifteen minutes. I'll give you a little hint around ten, and you can either take some questions around then or go all the way through.

A. Winter: Well, thank you, and also, thanks for this opportunity. Suzanne Gill is with me, and she's the director of corporate development. I think we've had the opportunity to meet individually with, probably, most of the members of the committee. But I thought we'd provide, still, a corporate overview and then focus on the finance side of this.

At the outset, I wanted to say how much we appreciate the support of the province, right from when Genome B.C. was founded in 2000, from both sides of the House. That is particularly true in tough economic times. In this past year we did receive $25 million of funding, which we very much appreciate, towards our 2010-2015 plan.
[ Page 1260 ]

In the presentation we handed out…. I'll go through it quickly and just focus on those areas that might give you the context of the finances.

At the bottom of page 1. We were founded, as I mentioned, in 2000. There was an initial plan of about $70 million. In those days the view was that it was 50 percent federal and 50 percent provincial. We struggled a little bit through that period because of the tough economic times.

In the second plan, 2005-2010, we took on the role of raising 25 percent of that total pot, asking the province upfront for 25 percent and then leveraging that whole in terms of cash, so not indirectly but in terms of cash, 4 to 1. So that was $300 million, of which the province was requested for $75 million. The result of that was that we came in at $316 million, still with the $75 million from the province.

We've initiated, then, the plan we're currently in, which is 2010-2015, for a $340 million program, and I explained the background to that.

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The top of page 2 is really putting this in context of how we have done for the period 2005-2010. As I mentioned, we exceeded the plan significantly, still with the provincial support, and we were the most successful province in Canada. We garnered over 26 percent — in fact, we're closer to 30 percent — of all available federal dollars in life sciences. It's not unexpected, because British Columbia is very strong in this particular area. In the last year, in fact, in the last competition we garnered 43 percent of all federal dollars in this particular area.

The Vancouver Board of Trade estimated around about 1,900 jobs over this five-year period — in other words, all through that period. We focused on the sectors that we felt to be really important in the province: health, obviously; but also agriculture; forestry; fisheries; mining; bioenergy; and environment.

The bottom of page 2 gives the model that I described, where we go out and raise, with these various projects in these sectors, contributions from industry and contributions internationally, as well — from international corporations or foundations.

The province gave us, in those days, three key principles, which we still adhere to, essentially — the first one being match those economic areas of concern, because this is important to the economic future of the province. The second is to leverage, in cash, those contributions of the province, and that's what we do, 4 to 1. The third is to make sure that the province is involved, not just in one university or one company but across the whole province, which we do.

The top of page 3 shows the various groups — and we've added to this since — who are involved in some of the key projects that we've done over this period of time. And the bottom of page 3 gives, essentially, the model that the Vancouver Board of Trade put together around Genome B.C. For that five-year plan, as an example, the province invested $75 million in cash. Then we leveraged that up to $300 million — actually, $316 million.

Interestingly enough, during that period of five years that the yellow box shows — the return to the province from the Vancouver Board of Trade study, which included B.C. Stats…. Essentially, what they showed was that the original provincial investment was returned in cash during that period of time.

Now, of course, we wouldn't have funded for that reason. The reason we funded is the right-hand box, which is the applications in these sectors, which I'll talk a little bit more about and, for example, companies that are involved now with Genome B.C. and which have spun off from some of the technology.

We have five companies which have now come out of some of this research, either from the people or the projects or the platforms here. So we're beginning to see that economic drive from molecular biology.

In 2007, the top of page 4, we changed the model a little bit to look very much specifically at the sectors. We went to the industry, government and academia and said: "Let's write a strategy in each of these sectors for genomics as it applies to health or as it applies to agriculture or whatever."

We took those strategies. We went out with those in terms of requests for proposals, and back came, if you like, projects. We then evaluated and funded some of those. The next few pages deal with some of the examples of those projects, which were then developed in response to challenges that were seen in those sectors.

For example, the bottom of page 4, the area of personalized medicine was something that was focused on by that group — the right treatment for the right patient at the right time. We have the capability of doing a lot of that now through understanding genomics or genetics at this molecular level — drugs that are safer for children or better outcomes for patients, etc.

