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

Wednesday, September 21, 2011

9 a.m.

Room 106, Pioneer Complex

351 Hodgson Rd., Williams Lake, B.C.

Present: Rob Howard, MLA (Chair); Doug Donaldson, MLA (Deputy Chair); Bill Bennett, MLA; Mable Elmore, MLA; Pat Pimm, MLA; Bill Routley, MLA; Jane Thornthwaite, MLA

Unavoidably Absent: Dave S. Hayer, MLA; Bruce Ralston, MLA; Dr. Moira Stilwell, MLA

1. The Chair called the Committee to order at 8:59 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 10:37 a.m. to 10:56 a.m.

5. The Committee adjourned to the call of the Chair at 11:41 a.m.

The following electronic version is for informational purposes only.

The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

select standing committee on
Finance and Government Services

Wednesday, September 21, 2011

Issue No. 47

ISSN 1499-4178

[ Page 1353 ]

WEDNESDAY, SEPTEMBER 21, 2011

The committee met at 8:59 a.m.

[R. Howard in the chair.]

R. Howard (Chair): Good morning, everyone. I'm Rob Howard, MLA for Richmond Centre and the Chair of this parliamentary committee. I'd like to welcome everyone and thank you for taking the 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.

[0900]

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. There are well-published global economic challenges in Europe and the States, and what we are seeing is that governments who have not been fiscally responsible are being punished. In B.C. we've maintained our triple-A credit rating and are committed to balancing our budget in fiscal 2013-2014. That will serve us well to protect and grow our job base.

These challenging circumstances mean there are difficult questions ahead, and we look forward to hearing about your priorities in these challenging times — questions such as: how can we maintain B.C. as a preferred destination for investment; with current fiscal challenges, what measure can government take to help families; and what programs and spending are your priorities?

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

Last week in Vancouver; earlier this week we were in Fort Nelson; yesterday in Smithers and Prince George; today, Williams Lake and Kamloops; tomorrow, Courtenay before returning to Victoria. In the weeks that follow we will be in Surrey, Chilliwack, Cranbrook, Kelowna and Richmond.

In addition to public hearings, there are a variety of other ways that British Columbians can share their ideas with us. We accept written submissions by letter or e-mail and also by 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. The deadline for 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. 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 this 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, also on the committee's website. This enables interested listeners to hear the proceedings as they occur. An archived copy of the audio broadcast will be retained on the committee's website.

I'll now ask members of the Finance Committee to introduce themselves.

B. Routley: Bill Routley, MLA for the Cowichan Valley and deputy Forests critic.

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

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

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

D. Donaldson (Deputy Chair): Good morning. Doug Donaldson, MLA, Stikine. I live in Hazelton, and I'm Deputy Chair of this Finance Committee.

R. Howard (Chair): MLA Bennett had to step out just for a minute to take an important call, but he'll be joining us in a minute. I know that your local MLA, Donna Barnett, is also here. I think she just stepped out for a minute. So we'll acknowledge her when she comes back in.

Also joining us today, I'm pleased to introduce our Clerk, Susan Sourial. We have Arlene Carlson at the back of the room, staffing the registration desk. We have Hansard Services staff, Michael Baer and Monique
[ Page 1354 ]
Goffinet Miller, who will record and prepare a written transcript of this meeting.

With that, I'd like to call our first witness. I guess we're still missing our first witness, so we'll go to our second witness first, Mr. Bill Carruthers.

B. Carruthers: Gee, I wasn't planning on being first.

R. Howard (Chair): The pressure's on. Welcome, Bill. So as you've heard, you've got 15 minutes. At about ten minutes I'll give you a little heads-up, and you can either stop for questions or go straight through — your choice.

[0905]

Presentations

B. Carruthers: Very short and to the point.

Hello, and thank you for the opportunity to make this presentation. I am a certified financial planner, now retired. Formerly I did a lot of retirement planning for clients. Lately, as a part-time opportunity, I've been doing debt counselling and settlement negotiation with creditors for clients.

There is a tremendous amount of people in this province who are swimming in debt with limited resources to solve the problem. They are living from paycheque to paycheque, if they have a job. My clients range from a 65-year-old lady who has worked all of her life and is $100,000 in debt. My youngest client is a 25-year-old single father. When he was with the mother of the children, he got into financial trouble, and we're trying to work this out with his creditors. That's just a little bit of my background and what I do. Enough of that.

What I want to emphasize…. With regards to the upcoming budget, we recognize that, like individuals, pressure will be applied to fund many initiatives. Many of them are probably very worthy, but the bottom line is the cost of running deficits is not good fiscal management. We must focus on creating real revenue or do the adjustments necessary to keep costs at or below the level of revenue that is available to us. Deficit financing is a slow boat to bankruptcy. Look at the country of Greece. Many countries in Europe and our neighbour to the south are having to face up to the fact there is no free lunch.

How many of you, regardless of what party you belong to, want to be the one who has to tell the public sector employees and the public in general that there are going to be severe cutbacks in levels of service, etc.? Look at the public's reaction to the introduction of the HST.

What government can do, along with the cost of doing business, is be strategic in allocating funding that will help the province prosper financially. Despite the current unemployment rate, we are always short of heavy-duty mechanics, millwrights and industrial electricians. There are probably other skilled trades that should be mentioned, but these are good examples. What government needs to do is make sure that post-secondary opportunities are readily available throughout the province so that the barriers to entry to these programs are not inordinate.

In the Cariboo-Chilcotin we have a large number of First Nation bands. The birthrate is rising while the non–First Nations rate is falling. We need to find a way to get young First Nations up to speed on commercial skills that would allow them to assimilate into the workforce. In this area the workforce of the future will be filled by qualified First Nations people. First Nations are going to have unprecedented opportunity if they have the skills to embrace them. I am suggesting that this is an area the government can be strategic on in terms of investing for the future.

Rural B.C. rises and falls on the resource sector, so we again are suggesting that government look at how it can expedite the process of approvals or disapprovals for permits to access land and resources. This is everything from major projects to small permits to do ag leases or gravel pits. We would like to see the existing level of service speeded up rather than adding to the staff levels to accomplish the same thing.

Infrastructure. In discussing the affairs of this area with other people, the subject of forestry roads and bridges comes up. We are dealing with aging infrastructure that badly needs replacing or roads that need upgrading to handle higher and heavier volumes of industrial and regular traffic. I know of two single-lane bridges in this area that are badly in need of replacement and are being band-aided to keep them from falling apart.

I would also like to see continuance of the four-laning on Highway 97. This is the main north-south connector and is our lifeline for goods and services flowing in both directions. Again, the area is experiencing higher and heavier volumes of industrial traffic along with regular traffic. I don't have to remind you that we compete with other jurisdictions, and we must move our goods as efficiently as possible to stay competitive.

I would also suggest that the decision to support electrification along Highway 37 is an example of good investment in infrastructure that will greatly enhance economic opportunity in northwestern B.C.

The recently announced expansion of the rail facilities in Prince Rupert with some government support is an example of strategic investing. Goods can enter the central U.S. faster from Prince Rupert than from Long Beach, California. This is a good example of us taking advantage of a competitive situation.

[0910]

I am also aware, from what Carole James said on the news last night, that Premier Gordon Campbell announced this back in 2006. I don't know why it got delayed, but it was probably because of the recession in
[ Page 1355 ]
2008 that private industry backed off on it. So I'm glad to see it's back on the board. It will be a dynamic opportunity for northwestern British Columbia plus northeastern British Columbia, where they are having problems shipping coal to the ports because of the constraints on the transportation system.

Lastly, the court situation is disturbing. We are arresting people for alleged criminal activity and then allowing them to be discharged by the courts because of too long a waiting period until trial. This is ridiculous and a pointless exercise if you don't follow through in a reasonable period of time. The individuals may or may not be guilty, but we'll never know. Obviously, this is an area that has to be looked at in terms of funding increases or reorganization to be more efficient.

In summary, John Maynard Keynes, a noted economist, made this statement. "You can look at deficit financing in recessions, but you must pay them off when the recession is over and good economic times have returned." Times are not bad, but they are not good. So I'm suggesting we run very tight to the wire until we see where the world economy is going.

J. Thornthwaite: Thank you for your presentation. I just had a question about your comment that you would like to see the existing level of service speeded up rather than adding to the staff levels to accomplish the same thing. We've heard a lot from other rural areas about the issue of permitting and the speed with which it doesn't occur. But a lot of the folks that have presented to us have suggested that we increase staffing. So I'm just wondering how you would reconcile that comment with regard to decreasing staffing but encouraging and increasing the speed with which it can be finished.

B. Carruthers: I'm suggesting there has to be a better way to flow this kind of information through the various ministries and stuff like that. I'm suggesting we look at business methods to improve, rather than just throwing people at the problem.

R. Howard (Chair): Bill, you mentioned training. You're working with the local chamber. Are there specific needs assessments that you're aware of?

B. Carruthers: I believe that we have identified where there are areas of opportunity here. But I'm just looking at it from a general…. Our company operates…. We've always had trouble getting heavy-duty mechanics, and it's even worse because we operate up in the Peace where Pat is from. The employment situation is almost zero up there. Any village idiot can get a job, but skilled trades are in short supply.

P. Pimm: Well, thanks for that. [Laughter.]

B. Carruthers: I apologize for that comment. That's not what I meant. I meant that anybody…. There are unlimited employment opportunities there, and for skilled trades it's extremely more difficult.