I won't go through all the examples on top of page 5 in terms of cancer or working with the Centre for Disease Control in B.C. in terms of pandemics and so on.

Then in each of the other sectors — in agriculture; page 6, mining and environment; page 7, forestry and bioenergy. In fact, if you've followed the Cohen Commission, the scientists that have been funded are appearing in front of the Cohen Commission at various times, and it's interesting to see how science informs all sides of the debate in that particular area.

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Of course, at the top of page 8, society and ethics, that's really where we put effort into school programs and those sorts of things. So we worked with the Science Teachers Association all through the province, with Science World as they do their community days throughout the province.
[ Page 1261 ]

The Year of Science in the last year was really important to us because it brought together all these various organizations, I think up to 200, which had worked in the area of science with children, particularly to focus in this particular area.

The bottom of page 8 then talks more about the future. So the future…. We've mentioned the first plan and the second plan, but in the third plan we're into now, 2010-2015, we believe we can bring into the province $340 million, or about $70 million — a little bit less than that — per year with an investment from the province which we then leverage up.

We've really appreciated the $75 million already contributed to that plan over this last couple of years.

The top of page 9 shows the process that we've gone through in terms of investment in this area of genomics. The Human Genome Project was a big project. It got a lot of people interested in the year 2000 and beyond as to the potential in this area, and we really wanted to build that foundation with Canadian scientists — particularly in British Columbia, of course.

The second plan, which was then 2005-2010, was getting those projects onto the international stage. So it was really getting these significant-sized projects in cancer or in different areas — pandemics or in agriculture or whatever — to be recognized. Because then the third plan, which we're into now, is essentially focused on applications in those sectors where we're asking for investment from others — the federal government, obviously, but also companies and foundations that want to contribute in this particular area.

If we're successful at that, then we believe that in terms of economic development we can look at these areas in terms of raising private money in addition to public money to put into products or services required for these sectors. That's the long-term view.

The bottom of page 9 shows the shift in our projects, if you like, or program from what we've really been doing, as I mentioned, in the first ten years of our life to focus on this big, large-scale science and try and bring it into applications in each sector and then, in those applications, translate those applications into end use. Whether that end use is within government — for example, in forestry — or in agriculture in terms of companies or whatever, try and get that into the system.

The top of page 10 really deals…. Over this past year, as an example, to give you an update, we've focused particularly around where the federal government put money in their budget into forestry and environment, and we competed for that.

With the province's investment, with your investment in Genome B.C. that you've made, it's paying dividends. In fact, in that particular competition, we won 43 percent of all federal dollars. We had eight out of 16 projects which were awarded by the federal government and through Genome Canada in B.C., through Genome B.C., with B.C. scientists, etc.

A second example is in personalized medicine. We launched a program with the health authorities, and we appreciated the fact that the health authorities came in on this. In three areas that they were involved in choosing, which we mention here — in the areas of cancer, of adverse drug reactions and of transplant rejection — they believe these projects will lead to significant results in the health system.

The third was really an area that we've put a significant amount of investment into in applied health research, which has gone to identifying root causes of childhood diseases; to the human microbiome, which really deals with the intestinal part of issues that we might have; and to brain research. All of those were applications that were being funded.

The outcomes of this plan, this $340 million plan, are really in these three areas that the government laid out to us in 2005.

First of all, make sure that it's in sectors that will help drive the economic part of B.C. and give the companies and the governments, to some extent, competitive edge so that they understand the best research in the world that's going on in what we should plant next in mountain pine beetle, how we manage the wild fish resources, or whatever it is.

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We have to be able to provide that information at the request of the end users in that area, and that does mean additional jobs in B.C., and it's really important for us.

The second is building capability, and it's too late sometimes when we're hit with things to invest then. We have to try to think of that stuff ahead of time. With SARS, we could never have sequenced the SARS virus if we hadn't invested for nearly three years in the Genome Sciences Centre part of the Cancer Agency.

In terms of leverage, we still are very keen to make sure that every dollar that the province gives us, particularly in these tough economic times, is leveraged in this 4-to-1 area.

In summary, we appreciate the support of the province. It's been spectacular in, as I mentioned here, we did receive $15 million towards this plan in 2008, which we appreciated. It got us started. The $25 million which we receive this year will expand our applications, as I mentioned, in health and other sectors.

We realize this is a tough economic time, and we look forward to working with the government on the timing and disposition of the remaining $10 million request required to secure benefits and those benefits really helping to build B.C.'s economic future.

R. Howard (Chair): Excellent. Thank you. We have a question.
[ Page 1262 ]

D. Donaldson (Deputy Chair): Hi. Thanks for the presentation once again. Congratulations on your leveraging — successful history. Well done. The applied results I'm very interested in, especially mining and agriculture, wild salmon stocks — those important topics for rural areas especially and a revenue generator for the province.

My question is around…. On page 9 can you elaborate a little bit about the model of going from large-scale research to applied research to private companies? For instance, right now do you…? The way that you're focusing on applied research, is that by taking the public investment that Genome B.C. is able to acquire and investing it in private applied research? And you mentioned five companies. Maybe you could just talk a bit more about that.

A. Winter: Sure. Now, what we do is that for every project that we want to approve, we go out and get investment, and part of that is the province's investment. When the federal government has money available, we'll ask them for money, and we'll ask industry for money, as well, if that makes sense in a particular area, so it's contribution, too, if you like. It's contribution to our various projects.

This is then spent in institutions. So this is in the various universities and so on. We would like in the next plan…. So if you look at the top number of that, we'd like, as well, to be able to fund at some point companies but on a shared basis. That's where we would like to get to, but we're not there at this stage.

When I mentioned five companies, it was on the benefit side. It was five companies who have already spun out because they have had technology or people from the investment that we've made. So, to give you an example, Boreal Genomics, which I think today has about 40 or 50 people, is started by a university professor, who was director of our technology development program and sees an opportunity, with some of the intellectual property that he has licensed from UBC, to go into an area really of genomics that is trying to concentrate DNA for forensics and those sorts of things.

So it's that continuum.

R. Howard (Chair): Excellent. Well, we've run you out of time. So just, you know, ever so briefly from what you do in the partnerships to reaching out to the next wave of scientists to the great work you do, I say thank you. It's a great success story, I think, and I'm excited about your future.

A. Winter: Thank you very much and to the committee for listening to us again.

R. Howard (Chair): Next up we have the Federation of Community Social Services of B.C. — Dr. Jennifer Charlesworth. Welcome.

Doctor, as you may know, you've got 15 minutes. If you want, I'll give you a hint around ten…

[1815]

J. Charlesworth: That would be wonderful.

R. Howard (Chair): …then you can either allow for some questions or just go all the way through — up to you.

J. Charlesworth: Okay, that's great. No, I look forward to the questions, actually.

First of all, thank you very much for the opportunity to present some information and some suggestions for you today. To give you a little bit of context, I am the executive director of the Federation of Community Social Services of B.C. I've worked personally in the field for 34 years in a variety of contexts, including academic, philanthropic, the community sector and in government.

I come to this conversation with you for the fourth year in a row with continued passion and commitment to see what we can do to improve social care in British Columbia, and I also come with some practical experience and suggestions.

Today I'd like to provide you with a brief orientation to the federation and, most importantly, to the work that's done in community social care agencies. I'm sure many of you are familiar, but there are just a few things I wanted to point out. Then what I'd like to do is just propose three concrete actions, and then I hope we have an opportunity for some conversation.

The federation is 30 years old. We've served as a provincial umbrella organization serving community-based social care organizations, and our primary purpose is to promote and encourage high quality community social care. Our focus is primarily vulnerable children, youth and adults.

We have 136 member organizations and agencies, and we provide services throughout the lifespan, from prenatal care to vulnerable moms, right through to end of life, senior support services, housing supports, counselling supports, etc. We're actually the largest provincial organization of its kind, serving this population of agencies.