P. Pimm: Thank you for your presentation. I think that was an excellent presentation, and it certainly lays out a lot of things that I think are positive. We do have some positive stuff in the province.

As for the electrification piece on Highway 37, how important do you see that to the future expansion of the mining industry and that sort of stuff?

B. Carruthers: Oh, I think it's extremely important. I think it's key to the whole thing. It's the key to the environment, because we get away from running industrial generators, which are contributing to the carbon content in the air and all that sort of stuff. Then you get electricity, which is a much cleaner, more efficient way to operate for those mining industries. It gives them steady supply, consistent pricing. They know where they're going on it.

Fuel prices are a big problem for people that run generators — the small mines in isolated areas and stuff like that. So I think it would be an excellent opportunity for them to have some idea where they're going with their costs in the future in terms of electricity. Electricity is a big part of the mining industry. They need a lot of electricity. So I think it's excellent. It's what has been badly needed for that area for a long time.

D. Donaldson (Deputy Chair): Thanks for the presentation. You make some very good points around financial planning and your experience in that field. Would you think there is a role for the government in public education around financial planning, perhaps in partnership with organizations like credit unions? It seems like there's that great need, as you've described.

[0915]

B. Carruthers: Well, I think there is. I would like to see more of it in the schools but also post-school opportunities. It's getting to be a more complex world out there. Lots of people have difficulty with it and just get overwhelmed by what's happening to them.

I find it a very interesting subject, but anybody that's interested in something soon learns about it quick enough. It's those that are the average, everyday working people who are having difficulty with it because there are a lot of complex issues out there. I would certainly say that if there was some opportunity to do that with the banking organizations, credit union or any of them, I think it would be well worthwhile.

R. Howard (Chair): Excellent. Thank you, Bill. Appreciate you taking the time to come and talk to us this morning.
[ Page 1356 ]

Now, our first witness…. If it would please the committee, Patrick Corbett has been involved in a slip and a fall, so he's requested that we move him to the end of the session today. He was the Hills Health group ranch. If that's okay, we'll move him to the end, and we'll try and slip everybody up one spot on the list.

So next on our list we have Randy Saugstad. Welcome, Randy. Thank you for being here a little early. As you know, you've got 15 minutes. At about ten I'll give you a heads-up, and you can either stop for questions or go straight through.

R. Saugstad: Okay. I'm a rancher in Big Creek, which is an hour and a half west of here. I've been there for 21 years. The ranch I have is a hundred-plus years old, and we've got some big issues with the logging that's going on.

FRPA, the Forest and Range Practices Act, was passed five or six years ago, and it took away all the power of the local district office here. Everything is in the hands of the RPFs for the logging companies. It's supposed to be consultation and all the good things between us and them.

We're tenure holders, as ranchers, because we have range on that same land. I have a water licence for irrigation, another water licence for generating power. I've had my own hydro system for 15 years there.

It's a really one-sided system. The loggers, the mills, come out there, and they just decide what they're going to log. All that it says in the act is that they have to address our issues. That means the RPF comes and says, "Yeah, we realize you're going to have water problems," and they go ahead and do the logging.

Where I live now to my neighbour's is 30 kilometres. It's a continuous cutblock. There's nothing left. I've been to the district office here. They're allowed to log roughly 93 percent of the land out there under this salvage harvest scenario. The problem arises…. We're the next-closest wood left to town. So the way the economics are in the lumber industry, they can only afford to haul it so far, so they just come as far as they have to, and they're just clearcutting and keep going out.

I know this is putting the cart before the horse. You guys aren't here to change the Forest and Range Practices Act. But what I think has to be done is more money has to be spent on the science. There was no good science done when this salvage harvest thing was implemented. There's the Cariboo-Chilcotin land use plan. It's not being followed. The seral stage targets were thrown away. The biodiversity targets were thrown away. And everything is for the logging.

It doesn't make good economic sense either. In my case they logged 60,000 metres at 25 cents a metre, generated $15,000 stumpage for the province. I pay $2,000 or $3,000 a year in water licences, taxes and range fees, so you can easily see that in ten years I would bring way more money to the government than what that bit of wood did. Yet that's destroyed my place.

I've been under three feet of water till the middle of August — a third of my place. In July I applied for a licence to dig ditches to drain it, to get the creek back in the channel. I still haven't got the licence to do that. Now on the ninth of September we went nine days without rain, and the creek dried up completely. So I'm back to burning diesel for power, and they're just off scot-free.

I've been to lawyers. I've been to the MLA. I've been to district office. Twice we've had the Forest Practices Board do reports on it. And there is nothing I can do about it. That's just the way it is.

[0920]

There needs to be money for science. There need to be more people in the district office or universities or whoever to go and look at this issue, because I'm sure that once somebody looks at it, things will change.

I do have all the support of the First Nations. They're equally concerned. We've been meeting with them.

I just don't know where to go, and I'm not the only one. It's just getting bigger. There are two of us. They've wrecked our ranches, and it's just going farther west and farther west.

There are more people facing the same thing. They're not quite there yet, but it's coming, the speed they're logging, and they're taking everything.

That's what I've got to say.

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

B. Routley: Under the former land use plan, what was the percentage of logging that could have taken place around at that time? Was that a better solution for you? Had they followed that and not changed the rules to kind of a sympathetic administration, would we have a better outcome for you?

R. Saugstad: It would have been way better. I was there all through the land use planning process. We had a Big Creek LRUP, and then it went to the Cariboo-Chilcotin land use plan. I was a participant in all that. It changes from place to place, and there are targets for intensive forest-harvesting areas, to parks, to everything in between.

Roughly, they were doing 30 percent harvest on 30-year rotations. That was acceptable to everybody that was at that table in that land use planning process. We all walked away from that fairly happy, because we gave up some, but we gained some.

Well, when the salvage harvesting came along, all the good parts of that were just set aside. The mills, like I say, just started close to town, and they're clearcutting everything as they go.

The science has not been done. We keep hearing there's 90 percent dead in this beetle-killed pine. When
[ Page 1357 ]
you actually go out there on a horse or even drive up the road and look, there's probably only 40 or 50 percent of the forest that's actually dead.

Ninety percent of the merchantable is dead, but there's all the young stock in those forests. They're still healthy, and when that logging is done, that's all trampled flat. Everything starts over at this high again. It's been proven. In Baker Creek there were studies done on it.

It recovers faster without this intensive logging than it does being logged, but it's all economics for the mill, at the expense of the guide-outfitters, the trail riders, the tourism, the ranchers, the wildlife, the fish.

In my case, last winter that creek froze solid on the 15th of January, right to the bottom, and never started to run till the end of March. That's where our cows get water. There was nothing. Our cows had no water for that period of time. We chopped holes in the ice looking for water. The little fish were frozen, dead. It killed all the fish in the creek.

Nobody cares. It's all for the logging, and the science is not being done. There's got to be a budget to get people back out there, whether you fill up these desks in the Forest Service office again or you get the university or you contract it out — whatever. But come and do the science, and I'm sure the process will change.

M. Elmore: Thank you for your presentation, Randy. It's very disturbing to hear the severe impact on your ranch. Just wondering if…. You mention you've been working with the Forest Service office. Have there been inspectors out to…?

R. Saugstad: Oh yes. I go in to the district office here, whether it's MOE or MOF or what it's called now. I got really good support from all those guys. You've got a district hydrologist here from MOE. He's coming out on Saturdays to try and help us out on his own time, putting in water-recording stations and doing what he can.

But there's no budget for anything. Why would a guy that's a PhD in hydrology have to come out on a Saturday to help us out? He knows it's wrong. He said he can prove it's wrong. But there's no budget, and there's no process to do it.

It's all put back on the mills. The guy in the corner office tells the RPF: "We're going to log that. You just tell me how." That's the way it's done.

[0925]

We're casualties. It's not good economic sense, because these ranches have been there for a hundred years, and they'll be there for another hundred. We're just coming off of eight really bad years, since BSE. We haven't made any money for eight years. Now the market has turned around, and we're making money again. Then we get this heaped on top of us. How much can we take?

In my case, unless something is done, I can't survive. My ranch can't survive, because we can't calve cows with no water to drink. They eat snow. A cow or a horse can survive eating snow, but when they start calving, it doesn't work because they don't make enough milk. Then the thaw starts coming in the spring, and they drink out of the meltwater puddles, which are polluted with manure and urine. Then that passes all the diseases onto the calves because they don't have the immunities that an adult has. It just doesn't work.

I've tried for two years. I've been probably two hours every morning on the Internet and on the phone, had meetings in town — like this. I've talked to every agency. I've been to the RPF professional association. I've been to Donna and it just comes a dead end. Everywhere I go, it's a dead end. Nothing happens.

If some of the science was done, I know I wouldn't have to argue anymore, because anybody that went out there and actually looked at what was happening wouldn't let it happen. But there was no science done. Snetsinger upped the cut and made it a salvage harvest scenario, and every other value was ignored.

D. Donaldson (Deputy Chair): Thanks for taking time to come in and present this information. You know, the government concerned about revenue generation…. It's not a very heartening tale to get $15,000 into the provincial coffers off 60,000 cubic metres when the use that you're putting to the land is much more sustainable from a revenue generation point of view — cattle production and the lease fees.