The work that is done by those agencies is valuable no matter what metrics you choose to use. Depending on where we come from, we might be looking at things like what the public thinks. A public opinion poll conducted last year by Vision Critical, Angus Reid, said British Columbians highly value community social services and said 90 percent of British Columbians agree that community social services make their communities safer, a better place to live, and preventive services reduced the societal burden of family breakdown and crisis intervention.
[ Page 1263 ]

British Columbians feel the level of funding for community social services is too low. They're concerned about the level of funding for a number of areas of service and practice, and they think that they don't want to see further erosion. Some of the questions that were being posed in this review of the financial options and budgetary considerations suggest that we have to think about health care and education. Many people are concerned that social care is not in that equation.

So 70 percent of citizens will use community social care services at some point in their life. This is not something that is discretionary or optional. It's critically important to people's well-being. Many of us, if we think of our families or our own personal experiences, have tapped into social care, whether we're talking about daycare or supportive child care or we're talking about counselling through difficult transitions in our family or we're talking about supports for our elderly parents.

Another metric is community reach and influence. Our member agencies are in 150 BC communities, and as I said, many people are going to be touched by the social care system. The other thing that's interesting is that it's not just people like me that are engaged in the social care system. We've got thousands of active board members. In my organization alone we have 4,200 volunteer FTEs that are contributing to the development of social care in our communities. This is something that leverages and touches many, many people in our society.

Employment. You may be interested to know that our sector actually employs 65,000 people. That's more than mining, fishing and forestry combined. It's a significant generator of income.

The other thing that's important from a labour force development point of view is 90 percent of our practitioners have some post-secondary diploma or degree. This is a high-value, high…. These are career jobs. These are not short-term service jobs; these are long-term jobs.

From an economics point of view, there is $450 million in community investment from my 136 member organizations. That's a lot of money. A lot of that's government money, but not all of it. This is a high-touch industry, so 80 percent of that money is going into people's pockets for wages and benefits. Because it's a relatively low-wage sector, they're spending their money in community. So from that point of view, this is a very important industry.

[1820]

The other metric is around leveraging investments, and I'll get to return on investment in a minute. Here we've got funds coming from government — supports important work. It's been vitally important to have government support, obviously, but 20 percent of the funding for these agencies comes from community contributions, fee-for-service and social enterprise. So the government dollar is being enhanced by these other aspects. We're actually a very innovative and creative sector and have had to be because we know that the status quo is not an option.

From a return-on-investment point of view, the old adage about an ounce of prevention is worth a pound of cure is a cliché, but it's also true. To give you an example, a cost-benefit analysis out of the U.S. — a very, very robust research study — points to long-term savings and gains from early intervention and supports to vulnerable kids.

For example, the cumulative economic return to society of the U.S.-based Perry Preschool project for the Head Start programs was totalled at $258,000 per participant on an initial investment of $15,000. So that's a $17 return for every dollar invested. To break that down a little bit, where is that return coming from? The public return — 88 percent came from crime savings, 4 percent from education, 7 percent from increased taxes based on higher earnings and 1 percent from welfare savings. So that's interesting.

Now, that's a U.S. context, but in the Canadian context you see some similar data — a little bit more in terms of tax contributions and from other pro-social things that are about community inclusion, community participation and giving back to community. So those are some of the metrics, and I hope that helps to frame the value.

There are three requests I have. I know that this committee did this last year in your report, and I want to applaud that. The first one is to shift our language from talking about health and education to health, education and social care, as they are interdependent. Clearly, we all know what health services look like. We all know what education services look like. Social care — people had a fuzzier interpretation. But if we begin to talk about health, education and social care, it raises people's consciousness and awareness.

What do we know? When people start to change their language, awareness builds and behaviour changes. So this will open up the possibility of conversation at the community level about what we stand for from our community social care infrastructure. As long as we keep talking about health and education, we're missing the third leg on the stool. If we don't have a robust social care infrastructure, then we have lower school completion, and we have higher health care costs later on. The data is very compelling, and I'll get to that in a minute.

The second request for you is to look for the evidence and do more of what makes a positive difference. Here I want to point out the social determinants of health. We believe it is a touchstone for considering and evaluating where to allocate our precious public resources. We're using it increasingly in the federation.

I just came back from a very lively conversation with our board around social policy frameworks and what the evidence is in support of doing this versus that. We're coming back to the social determinants of health.
[ Page 1264 ]

The federation is turning 30, and 30 years ago, when we started, Marc Lalonde came out with his report. "Health Care for All," I believe it was. He was the federal Health Minister of the day, and that report presented evidence of key factors that determine health status.

The report went on to say that to improve the health of Canadians, we need to improve access to the key factors like income, education and community supports. Since then the evidence has mounted about how these things help us be healthy. These are called the social determinants of health. There are 11 of them. They determine our health, the health of the people that we care about and the health of our community.

Most significantly, if you follow the line on this, investments in the social determinants of health…. By the way, of those 11, only one is actually about a health care system. The other ten deal with a whole range of things pertaining to healthy child development — for example, social networks and social cohesion; income; education and literacy; employment and working conditions.

[1825]

Basically, the message is that we've got a health care system that's focussing very much on the health care service delivery — more within acute or chronic care conditions — and what we're missing is 75 percent of what's contributing to poor health status. So we have to shift the balance. If we're going to address the health care costs — what we call the Pac-Man of the budget — then we need to start thinking out of the box and move to looking at the social determinants of health.

A little example: 29 percent of B.C. kids arrive at kindergarten developmentally vulnerable, which could cost B.C. 20 percent in GDP growth. If we don't address some of these things, the evidence points to those young children, as they grow up, being more likely to need more intensive supports, more costly supports, having antisocial behaviour and, consequently, being involved in the justice system.

The third thing I'd like to say, and I'll stop it there, is: work with us and encourage and support innovation. I've had the pleasure of sitting on the B.C. Council on Social Entrepreneurship, which is a new council that the government has formed. Very interesting collaboration. What I'm learning from this is…. Of course we've known that status quo is not an option, but we do need to start thinking about how we introduce innovation, entrepreneurship and enterprise. That can be used for good or ill, I might add.

What's really important are the lessons being learned around how you engage differently in community and the conversations. My sector and the federation are eager for the conversations about what we're going to do differently in order to use our precious resources wisely and effect change in the health outcomes and in the social outcomes for citizens of B.C.

So those are my three things. Thank you very much, and I welcome questions.

D. Donaldson (Deputy Chair): Thanks for the presentation, again. It's very informative. The social determinants of health is something that we know in northern communities very well.

The question I have pertains more to the end of your presentation. Are organizations within your federation ready or have the capacity to undertake social enterprises to the extent of…?

We spend $4 billion in this province on procurement of goods and services for government. I put it to the Finance Minister last year that we could hopefully target some social criteria in the distribution of those dollars so that they would support, for instance, organizations that belong to your federation, and therefore they can use the profit from that to deliver the services in a better manner because of the constraints on budget. So yeah, just a little bit on that.

J. Charlesworth: In terms of capacity — absolutely. It's interesting that you raise that, because we've done a concerted effort over the last year and a half to raise understanding and awareness and to educate our members around the whole array of possibilities around social innovation, so absolutely there's readiness — not across the board, but certainly a receptivity to it. I think there's a lot more that we can do on that. Again, it's going to require some front end, like: "How do we figure this one out? What could it look like?"

They're not all successful, and it's certainly not the magic bullet. But when you speak to procurement policies, for example, there'd be some real opportunities there. There are also some things that are in our legislation that are getting in the way of some creative and innovative approaches. We're talking with the Ministry of Children and Family Development right now around some of the business practices and procurement and the unintended things in legislation, regulation and policy that prevent some of the innovation.

So the short answer is yes. It won't happen overnight, and it's not the magic bullet, but it's certainly part of a puzzle that we can start to build together that would address some of these challenges.

R. Howard (Chair): One minute left, one more question.

B. Routley: I just wondered if you could give me…. Do you have a list available that you can share with the committee of all of the partners that are part of your group?