I had a question for you on a slightly different aspect. When we were here in the spring, I heard about some of the issues from fire damage to ranches and the ability to apply through the province for some relief funds for the damage done. It was a matter of the province getting that underway, because there was matching or even bigger than matching funds from the federal program for that.

There were a lot of delays in that. Other jurisdictions had already pushed that through, but it seemed that there was some slowness in this area.

Did the fire damage impact you, and have you seen those relief funds coming back at all yet?

R. Saugstad: It hasn't impacted us. The mills keep telling us they're protecting us from fire. This is part of the scenario. Well, we've had lots of fires, and we watch it. In the dead standing — even when it was still red needles, now it's all gray — the fire does not carry in those dead forests the way it does in a cut block, because when they log it, all the fines, all the limbs get knocked off. The dead grass…. When those fires go in a cut block, it's huge.

We've just been lucky. There hasn't been a fire in our area that threatened our ranch or our range, so I haven't dealt with that. I know flood damage is part of that package, and the amount of money I could get for flood damage — $15 an acre — does not even pay for the grass seed. It's just a joke.
[ Page 1358 ]

I don't know what the figures are for fire because I haven't been involved in it, but in my case, it's not even worth applying for. We have this federal program, a farm insurance kind of program. In eight years, since BSE came, I've participated in it. My net out of that program is somewhere around $1,500 in eight years — not enough to fill the Tidy Tank in the pickup once to haul fuel home for the tractor.

I'm not asking for money. It's just a joke. The programs that are out there are pretty near an insult. They're not worth the time it takes to apply for them because you get so little out of them. But we do need the science.

Just let us survive as free enterprise. That's all I'm asking for.

R. Howard (Chair): Excellent. Thanks, Randy. We're running out of time here. Appreciate your taking the time to come out.

Next up we have the Williams Lake Construction Association — Sue Zacharias.

Welcome, Sue. You've probably heard that you've got 15 minutes. At about ten I'll give you a heads-up, and you can take some questions or not. Your choice. Welcome.

[0930]

S. Zacharias: Thank you very much for coming to Williams Lake. Before I begin the presentation, because I will read it — some of you are probably just reading it now — I want to just outline who I'm representing here today. I'm not trying to brag, but I just want you to understand that the group is speaking with one voice provincially.

I represent the Williams Lake Construction Association, and we are part of the B.C. Construction Association-North. There are four BCCA regional bodies, and they make up the BCCA, the B.C. Construction Association, which is in Victoria. As chair of BCCA-North, I also sit on the BCCA board in Victoria as the treasurer. We are speaking as one voice from all over the province.

The other thing I wanted to mention…. We have just identified these issues. Our next provincial board meeting is on the 30th of September, and we haven't gone public with this yet. We have to look at it as a board, but I have the board's permission to be here today, and it affects all of us. That's just kind of a bit of the background.

Also, when I'm done, I just want to say an aside about the B.C. Construction Association in regards to what Bill Carruthers mentioned about trades training.

The reversal of policy on the HST, regardless of the referendum process, is viewed as a serious setback for business in the construction sector. The industry has great concerns for the following reasons. These are the key issues, and I've prioritized them.

Cost of PST and the economic hit to the construction industry. HST was expected to generate $880 million of annual cost savings in the construction industry. Conversely, the reversion to PST will add significant costs which could stagnate the entire industry and seriously impair the number of jobs in this sector. Government is encouraged to develop incentives or job-protection plans to otherwise ease the transition back to PST for the construction industry.

Issue 2, transitional contracts and pricing adjustments. Considerable attention was paid to the residential housing sector and the transition to ensure that HST implementation did not seriously impact the overall tax cost of a new residence, at least for those at or below the average price of a new home in B.C.

However, there were many instances of double taxation — PST, HST — on commercial projects and non-eligible residential projects in and around July 1, 2010, due to the long lead time between contracting and delivery of the product or service.

Government is encouraged to address current long-term agreements by allowing them to be grandfathered under HST — for example, credits available to the builder on costs and to the purchaser where applicable because the agreements were entered into with the expectation of net nil dollars sales tax.

There are concerns that contractors may be expected/permitted to adjust prices to reflect the new embedded cost of PST for materials purchased after the transition. If so, will all contractors' agreements permit these price adjustments? Regardless, the full impact of PST on any given contract is nearly impossible to quantify and will certainly hurt contractors because they will be unable to pass on the full cost of reverting to PST, at least in the short term.

Issue 3, administration costs/audits involving two tax systems. PST audits were and are notoriously difficult for the construction sector.

We encourage government to instruct the taxation branch to take a relaxed approach and honour its commitment to simplify the application of PST on construction service contracts as announced in October 2008, following the provincewide PST review. PST for contractors involves very complex issues and requires comprehensive books and records to satisfy the tax authorities.

[0935]

Contractors will need to spend a lot more time and resources on administration of their businesses when we revert to GST-PST.

Issue 4, improvements to real property versus the sale of materials. The PST implications of lump sum construction contracts are relatively well understood. However, time and materials agreements and similar agreements which separate the materials and labour components are very problematic.

We encourage government to clarify this issue in accordance with the October 2008 announcements by treating all contractor services, materials and labour as
[ Page 1359 ]
PST-exempt construction agreements where the contractor either installs or arranges for the installation of the materials.

While we recognize that government must move judiciously in the re-enactment of PST, we encourage government to do so at as quick a pace as possible to ensure that economic activities are not curtailed.

Having said that, we encourage government to pursue an improved PST environment and to consult to the fullest extent with industry to ensure that the new tax regime improves B.C.'s productivity — and to support both existing jobs and job creation.

These are some of the issues that we've identified through our work with our staff in Victoria and working with an economist out of Victoria and a tax consultant. As I said, on the 30th we'll be having our board meeting in Victoria, and we will be discussing this. Then we probably will take it out to the public.

There is a general feeling…. You know, we're very disappointed in the loss of the HST, and I know personally there are many people that wish that we could just somehow get out of it and get back to having the HST. As a business owner of United Concrete and Gravel…. We've been in business for over 30 years, and I know I speak for a lot of people that are quite disappointed in the results.

I have a folder here, and there's one at the front table. There is a contact for more information on this, and that's the president of the B.C. Construction Association in Victoria, Manley McLachlan.

R. Howard (Chair): Let me just go back to your timing before we get into questions. On the 30th of this month your association will meet as a whole, the four regions, so you will….

S. Zacharias: Yeah, and this will be a topic for discussion. But because it came forward and I discussed it with the board and our MLA, we felt that this would be a good venue to bring this forward.

R. Howard (Chair): It is, and I appreciate that. You have until the 14th of October to submit anything additional to this committee.

S. Zacharias: Oh, okay. So as a result of our meeting on….

R. Howard (Chair): Yes, so you will have a two-week window to update the submission if you'd like.

S. Zacharias: Just as an aside, Mr. Carruthers was speaking about trades and trades training. B.C. Construction Association and the four regions are very involved in a program, the STEP program. We began it probably six or seven years ago, and it has grown extensively. I don't know all the details, but it works with federal funding. Anyway, that would be another….

The rural caucus was here, and we presented some information on the skilled trades employment programs that we run.

[0940]

Again, Manley McLachlan would be a good…. He's in consultation with the deputy, just had a meeting yesterday with the deputy — not the Deputy Premier, but….

R. Howard (Chair): The Deputy Premier would be Kevin Falcon, Minister Falcon.

J. Thornthwaite: Oh, his deputy minister, Kevin Falcon's deputy minister.

R. Howard (Chair): Peter Milburn.

S. Zacharias: I can't remember, but we're working, trying to make sure that government is very aware of the trades training that we're involved in and how effective it is and how well it's run. So we're just trying to get the word out there, too, that you all look into it or have a phone call with Manley so that you in government in the different areas — everybody — start to become aware.

We're already doing a lot of the programs. There are so many things in place, and we're doing them very well. So it's just something, as a heads-up, to look into the BCCA, the B.C. Construction Association.

We have 2,200 members in the construction industry that are our members, and we are the voice of the construction industry.

R. Howard (Chair): You've got a few minutes left. Don't go away. We've got a few questions.

S. Zacharias: I might also add that I don't know if I'll be able to fully answer your questions, so that's why I also want you to be aware that if something was unanswered, Manley is available to follow up also.

R. Howard (Chair): Okay. I appreciate that.

D. Donaldson (Deputy Chair): Thanks for your efforts and for informing us about some of the initiatives you're going to put forward at the September 30 meeting here with your association.

I had a question about consultation and how you're being informed. Prior to the results of the HST referendum being released near the end of August, the Premier said a plan B was in place should the HST need to be repealed. Were you or the association you represent consulted about plan B, and since then — it's been almost a month — have you been informed of any of the details of plan B that the government said was in place?
[ Page 1360 ]

S. Zacharias: Not that I'm personally aware of. Plan B — what we would like would be for the HST to be put back in, and you'd have two years to suffer it out and hopefully get re-elected. That's a lot of personal opinion that's out there, and I'm just sharing that with you.

P. Pimm: Thank you very much for your presentation. I won't comment much, but as a small business owner, I know what you're going to be going through. I think probably this will come back to haunt us for a long time in the future.

Do you have any direct recommendations that should be considered as we revert back to a PST system of any description — as far as some sort of input taxes or anything like that, or any thoughts along those lines? That's the first part of the question.

The second question I've got is…. You talk about the training needs in your apprenticeship programs. As things get busier, and I think we're going to see times get busier in the north and northwest and northeast, will you see any decline in your enrolments in your trades because folks go off into the workforce? We're seeing that in the North Peace, and that's affecting things. Just a comment on those two.