J. Charlesworth: Absolutely.
[ Page 1265 ]

B. Routley: You talked about seniors. What would be some of the seniors groups that we might see in our communities that are under your umbrella, so to speak?

J. Charlesworth: Well, a lot of our organizations are what we would call multi-service organizations — so the cradle to grave.

[1830]

There would be things like Pacific Community Resources Society or Family Services of Greater Vancouver or NOW Canada up in Kamloops that are providing services across the age spectrum, inclusive of seniors services.

There are a number of them that are now moving into the social housing and supported housing for seniors as well, so there has been a significant growth there. But I'll absolutely make sure I get the list of member organizations for you.

R. Howard (Chair): Will we get a copy of your presentation?

J. Charlesworth: Yes, and the report will actually come with more of the data. There are a lot of things that I could add to that, but I think it's really important to be thinking about the evidence and how we make those difficult decisions. The report will include some of that as well.

R. Howard (Chair): Excellent, Doctor. Thank you very much for taking the time to present to us today.

We now have the Association of Book Publishers of B.C. — Margaret Reynolds and Robert Ballantyne.

Welcome. As you're getting set up, you probably know you've got 15 minutes. At about ten minutes I'll give you a little heads-up, and you can either figure out when you want to stop for questions, or you can go all the way through. Your choice.

M. Reynolds: Anytime? Are we ready?

R. Howard (Chair): It's yours to go, yeah.

M. Reynolds: Okay. I'm Margaret Reynolds. I'm the executive director of the Association of Book Publishers of B.C., and this is Robert Ballantyne. He's our president, and he's also with Arsenal Pulp Press.

I wanted, first, to introduce our community, a community of book publishers in the province. We're the largest English-language group of publishers in the country — outside of Toronto, of course, outside of Ontario. We produce $150 million worth of sales of books internationally, nationally and, of course, provincially.

Our publishers are based in most regions of the province, and if we don't have publishers based in regions, they're serving those regions through the books that we publish.

I'm going to set out the three recommendations that we'd like to make to the standing committee. Thank you very much for giving us the opportunity to do that. Then we'll look at them a little bit more closely, and Robert will give you some examples from the publisher's perspective and not from the overall policy perspective.

The three recommendations. The most important one for us is the renewal of the book-publishing tax credit, which is up for renewal in April 2012.

The second is an increase in stable funding for the B.C. Arts Council.

The third has no monetary attachment to it but is, I think, going to be more and more crucial, and that is to engage the creative industries in a discussion around how we can work with the government to maximize the opportunities that are being presented in the new environment.

Book publishing right now is in an extremely…. Well, you must know this. Digital is everywhere. It's a transitional moment for us. There's never been as much change in the book-publishing industry since Gutenberg. This is huge for us. We're facing digital.

We're also facing a very difficult retail environment with the merger, many years ago now, of Chapters and Indigo and the kinds of policies that the chain imposes on the book-publishing industry, which makes it more and more expensive for us to work in that environment and therefore less and less able to retain capital.

Publishers now must work not just in print, through traditional bookstores, but also in e-book and web-based technologies to meet the demands of the consumers.

The business model isn't working yet. It's brand-new; it is not working. Amazon has driven down the prices of books, and there is not enough money, with those low prices, to make the business model work.

Publishers are also trying to carry on two businesses at once. We're still producing our print books, and we don't anticipate that that's going to change anytime soon. But we also have a completely new distribution stream, which is the e-book stream.

While there are things that we have to do for both that are in common — acquire manuscripts, produce them, design them and distribute them — the methods of distribution and the methods of production are both completely different, so you can imagine the kind of pressure that puts on our industry.

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I'm going to ask Robert to speak to some of the direct impacts right now on the industry in this situation.
[ Page 1266 ]

R. Ballantyne: The basic bottom line, to reiterate, is that the revenue stream that's been diminished by the rise of e-books is not made up in the revenue stream coming from e-books. The large-format chain stores — Chapters, in particular — have decreased the amount of books they are selling disproportionate to the amount of e-books that are being sold.

We are digitizing very rapidly. We're ahead of most small publishers. My company, in particular, has five employees. But there's a learning curve involved for our small companies. We are keeping up. We're exploring all the avenues. We have about three-quarters of our entire backlist and frontlist digitized and available for sale.

We explore all the major retail streams that are open to us. We're seeing a growth in it, but as I mentioned, the gap is significant right now — what we've lost in terms of….

People's interest in books is somewhere caught up in the technology now. They're spending a fortune on technology, and that's money out of the book market. The people that are making a lot of money, of course, are Apple and Amazon right now.

We're optimistic that down the road it is going to work itself out. We'll have revenue models that are effective for us. We'll go on producing really important and interesting and valuable assets to cultural communities.

M. Reynolds: The government has played a key role in supporting book publishers for obvious cultural and economic reasons. We want to thank all provincial governments who participated in putting together programs that support our industry.

The book-publishing tax credit was put in place in 2003. It was renewed in 2007, and as I said earlier, it's up for renewal again in 2012. It has been an enormous boon to our industry.

As I mentioned, we have very small opportunities to capitalize our industry. The book-publishing tax credit allows us to invest in the key things that our industry needs: producing product — i.e., books; marketing to export and domestic markets; and also retaining capital to invest — currently, as Robert just said, largely in technology at this point.

The B.C. Arts Council is a complementary program. It's been around since 1988, I believe, in terms of publishing support. Its role is to support the production of cultural books. We're not talking self-help books or gardening books. We're talking about literature non-fiction, creative non-fiction — those kinds of books.

The support that the B.C. Arts Council gives to our publishers makes it possible for them to decide to publish a book that they wouldn't otherwise be able to do, just to place it into the market. It's really important that the B.C. Arts Council be funded properly so that they can achieve their strategic plan.

Robert, do you want to speak to how those actually work for you?

R. Ballantyne: I would say that, for instance…. As Margaret says, the titles that we don't see as major revenue generators are usually the literary ones. They're often the ones that win awards. In fact, we just heard today that one of the books that is a perfect example of a book that may not have been published without this kind of support is nominated as a finalist for the city of Vancouver book prize.

Many of the publishers in this community win awards, both nationally and provincially, for the kinds of books that the B.C. Arts Council helps pay for.

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There the difference might be between selling 2,000 copies over three or four years of a book versus a cookbook — which my company also publishes, benefiting more from the tax credit for those titles — which might sell 50,000 copies over ten years and help us really move along and keep us as a buoyant company.

The publishers that benefit from the tax credit compete with the multinationals, as I mentioned, for these kinds of awards. For instance, with the city book prize finalists, there are three B.C.-owned book publishers. HarperCollins is a fourth. So that's the kind of population of awards that you're seeing.

They're just the kinds of books that are taught in schools, for instance, that find themselves in the courses eventually. They're essential to the kind of literary publishing that is at our core, but we have, as I mentioned, a multifaceted approach to publishing. We try to diversify a little so that nothing is crushed if something fails.

M. Reynolds: I want to make one more point, and then we're ready to take questions, I think. The last recommendation we had was…. We've been working together with other members of the cultural industries, creative industries, particularly film and television, sound recording and magazine publishers. There are going to be, or are already, huge opportunities, I think, for cross-sectoral activity within those industries.

For example, two years ago we partnered with B.C. Film to do a conference that would introduce publishers to film producers. We don't know each other. It's quite remarkable. We really don't know each other. We both have products that can be made. We have stories that are in book form that can be told in film. There are opportunities for those kinds of synergies.

Now that we're in an utterly digital world, those synergies are even more ripe to be exploited, so we're sitting down with the cultural industries and talking about ways that we might work together. We would be very happy if the government participated in those discussions with us.
[ Page 1267 ]

So I think that's all we wanted to present.

R. Howard (Chair): Excellent. We have a few questions.

B. Ralston: I just want to understand the tax credit a little bit better. You set it out on page 8 and also on page 14. It's administered by the CRA through the corporate filing of the book-publishing company. Can you just explain: what are the eligible expenditures that attract the credit?