S. Zacharias: That's a good question — the first one about if we have any direct advice or input. I don't know. So I'll take that question back. I'll be down for UBCM next week, and then I'm going over to Victoria on Friday, so I will take that question and make sure that I let the board know what we've discussed here today and that question.

As far as trades training, generally our opinion is that we are going to be very short of tradespeople. You'd probably have to understand a little bit about the money that we get federally.

Donna, are you able to comment on the money that we get for our STEP training federally, that we were asking Pat Bell to give us?

[0945]

It's to do with some kind of dollars that we get, and it helps people who are maybe on unemployment, but we're looking to expand that.

We've got all the programs in place. There are lots of people that are in their 20s and have decided that they want a career now. The dollars that we work with are very…. You know, they only work with people who might be on EI or who might have just come from out of the country.

We are looking at getting some other dollars, through Pat Bell. This will help us put people who want to get a trade and don't qualify because they're not on EI…. Maybe they're working at Wal-Mart, and they want to change their life's career — right?

There's a lot of work to be done. We are working on it, as the B.C. Construction Association. We've formed a partnership now with the northwest trade agreement. We're looking at coming together, at least in the western provinces, and our parent body, Canadian Construction Association, is working very closely with the federal government right now to look at our immigration, because we feel that's another important link to our potential shortage of labour.

If we could just access more people that…. We can't just…. There are more people out there that want to work or to change their job. We need to be able to make some of those funding dollars available for those people, not just the ones who are on EI or….

R. Howard (Chair): I've got you. I'm going to have to cut you off here. We've run out of time. Thank you very much.

Next up we have Thompson Rivers University Students Union — Jessie Venos. Welcome, Jessie. You have 15 minutes. At about ten, I'll give you a heads-up.

J. Venos: Good morning, ladies and gentlemen. My name is Jessie Venos. I am the current student council president for the 2010-2011 school year. As president, my job is to represent the students' voice — as well as my own, due to the fact that I am also a second-year psychology major.

I am here at this meeting because, as a student, I feel that our campus is lacking in comparison to the main campus in Kamloops, and this is a concern. But the advantages of going to TRU Williams Lake are huge, because we appreciate the lower cost of living in Williams Lake. We experience learning with a highly qualified faculty. We have access to the faculty easily. We enjoy small class sizes and also having a brand-new, state-of-the-art university.

Even with all these good things about our university, we are lacking in certain areas such as student services — like daycare, which can help us provide exceptional care for children and families in a safe and healthy learning environment. We can serve the child care needs of students of the university, faculty and also off-campus families, and also offer educational opportunities for our students, related to the development of young children, with an early childhood education degree.

Also under student services: transit passes. If we have the option of having free transit, as in Kamloops, I believe that fewer students would drive and we would improve the environment by having less greenhouse emissions.

Also, promotion and advertising within high schools and communities in the Cariboo is something we need. Picking out a university that is close to home saves, on average, $8,000, but without promotion and advertising, this does not happen.

Moving to a different university causes stress on the student with finding your way around a new city and/or
[ Page 1361 ]
finding a job that works with your school timetable, but staying home gives a student a sense of calmness.

Also, at our university we lack full-degree programs. Students like myself who get stuck at the end of their second year can't always afford to go to a university. When we have professors such as Dr. Chris Montoya, who are able to teach third and fourth year, why shouldn't they be able to? Students want to be able to finish their degrees in Williams Lake. Classes such as English, psychology and nursing should be able to go to the fourth year.

[0950]

Also, we find that a health and wellness centre is lacking, which would include the daycare, a free health clinic for the community and students, and a lecture hall for community speakers such as Dr. Asa Brown, who was a guest lecturer last year at our school.

The health and wellness centre would also have a kitchen where students who can't always afford food can have a hot meal once a week. Also, the kitchen would be a learning environment for our chef training program, which can help students in the workforce.

If we were able to have things like daycare or a health and wellness centre, we could become a stronger student union. Having events like Tunes Against Tuition, to lower tuition costs, and movie nights on the field will improve our student experience.

Things like daycare, having a health and wellness centre, but also medical and dental insurance and a free bus pass would create student unity among the campus.

To summarize, enriched student services along with added facilities, full-degree opportunities and advertising for this complete campus experience right here in Williams Lake will lead to a stronger student body and union. Thank you for including me in this meeting to express the wishes of the student body of the university.

R. Howard (Chair): Thank you, Jessie. We have a question.

B. Routley: Thank you for your presentation. Are you aware of any barriers to access to education right now? I mean, you've outlined some things that would certainly help. But we've heard through communities all over B.C. about the need for post-secondary education and to make sure that…. Industry and business are looking forward to seeing more students attend our universities. So I'm wondering what the barriers are from your perspective.

J. Venos: Well, right now we can only have up to second year, and we find that that does not work. Half of my friends have gone to universities — UBC, UNBC, SFU, among others — and we find that they wanted to stay here but they couldn't. They were stuck, like me. I have no more choices in my program because I've taken all the classes that I can.

M. Elmore: Thanks for your presentation, Jessie. Do you know how many students, approximately, go to the campus?

J. Venos: On average, between 450 to 500, depending on if the trades are running.

M. Elmore: Right. Yeah, a good size. In terms of your mentioning the importance of daycare for students and faculty, is there the opportunity for daycare services outside of the university? Or are you really finding that it's something that students are…?

J. Venos: It's too expensive to be able to pay for tuition and daycare. Most of the students that go to TRU do have families, and they do have to put their children in daycare.

M. Elmore: Right. And then do you have feedback on…? I know you mentioned that it's more affordable to stay here in town. What's the experience in terms of tuition fees and the actual costs?

J. Venos: Well, in Kamloops, to stay at the dorm for eight months — the one that has the 24-hour security — I believe it's $5,600.

M. Elmore: And tuition fees for courses — how is that here?

J. Venos: I believe it's the same for Kamloops too. I think it's $422 a class, and that's way too high.

M. Elmore: Right.

R. Howard (Chair): Excellent, Jessie. Thank you so much for taking the time to come and present to us this morning. It's much appreciated.

Next we have Thompson Rivers University Williams Lake — Shirley-Pat Gale. Welcome.

S. Gale: Good morning. How are you guys this morning?

[0955]

R. Howard (Chair): Very well, thank you.

S. Gale: I'm going to start with an apology. Our director, Dr. Ray Sanders, is in Lillooet today. He was able to get multiple vice-presidents from our university to actually go to a regional centre. It's been in the works for about six weeks. He sends his apologies, and me in his stead.

R. Howard (Chair): I'm sure you'll do just great. As you know, you've got 15 minutes. At about ten I'll give
[ Page 1362 ]
you a heads-up, and you can take some questions, or you can go straight through.

S. Gale: Okay. What I did for you guys is included in your package Dr. Sanders's card as well as a copy of what was going to be the PowerPoint presentation, so you have it there in colour. The first page is just a lovely snapshot of our valley as you come into Williams Lake. On the second page you'll see sort of multiple pictures.

Nowhere in Canada has the evolution of post-secondary education been more dramatic than in Kamloops and Williams Lake, British Columbia. The last three decades have seen a smooth transition from a community college to an innovative university college to a full provincial university with a unique mandate.

Thompson Rivers University really is a different kind of university. TRU is a unique combination of traditional degree programs that allow diploma and certification program graduates access through laddering, along with flexible degree completion through distance education. TRU is the provincial house for Open Learning.

Our mission is that we are a comprehensive, learning-centred, environmentally responsible institute that services its regional, national and international learners and their communities through high-quality, flexible education, training, research and scholarship. We are striving to become the university of choice.

Thompson Rivers University Williams Lake is located in the city of Williams Lake and is the largest urban centre of the Cariboo-Chilcotin region. It services an area roughly the size of Ireland, with a number of rural communities and 18 First Nations communities.

It is a full-service campus and can be considered a microcosm of Kamloops. The campus is situated on traditional Northern Shuswap territory. Its location and 20-year history provide a unique environment that fosters integration, collaboration, interdisciplinary and community-focused teaching and research.

For the Cariboo-Chilcotin region — and that is a picture just outside of the Alexis Creek Ranch, on page 5 — a combination of the current global economic climate and the eventual transition of one of its main industries, forestry, due to the impacts of the mountain pine beetle epidemic necessitates an increased focus on essential skills development and upgrading in our region.

The Cariboo-Chilcotin Beetle Action Coalition in 2007 estimated there would be a 30 percent reduction in direct forestry jobs and a 15 percent reduction in indirect jobs, affecting over 6,000 workers employed in the region. We've seen this come to fruition. What we're seeing now is a necessitated need for an increased level of workplace essential skills and upgrading so that workers and people are able to transition from one industry to another or from one job to another.

It is also estimated by CCBAC that up to 40 percent of forestry workers in the region, across various industries and occupation classification, have not completed high school. This is double our regional numbers, and it's also quadruple the provincial average of non-completion of high school.

Most workers and learners in good, related employment have literacy levels lower than the level needed to cope with the demands of everyday life.

There is a direct link between employability and literacy skill proficiency. HRSD and C.D. Howe point out that this is an economic growth opportunity, in that if you increase literacy levels in a region or a province by one, it can equate to almost half a billion dollars and about $2 billion nationally if the average is increased across Canada. Currently there is no strategic framework or funding in place to guide these learners through essential skills development.