Secondly, you mention Ontario. Once again, somewhat like film, it's more expansive. Are you also asking that that be considered, or do you just want the continuation of the credit as is?

Thirdly, is digital publishing at present eligible for the B.C. credit?

M. Reynolds: The tax credit is not…. There are not eligible activities in the sense that, say, the Ontario tax credit operates on. I think theirs is based on printing in Ontario. We don't have a print industry here that can deal with books, so it would be inappropriate for those kinds of expenditures to be considered.

The way that it works here…. It's been highly praised across the country because of its utter simplicity. It costs nothing, practically, to administer it. That is because it's attached to the Canada book fund, which is in the Department of Canadian Heritage federally.

If a publisher is eligible for the Canada book fund, they are also eligible for the tax credit. The amount of money that they get for eligible titles under the Canada book fund…. We get 90 percent under the tax credit. That's how it works.

So it's a two-pager, I understand. It's very simple to administer. It doesn't require publishers or the government to do massive amounts of work in terms of documenting all of that, because the federal government takes care of all the eligibility criteria.

Does that answer your question?

B. Ralston: It looks like last year it was a $2 million expenditure. So is that roughly where it's been at?

M. Reynolds: It's been, I think, between $1.6 million and $2 million.

[1845]

D. Hayer: Actually, I was going to ask the same question Bruce had — the amount of money you're looking for.

Book publishing is sort of dear to my heart, because my father was involved in publishing in the '70s and '80s. He published mostly South Asian and Punjabi books, and then also some original books he published here. Then in '98 he was assassinated, so after that we didn't do any more publishing.

But when some of the Indo-Canadian writers publish books, sometimes they go outside, to India, but the quality is not the same. Some of the persons from here who've written the books and published here…. The quality is much, much better. But then they have the high prices. They're much more expensive too, so I would like to see industries here in British Columbia and successful.

How long would this be for? A five-year term?

M. Reynolds: The tax credit has been renewed in the past for five years.

D. Hayer: Five years' time.

M. Reynolds: Yeah. It would be nice if it would be renewed indefinitely.

D. Hayer: So you're looking at around $10 million, approximately, over five years.

M. Reynolds: Yes, that would be right.

R. Howard (Chair): We're out of time, but we're ahead of schedule, so for the next two minutes we'll…. One last question to MLA Donaldson.

D. Donaldson (Deputy Chair): Thank you for your perseverance and work in the publishing industry — a hard row to hoe.

M. Reynolds: Yes. It's interesting, though.

D. Donaldson (Deputy Chair): Yeah, never a dull moment.

My question is around the B.C. Arts Council. I didn't see any numbers. Can you give an idea of the level of support that has been dedicated in the past to the book publishing you describe in the text here versus what's currently available now through the B.C. Arts Council?

M. Reynolds: The B.C. Arts Council funding is about $500,000 for the industry, and it hasn't really changed since 1988. The industry is sort of title-based. The industry is producing more than twice that many books in that period of time. So the amount of money that we're getting, support per title, has been seriously eroded over those years. That's the extent of the publishing funds from the B.C. Arts Council.

There are other…. Our association gets a small amount of money. B.C. BookWorld, which supports the promotion of books in B.C., also gets a small amount of money. But I should also add that in the last year, with the cuts, all of those dollars were reduced in each sector as well.
[ Page 1268 ]

Well, I think for anybody, not just…. I was going to say that, particularly for businesses, when you rely on that funding coming through, to have it jeopardized during the year makes it very difficult for people to operate, but we were very happy it came back.

R. Ballantyne: People have almost no credit lines in book publishing.

M. Reynolds: Right. Every dollar counts.

R. Ballantyne: So everything is in jeopardy sometimes.

R. Howard (Chair): Thank you, Robert, and thank you, Margaret, for taking the time to come and present to us this evening.

R. Ballantyne: Thank you very much for having us.

R. Howard (Chair): One last little bit of business. The copies of the budget consultation paper will be mailed to your offices tomorrow.

With that, we'll adjourn, and we'll reconvene up in Fort Nelson on Monday.

The committee adjourned at 6:49 p.m.

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