The next slide shows some of the statistics from Statistics Canada for the Cariboo-Chilcotin region. Some would consider them challenges — the doughnuts are the ones you're looking for — but we consider this an economic growth opportunity.

[1000]

Our average of 24- to 54-year-olds without post-secondary credentials is 52 percent. The provincial average is 38. In the Cariboo-Chilcotin region 18-year-olds who have not graduated…. So this is the average from '07-08 to '09-10. The average in the Cariboo-Chilcotin region is 47 percent, which is double the provincial average of 23 percent.

What I'm trying to demonstrate to you is that this region has some unique challenges, which could turn into some unique opportunities with funding opportunities.

We deliver a high-quality education and post-secondary experience opportunities. However, as the Statistics Canada data demonstrates, in the Cariboo-Chilcotin region more than half the population does not have the skills to access said opportunities. Many, especially those coming from outlying rural areas and First Nations communities, do not want to or are unable to leave their communities to even access the education opportunities in our urban centre.

That being said, the opportunity lies in the fact that more want post-secondary education but need to upscale. Programs need to be delivered in a flexible and culturally responsive manner.

One of the other challenges for our First Nations communities, the 18 which we serve, is that federally the funder, INAC, will only fund aboriginal learners at an 0600 level, so a grade 12 level. What we know from doing literacy and needs assessments in communities across our region with the Cariboo Chilcotin Partners for Literacy is that most of the communities are at an 030 or lower, so they're actually at about a grade 9 level or lower.

I just was in Canim Lake yesterday, which is one of our rural communities outside of 100 Mile House. It's
[ Page 1363 ]
a wonderful community. They're much further ahead than many of our other rural communities, but what they're saying is that there's a distinct population of young people, about 19 to 29, that are sort of the first true generation whose parents went to residential school. So it's that first break. What they're discovering is that this group of learners not only need the literacy skills, but they need life skills. They need parenting skills. They need addiction….

There are all of these other supports that are required for the learners in this region in order to truly support them so that they're successful. So it's not just a program for a program's sake, but it's actually from the ground up and addresses the needs and concerns of each of the communities within the region.

Currently another challenge is that our core funding — from the ministry, thank you — covers only our tenured faculty. This restricts TRU Williams Lake's ability to be regionally and culturally responsive, as TRU-WL has limited funding flexibility to hire the needed faculty for niche and international programs that would be economic drivers for both the university and the region as a whole. It does not cover the no tuition for u-prep courses that are desperately needed and required in our region.

I'm on to the u-prep Williams Lake. One of the opportunities since we rescheduled and have had Dr. Sanders as a leader in the last year…. He has taken our u-prep courses from being run during the day and rescheduled them to meet the needs of the learners. They're now being run after work, so at six o'clock in the evening and on weekends. As of last Friday we have seen a 225 percent increase in u-prep, which is wonderful. It gets students in our door. It's a fantastic feeder for other programs.

But the challenge, again, is that there's no tuition, and there's no block funding from the province. So if we continue to see this increase, we may not have the human capacity to fill the need, as it goes beyond the capacity of what our faculty agreements allow our faculties to teach.

The biggest piece that we hear from Williams Lake, 100 Mile and all of the First Nations and rural communities is that they really want "from the ground up." They want things that are community and culturally responsive. They'd like them to be delivered either on campus, when it works for the learners; or on site, being in the community or perhaps in a business or in an industry, maybe in a mine or at a mill; or as a hybrid model, where we provide the support and perhaps the curriculum to a community, where they would have a certified teacher take that curriculum and help adult learners on site in the community.

The second….

R. Howard (Chair): Sorry to interrupt you, but you're at about 11 minutes, just so you know.

S. Gale: I've got 11? Okay. Perfect.

R. Howard (Chair): No, you're at 11 minutes.

S. Gale: I'm at 11 minutes. Okay.

[1005]

The second one is the opportunity for growth, and then I'll do questions real quick. We have some opportunity for niche programs that would address those needs of business and industry. We need to look at aboriginal governance, resource management, community development, health care certification and programs that are specific to meet our aboriginal needs in the region. We're looking at things like trucking and logging certifications, so to put a program in to help truck drivers not just be certified on the highway but certified to do the logging on those back-country roads. We're looking at a mining and a millwright certification as well.

We'd like to take advantage of the international students and the power of our south campus and, hopefully, help our Premier meet her promise of increasing international students by 50 percent. But they come with some unique student service needs around child care, like Jessie mentioned, and counselling.

They also require some capital projects, because we need to increase housing, and we need to provide a state-of-the-art lecture hall. With international students comes the need to provide health care, and a health clinic would be the rest.

If you have any questions, I will leave it there for you.

D. Donaldson (Deputy Chair): Good morning. Thanks very much for the presentation. Good work on the huge increase in the university prep enrolment.

What you've described around block funding and core funding for many rural people who need to acquire a little bit further degrees of skills and education before they can enter into trades — or other people mentioned — has definitely been highlighted by other presenters around the province, and it's lacking in a jobs plan to take advantage of the local opportunities — right?

My question would be around something we heard yesterday from the president of UNBC. It relates to what one of the other presenters talked about, the large First Nations population that could be an important part of the labour force in the future. The president of UNBC said a program in partnership with TRU was cancelled here in Williams Lake. It was a weekend program especially for First Nations.

S. Gale: The Cariboo Chilcotin weekend university, yes.

D. Donaldson (Deputy Chair): Yeah. It seems to me that that's the kind of program where you're providing
[ Page 1364 ]
increased access. Do you know the reasons behind why that was cancelled?

S. Gale: That is a question for the federal funder, ISSP. The funding came through the indigenous student support program, which is federal. There hasn't really been any disclosure publicly as to why that funding was cancelled. I have a feeling that it comes around the quantitative data, the ability of students to still come in on those alternate weekends to be successful in completing.

We did have some great success with the program, but the numbers sort of went like this in the last couple of years. That seems to be the indication from the funder as to why that was cancelled.

It is exactly what we're sort of looking for, and using that model as a way to continue to provide service on a one-to-one basis with the communities. But that is the type of program that needs to be in place so that these students, learners, have the opportunity to do so. For many of them, the gap that that has created…. They're struggling now to find courses locally.

The partnership between UNBC and TRU…. What it allowed us to do was share. TRU had its strengths, UNBC had its strengths, and we could provide courses that reflected both of those strengths.

J. Thornthwaite: Thank you for your presentation. What kinds of partnerships do you have with the bands, for instance, to try to encourage the folks, as you just commented, whose parents were survivors of the residential schools? Obviously, there are cultural issues there and trust issues with regards to education, etc., but are the bands supportive of trying to encourage those folks to get educated and encouraging them to actually show up?

I'm assuming that that's what you're talking about. You can have all the programs you want, but if nobody shows up, then it's not viable.

S. Gale: Two pieces for the Canim Lake group. They ran two different programs. They ran a college prep program, and then they used that as a feeder into a life skills and job readiness program that just finished. The first one was more of a…. They had to go into town, into 100 Mile, to access the services. They only had three complete.

The second program, the lessons learned, they held in their community. They brought experts into the community. The learners, 18 of them, basically got a little house that they had. So there was infrastructure, there was a kitchen, and they took ownership of it.

At the end 16 of them finished. More than half increased at least one level, from an 030 to an 040, or even up to an 060 level. And two were actually at the university-ready level and have transitioned on.

[1010]

Of that group, over the summer 80 percent of them went to work, working on the roads and building the bridges that were happening on that stretch of highway.

So when it was delivered on site, then it was way more successful than when it was even more of a hybrid. So what they are looking for is a partnership with the university to figure out a way to deliver a similar service on site.

The second piece is that we are currently, because we are on traditional Shuswap territory, working with the Northern Shuswap Tribal Council. We are probably, I would say, weeks away from signing a formal memorandum of understanding where we become the sort of primary or sole post-secondary provider for the Northern Shuswap Tribal Council and its communities.

We are going to work on doing similar things with the Chilcotin national government and the Carrier-Chilcotin Tribal Council as well.

J. Thornthwaite: Well done. Thank you.

R. Howard (Chair): Excellent. Thank you, Shirley-Pat. We've run you right out of time. We appreciate you coming in front of us today.

S. Gale: Do you want the notes as well?

R. Howard (Chair): You could leave the notes with Arlene at the back of the room. Thank you.

Next up we have the Seniors Advisory Council of Williams Lake and Area — Audrey MacLise.

Hello, Audrey.

A. MacLise: Good morning.

R. Howard (Chair): As you're getting set up, I'll just let you know you'll have 15 minutes. At about the ten-minute mark I'll give you a little heads-up, and you can stop and take some questions, or you can keep going and use all 15 — your choice.

A. MacLise: There is among some a perception that seniors today are well off and faring better than they have ever been. This perception relies on statistics about assets accumulated over a lifetime. It does not reflect the reality faced by many seniors today. The erosion of a senior's income comes in many forms, including inflation and actions undertaken by all levels of government.

Population aging is one of the most challenging demographic trends in the world today, and Williams Lake is no exception. In 2011 the first baby boomers will enter their senior years at 65. By the year 2038 there will 8,000 people between ages 55 and 74, and 3,000 over the age of 75 in this community. There are available studies that verify these figures.

However, these figures do not include the seniors living in the outlying areas who will move into the city when they start to experience health problems. These figures
[ Page 1365 ]
indicate that it is essential that we pay attention to our shifting demographics now and plan accordingly.

Cost-of-living increases in the guaranteed income supplement have in no way come close to matching the increases in the rising cost of food, energy, housing, transportation and medications. Seniors have made positive contributions to our province that should be recognized. We call on government to take action to allow seniors to live their lives in dignity.

But what must be done? Expand housing and health options for seniors based on their own needs and preferences, including affordability, so that they may remain independent for as long as possible and away from expensive assisted living, complex care and hospital care.

We must develop a home support system that is workable and reasonable, a program that will provide universal 24-hours-per-day, seven-days-a-week home support when necessary. At the present time home support workers are not allowed to do any cleaning, laundry, grocery shopping or meal preparation. These are all very basic needs.

[1015]

We have been very short of complex care beds since 2004 when Cariboo Lodge, Heritage House and Deni House were all closed to make way for the opening of a private assisted-living and complex care facility. This drastic move left our community 40 beds short, and since that time as many as 12 seniors at any one time have had to live in Cariboo Memorial Hospital for as long as five months while awaiting placement in complex care. This is expensive and unacceptable in a 26-bed hospital.

We have been shown a model of the Cariboo Memorial Hospital renovation, but the renovation will not even start for five years. We understand that Deni House will be reopening in November, with 26 beds being a mix of complex care and convalescent beds, which will ease the situation but not fill the need in the community today.

Government must promote public or non-profit facilities over private for-profit facilities. This has been very obvious to the residents of Williams Lake. When the seniors village opened a new assisted-living building in September 2009, offering 85 units…. Today only one-third have been rented. There are no subsidized units in this building. It is totally private for-profit. Our seniors are simply not able to pay the price.

Help develop a national policy on mental health. Recognize the expanded role that home care workers can provide in the domain of mental health.

Additionally, the stock of seniors rental housing is shrinking. We support immediate action to build non-profit rental housing designated for seniors only. The current practice of placing hard-to-house adults in seniors housing is woefully inappropriate.

When residents here are referred to a specialist for cardiac or cancer care, it is not a matter of getting in your car and driving across town to keep your appointment. It is a matter of driving to Kamloops or a seven-hour drive to Kelowna to keep your appointment, and you will probably have to spend a night or two in a hotel in Kelowna because the hospice is usually full.

We currently have an Interior Health bus that takes patients to Kamloops and back on Mondays. We also need a bus that travels to Kelowna and back to transport patients from Williams Lake and 100 Mile House, as we find many seniors can no longer drive that distance.

The costs of medication are rising exponentially, and PharmaCare has not kept pace with these increasing costs. Therefore, many seniors cannot afford their medications which may assist in keeping them out of hospital.

Address the issue of adequate income and the role this social determinant of health has upon one's ability to remain socially connected.

In closing, we would like to point out that British Columbia is the only province in Canada whose seniors pay for their medical insurance. I've just learned that Ontario has a threshold of $20,000. This inequality needs to be addressed and resolved so that B.C. seniors receive the same benefits as those in other provinces.

The pensions, both federal and private, that many seniors receive either do not increase at all or only grow by tiny amounts that do not keep up with inflation. Most seniors find their income eroded but cannot return to the workforce to improve their economic situation. Not having to pay MSP premiums would certainly help older adults to cope with increases in their cost of living. No seniors retire after years in the workforce expecting to see their income fall over time to the poverty level.

[1020]

Thank you for your attention to this reasonable and important request to help the seniors of B.C. I also wish to thank you at this time for the opportunity to present our concerns to your committee.

R. Howard (Chair): Thank you, Audrey. We have a question.

B. Bennett: Thank you very much, Audrey. That was a complete and comprehensive submission. You covered a lot of important issues.

You're not related to Donna Barnett, are you?

A. MacLise: No, but we do know each other.

B. Bennett: Yeah, I've heard Donna talk about this, all of these issues, many times in Victoria.

I come from a small town as well, and I'm curious about this 85-unit assisted-living building here in Williams Lake. Only one-third of the units out of 85 have been rented, and you say that there are no subsidized units, but the assisted living itself is subsidized. I don't quite understand what you mean by that.
[ Page 1366 ]

A. MacLise: Well, in the original building that Retirement Concepts put up, the Ministry of Health paid for…. There were 33 assisted-living units in that, and the rest was complex care. The ministry paid for 21 of those units to be subsidized beyond whatever your normal subsidy is.

But in this new building, none of those units have additional subsidies, so the people have to be able to afford them. Actually, they have had that building recently rezoned, through the city, to congregate housing, which means that anyone can rent a suite there.

That has caused some concerns in the community because the original residents went in being told that it was a seniors residence, so they felt secure. I am a little concerned about the security if other people come in that are unknown and maybe have access to the portion where the seniors themselves are living. We don't know how that's going to turn out at all with this congregate housing and seniors assisted living.

I brought that up to point out to you that the assisted-living rates are high, and I understand that there are other buildings of the same type throughout the province that are standing empty because people can't afford to get into them.

D. Donaldson (Deputy Chair): Thanks very much for the presentation — some excellent, excellent points. We've heard about the transportation issue, especially, in some of the other communities we've been in. The more northern areas share those concerns as well.

My question is on the situation you describe. Obviously, decisions were made in 2004 to go from a public non-profit model to a private model. And the overdependence on the private model, as you've described, has had bad repercussions.

You know, we always like to learn from these decisions and improve. What were the reasons given in 2004 to move that way? Do you think there's an ability to learn from that, to turn things around when decisions are being made today?

A. MacLise: Yes, as a matter of fact, you have managed to turn one around. Deni House, as I mentioned, is to be opened. It was only 17 years old when it was closed, and functioning very well. It's just across the driveway to the hospital.

There's an underground tunnel. We really like that. If a senior had a bad turn at night, the staff could have them over in the ER in five minutes in their own bed. You can see the advantage to that, where they could have full access to hospital staff, a doctor in emergency and hospital equipment. It really worked well. We were sorry to see that go, and it left a great deal of bitterness in the community.

[1025]

Now, getting Deni House open again. When it was going full tilt, we had 46 beds, and now it's only opening with 26. It's going to ease things a bit, but it's not going to solve the problem.

I've been reading quite a bit lately on the cost, the advantages, of keeping seniors out of facilities, and I recommend you read A Bitter Pill. I've forgotten the author's name, but he teaches at UBC. There have been a lot of articles in seniors periodicals lately. I understand that if you can keep one senior out of care for one year, the government will save $70,000. So these other things such as adult daycare, home support — things of this nature — in a community, in community services…. If you can give people the support they need, they don't want to go into facilities. As you know, it's very costly to have them in facilities.

R. Howard (Chair): Thank you very much, Audrey. We really appreciate you taking the time to show up and present to us this morning.

A. MacLise: Actually, we ordered a nicer day for you people, but the weather man is still looking for his summer vacation.

R. Howard (Chair): This isn't bad. It's not raining, so we'll take it.

Next up we have the city of Williams Lake — Mayor Kerry Cook.

Welcome, Mayor.

K. Cook: Good morning.

R. Howard (Chair): As you probably know, you have 15 minutes. At about ten I'll give you a heads-up, and you can either stop and take some questions or go straight through. Your choice.

K. Cook: The city of Williams Lake, as with all the other municipalities, is affected by budget and policy decisions of the provincial government. We just wanted to start off by saying thank you for the opportunity to provide input to the Finance Committee on the following areas of interest.

But before I get into those issues, I just wanted to personally thank you. We have recently received money from the provincial government — $3½ million for our Mackenzie Avenue rehabilitation — and greatly appreciate it. It allowed us to do $11 million worth of paving. We also received $3 million from CCBAC, and we really appreciate that as well.

We know how difficult your job is, and I just wanted to start off by saying thank you. And of course, our MLA Donna Barnett has served us very well over the last couple of years.

Issue No. 1: infrastructure funding. Williams Lake, like other communities in the province and across Canada, experiences a significant infrastructure deficit.
[ Page 1367 ]
Over the years the municipality has been fortunate to have received a range of provincial and federal grants to assist with infrastructure repairs and replacement. Unfortunately, opportunities for grants have diminished in recent years, which has resulted in the remaining programs being oversubscribed and difficult to obtain.

Many small and mid-size municipalities do not have the financial capacity to address their growing infrastructure deficits and rely heavily on support from higher levels of government. The city of Williams Lake respectfully requests the Finance Committee to consider the challenges of local governments in maintaining their critical infrastructure and expand infrastructure grant programs, particularly for small to mid-size communities.

At our recent Cariboo regional district board meeting last Friday, which has 15 board members representing four municipalities — 100 Mile, Williams Lake, Quesnel and Wells — we passed a resolution which supports as a regional district this very issue as well. We as a region are standing together and saying that this is that significant for us. So that's issue No. 1.

Issue No. 2. I want to start off with a little bit of background. As some of you know, Williams Lake has a population of 11,000, but we provide service to a population of around 25,000. We've got two mines that are currently in operation within our near vicinity — Gibraltar mines as well as Mount Polley. We've got two mines that are currently in the environmental assessment process, in the 90-day process with CEAA. So we've got Spanish Mountain Gold and Prosperity mines.

That's a little bit of the background. So this issue becomes even more of prime importance.

[1030]

Related to the issue of infrastructure funding, there are many interior and northern communities that support major resource extraction and industrial activity outside their boundaries. These communities are challenged with increased demands for services and infrastructure — roads — resulting from this activity with no opportunity to receive direct property taxation. Similar to the Fair Share agreement in the Peace River region, the province must consider a program for other regions of the province where the revenues generated by the resource industry are shared with those municipalities that are directly affected.

Resource revenue-sharing is critical in ensuring rural municipalities have the ability to maintain their infrastructure and provide the services that support the extraction activity that occurs on lands outside municipal boundaries. I know we've had previous discussions with different ministers over the years, as well, in direct relation to this particular topic.

Issue No. 3: funding of the judicial system. The city of Williams Lake has been made aware of possible reductions in funding for the provincial judicial system and, more specifically, reductions that will affect the service provided at the Williams Lake courts. Williams Lake experiences one of the highest crime rates and RCMP office caseloads in the province. Even though we've had some great success with reduction of crime over the last couple of years, reducing some of our crime stats 20 to 90 percent, this is still an issue of great concern.

The ability to approve charges and have matters heard before the courts is a critical component of addressing crime in our community. Unfortunately, the judicial service levels in Williams Lake cannot adequately address the incoming volume of charges and subsequent trials. The level of service provided by the judicial system in Williams Lake needs to increase, and any reduction of service is not acceptable and will be strongly opposed.

In fulfilling the families-first mandate of the current government, adequate resources must be provided to the judicial system so that those responsible for crimes in our communities are brought to justice in a timely and effective manner.

R. Howard (Chair): Excellent, Kerry. Thank you for that. On your infrastructure funding, we've heard from northern B.C. in particular, as we've been doing our preconsultation tour, about the road system. This infrastructure — can you be a little more specific? Are you speaking primarily of roads? Are you speaking of a whole host of infrastructure needs?

K. Cook: Well, there's a whole host. As I say, roads are of importance. We've got intersections that need to be upgraded and improved. As well, there are safety concerns there. I know we've got one that we've had some discussions on when Minister Bond was the Minister of Transportation. So there are a number of infrastructure requirements, but definitely roads take a priority.

D. Donaldson (Deputy Chair): Thank you, Mayor Cook. Good to see you again. I have two quick questions. One is specific and one a little more general. On the funding of the judicial system, we heard from other presenters around the increase in people representing themselves in the courts and how this not only bogs down the court system but also leads to increased costs, so your perceptions about whether you see that happening here as a direct result of decreasing legal aid.

The second question is more general about the…. We've talked in the past about the transition that's going to occur because of the falldown in the forest industry. Just curious as to whether you've seen any more…. When we talked before, there was no government support for working on the transition of workers as far as a general plan. Maybe you could update me on that topic as well.

K. Cook: We did receive some funding with a workers transition strategy and plan through CCBAC. So when
[ Page 1368 ]
we were hit the hardest in 2008-2009, we did have some funds. The group was able to provide some resources. Obviously, we know forestry is changing, and that's going to be a bigger concern as we walk through the changes. So CCBAC is maybe one tool. Obviously, it was there to mitigate the changes in the forest industry. Resources of any kind would help in re-educating and retraining.

D. Donaldson (Deputy Chair): On the legal question — on people self-representing?

[1035]

K. Cook: I know that the court system is not an easy fix. There are many, many aspects of that. What we're just saying is that a reduction at this time would not be helpful. We've got a lot of backloads of cases, and of course, the time it takes for our members to go to court and all the rest of it all adds up. So anything that we could do to improve the efficiency would be of benefit.

I can't answer how many people are going to be representing themselves. I can't respond to that part of the question.

B. Bennett: I appreciate what you said about MLA Barnett, because she's been relentless…

K. Cook: She sure has.

B. Bennett: …in advocating for this community.

I'm curious, as well, about the comments about the judicial system. Your comment in the presentation is that the city has been made aware of possible reductions. Then later there's reference to approving charges and having matters heard before the courts. That sounds to me like your concern is focused on the Crown's office.

K. Cook: Crown counsel office is definitely…. We do not want to see a reduction of services there.

B. Bennett: Have you been told that there is one coming?

K. Cook: We've been told that there's a possibility of some reductions.

B. Bennett: So your recommendation would be to, at the very least, not reduce the resources going to the Crown's office?

K. Cook: Exactly.

R. Howard (Chair): Excellent. Thank you, Mayor Cook. We really appreciate you taking the time to come out and present to us today.

K. Cook: Thank you for the opportunity.

R. Howard (Chair): Now to the committee, we have a couple of witnesses left, but they have not yet arrived. So we'll just have a little recess and wait for the next folks to show up.

The committee recessed from 10:37 a.m. to 10:56 a.m.

[R. Howard in the chair.]

R. Howard (Chair): All right, Members. I think we're ready to go. We've got everybody here that we need. Next up we have, from the Cariboo regional district, Al Richmond.

A. Richmond: Thank you, Mr. Chair, and we've brought with us today some handouts for you. I'm not going to speak directly to what we provide you with.

R. Howard (Chair): Before you start, Al, sorry, for the record, could you let us know who you have with you?

A. Richmond: I'm sorry. I'm Al Richmond. I'm chairman of the Cariboo regional district. In attendance with me is our administrator, Janis Bell.

R. Howard (Chair): Welcome, Janis.

J. Bell: Thanks.

R. Howard (Chair): So you have 15 minutes. At about ten minutes I'll give you a heads-up, and you can either stop for some questions, or you can keep going — your choice.

A. Richmond: I'd love to take your questions, because I'm sure there will be some.

Thank you very much, Mr. Chair, for taking the time to attend our region. Thank you so much to MLA Barnett for, I know, ensuring that you came here. Donna works very hard on our behalf, and we know that probably sometimes we get a lot of attention because of our representation in Victoria.

We have a joint letter that is signed by the four municipalities and regional districts with regards to our position and the needs for long-term, stable infrastructure funding. We know it is a difficult budget time, but we wanted to present, on behalf of the region, our position that infrastructure funding, of course, is key to survival of our communities.

I'd like to talk about finance, since you're talking about finance. I also included in the handout a recent release by Moody's. Of course, the challenges you as a committee and the government are going to face with regards to the HST issue…. Moody's is giving us a heads-up that they're going to be looking at rating agencies and credit ratings for the province as you work
[ Page 1369 ]
your way through this. I recognize, and I think most in local government — we're going to go into budgets as well — recognize the challenges that you as a government and as a Legislature are going to find in dealing with budgets and trying to find the new way forward, given the outcome of the HST referendum.

Certainly, one of the biggest problems we have in local government is our dependence on property-based taxation. It's a huge hurdle. It's not tied to the economy. It's artificial in some cases. We have challenges where we have properties, for example, on lakeshore that have artificially raised land values, and people are objecting to how they're taxed based on land and improvements. We find a challenge trying to balance that off.

There's not a direct correlation. On the other side we have industry, who are saying to us: "Gee, we can't afford the taxation levels." How do we do that moving forward and still provide to our communities the water, sewer and recreational facilities and health facilities we need?

We hope…. We proposed in a meeting with MLA Bennett and Minister Lekstrom that we need to move forward to finding some alternative revenue sources. One model we looked at, of course, is the Peace Fair Share agreement. I would suggest that we looked at, potentially…. Developments that happen — for example, say, a mine out in the Likely area…. There could be an agreement with the mine to fund some of the more urban services we need to provide in the way of recreation, water and sewer and, in some cases, roads for municipalities with huge challenges.

These developments take a considerable amount of infrastructure capacity from a community. Add to that, when you bring in people who live in a community, it puts further strain on the resources we have, including our health care. We would like to see work on a model where we could see a development go where a development needs to go, not where it goes for political expedience as sited within municipal boundaries.

[1100]

We think we've seen an end to some of the large developments and industrial developments within municipal boundaries, and now we need to find a way, when they're located in the regional district, that they're put in a location that makes sense. But there's a formula in place that would see those industries help fund the water, the sewer and the other things that we need to do as rural communities.

Many of the rural communities around the cities provide water, sewer and recreational services. When we pick those, we're talking about the areas where the populations are that put the demands on the services and sometimes where those folks who locate to the industry in the rural areas when they are outside municipal boundaries actually live.

We really haven't seen anything new in taxation from local government until the federal gas tax program came in. It has certainly been a real blessing to us to be able to, in the case recently, help pave an airport in Anahim Lake. Collectively, as a region, we put money together to see that project happen. Working with other levels of government, we've been able to find that without being property-based taxation, being able to move ahead with some of those large projects.

We also move ahead with clean air and water projects when communities need that, so we've used that funding to do that. So it's been put into infrastructure as well as other things to help our communities grow and provide better places for folks to live.

Of course, the infrastructure deficit continues to grow, and we know there are challenges around that. One of the things that I said at a committee right now that's looking at the water…. Given the Walkerton issue, the ministry is looking at what we have to do to change the water regulations to give our folks clean water.

One of the ironies that have come up about this is that there are many communities and many rural areas that don't have any treatment whatsoever. But we're focusing, because of the Walkerton issue — which was actually more of a relationship, if you know about Walkerton — more on the fact that there were rules and regulations in place that nobody followed. You can put more rules and regulations in place, but if you don't follow the ones you have, you're still going to have the same problems.

It's been estimated some years ago that it might cost up to $1.5 billion to do these upgrades, to change the water quality and follow some of the drinking water guidelines that we have. We would like the government to pause and think that maybe we might be better served by providing some treatment to some people who have no treatment whatsoever and improve their quality in their communities and not apply the money to communities that really don't have issues right now.

I think we all recognize that when we have a problem with water, we're going to have to deal with it. But we seem to be focused on large centres that don't have problems and require more barriers of service and more barriers to protect them from waterborne carcinogens. Yet, we're ignoring some smaller communities that just don't have the ability to get up and that have no filtration and no protection for their constituents.

We think that we'd like you to look at that. We're sitting here, in our community, just to the left of us, on the side of the hill here, called Mountview or Dog Creek Road. These folks need water and sewer. We've actually had it where the septic systems are getting into the groundwater, and we're having some cross-contamination.

That's a $19 million project. It's a huge project. We were told to break it apart and do it in phases, and we'll try to do that. But we recognize that money is tight. That combined with other demands from communities that want pools — because we can't attract health care professionals — or upgrading of recreational facilities….
[ Page 1370 ]

We all know that many years ago, when many industries located to our communities, they wanted facilities to attract their employees. The same appears today when we talk about health care professionals that want a certain standard they expect to have for their children when they move to a community. They want pools, and they want recreation. Those are challenges we face. Combined with people who want clean water, it's a balancing act. We need to identify our needs and our wants. Certainly, we need to do what we need before we do what we want.

We'd like to engage you, basically, in a discussion about how we could look at, for example, the hydro transmission lines which pass through our communities, which we receive no income from in the regional district. The municipalities do. The First Nations receive some compensation, but we don't.

We've suggested this in the past. There's a resolution coming up at UBCM. There was one a few years ago from Central Kootenay. There's one this year jointly from the Cariboo regional district and the regional district involving Kitimat-Stikine to ask the government to look at that.

It's not taking money out of your pocket. I think we have to recognize as well…. We've talked to you. We want stumpage, or we want some royalties. That takes money out of your folks' pocket that isn't going to help us either. The transfer of money without some responsibility doesn't necessarily work. We've got lots of it that we've taken.

[1105]

We'd encourage you to push back a bit to the feds when they try and transfer some responsibility to you without the money that comes along with it because realistically, there's one taxpayer. There's one wallet. There's one purse. It does no good whatsoever to solve one government's problem with budgets and transfer it to another one when they try and transfer some responsibility to you without the money that comes along with it.

Realistically, there's one taxpayer, there's one wallet, and there's one purse. It does no good whatsoever to solve one government's problem with budgets and transfer it to another one, because the same taxpayers are going to pay the brunt. So we have to find a better way to do jobs better.

We'd like to work with you. We've been very appreciative of the assistance the government has provided us in the recent fires we've had, the recent flooding issues we've had. That's why we are very cautious when we say: "We don't want to take your stumpage from you. We don't want to take revenue from you, but we'd like to find a way to share some of this stuff." We need to move forward, and we need to move ourselves off this property-based taxation.

We've also suggested a model for taxation — right now parcel tax, for example, where you apply to each parcel a certain rate. If you have a large operation, operating on one parcel, for example, we're going to charge you for a water surcharge of $200 a year, and we charge the guy downtown on a city lot $200.

We suggested that we would like to see a range of parcel tax allocation so that we could have some of the larger developments, the industry, pay a greater parcel tax than those who are on smaller city lots — get away from some of that assessment-based taxation rate and try to apply a mixture of some parcel tax, which might equalize the playing field just a bit, just as we feel it would equalize the playing field for the folks who are on waterfront properties who have high property assessment. If you're just charging a parcel tax, it equalizes immediately that every house is paying the same.

But without some of those lists we have with industry, which is taking some of the resources from our community…. If we could have a floating rate where we could increase some of those parcel tax rates, it would be helpful in trying to find a better mix in how we do business and taxation today.

With that, that pretty much concludes…. I think I learn more when I listen, so I thank you for listening to me. I'd be very interested in any comments you may have.

R. Howard (Chair): Thanks. Great, Al. We have some questions.

P. Pimm: Thank you. It's a great presentation. I hear quite a bit about Fair Share, and of course, I'm pretty close to Fair Share. Just one note on that is that Fair Share is actually a grant in lieu of taxation. It's not revenue-sharing. I just want to clear that up.

The question I've got for you is: is the Cariboo regional district in favour of Prosperity Mine moving forward to development stage as far as sharing revenues and that sort of thing goes?

A. Richmond: Yes, we are. We believe that the region needs it to proceed so it can benefit all communities. We've made that very clear.

D. Donaldson (Deputy Chair): It's good to see you again. Thanks for the presentation. Having been on a municipal council in a rural area for ten years and living in a regional district, I appreciate your comments about resource revenue-sharing.

The Fair Share program was primarily aimed at the gas sector, and the Columbia Basin Trust at the electrical generation sector. Both of those were brought in, in the late '90s, well over ten years ago. We've been hearing this theme a lot, but has the regional district given thought to how the resource revenue-sharing might work in a mining model? A thought to the incremental levy you mention here — would that be in connection to a commodity price
[ Page 1371 ]
into a connection of tonnage milled? Have you given any kinds of thoughts to the mechanism?

A. Richmond: We believe it could be as simple as the assessed value. For those of you who may not be aware, when you take a mine and you put it in a regional district, if it's outside certain levels, it doesn't pay for services — recreation, for example, or water and sewer. We believe that we could have an agreement that they would share in that, maybe through assessment. It could be through whatever options we choose. It could be options we choose. It's the success of the mine.

Right now they would pay for regional services. So they pay for our library services. They pay for administration services. They pay for garbage. They pay for a variety of things. But there's no mechanism to bring them in to help them pay for the recreation, for example, that those folks would want to use here in Williams Lake or 100 Mile or Quesnel.

So the intention would be to try and find a way, perhaps even through basic assessment property taxation, to bring them into those functions or those tax levies at an agreed-upon rate before they set up shop. So there'd be revenue-sharing amongst…. Once that's agreed, we'd share that revenue amongst those that are providing water and sewer and recreational services, just for examples.

[1110]

They will already pay into our hospitals. They'll pay into our libraries. They'll pay many of those regional services. But there's no ability right now to have them pay into the situation Williams Lake may find itself in with this and the people living around Williams Lake, who pay for recreation — a huge increase and a need to improve the infrastructure. So our goal is to find a way to work with….

Finding the mechanism to tax is one thing. Finding agreement amongst ourselves to share how the funding or the money is divvied up could be yet another challenge, but I think we're up for that. We just want to stop and end the fingers that go on when a municipality feels it needs to reach out and take this in, with providing those services. It takes away from the rural areas, from their development. We think that if we can find a formula to share, and I believe we can, then we can work this out and can find another source of revenue to augment what some of the urban areas are paying for some of these services.

B. Bennett: Thanks, Al. You and I have discussed this on numerous occasions, and you know that I'm supportive of finding some way of regional governments and local governments sharing in the benefits of resource extraction in their areas.

I would encourage you, and I guess in the form of a question…. Have you talked to the folks from the Elk Valley in my area about the Elk Valley tax-sharing agreement? It's an alternative to Fair Share. It works very, very well for Elkford, Sparwood and Fernie. They share taxes from the five coal mines and actually do very well from it.

A. Richmond: I had a short conversation with one elected official down there, but we haven't pushed forward. We actually had some discussions with the ministry. They came up a year ago, but with changes to the ministry now, we're not really sure where we're sitting about how we move forward with that.

There was interest from yourself and from Minister Lekstrom at the time, and then continuing on with some under…. I had a number of ministers. I'm just trying to catch up to the ministers we've had. But their staff has been up there. Mike Furey, the deputy minister, has now moved on. Mike was my main contact on that, so we're just sort of waiting to see how the reorg goes. We'll sit down and talk with those folks again. The Sparwood agreement is certainly something that we'd like to look at.

B. Bennett: I'd be happy to help you with that in any way I can.

A. Richmond: MLA Pimm, we are very aware of the fact. I know it's been stated that the Fair Share as it currently sits in the Peace is probably not sustainable. We use it as an example, not as the fact that we thought we were going to get the Fair Share agreement.

P. Pimm: It's a great model. It can work.

R. Howard (Chair): Excellent, Al. We've run out of time, so thank you for the presentation. Appreciate you taking advantage of the opportunity to come and talk to us.

A. Richmond: Thank you so much for coming to our community, and you're welcome anytime.

R. Howard (Chair): Next up we have Williams Lake and District Chamber of Commerce — Roger Solly.

Welcome, Roger. As you know, you've got about 15 minutes. I'll give you a little heads-up around ten. You can stop for questions, or you can keep going.

R. Solly: I expect I won't take the full 15 minutes.

Mr. Chairman, committee members and guests, thank you for the opportunity to speak to you today. The Williams Lake Chamber of Commerce supports the consultation process of the Select Standing Committee on Finance and Government Services. The opportunity to discuss with individuals such as yourself on a face-to-face basis certainly is beneficial from your perspective
[ Page 1372 ]
and, I think, the taxpayers in the business community and individuals as well.

I'd like to talk on HST transition issues. There will no doubt be many transition issues to be considered and transition rules to be developed before the reversion back to PST can be implemented. We believe it to be prudent to ensure that as many transitional issues as possible are announced in draft form prior to formal adoption so that businesses and their advisers may provide feedback to ensure a more seamless transition process.

On October 14, 2009, the Ministry of Finance published the general transition rules for British Columbia HST. We suggest that a similar approach should be followed several months prior to the reversion to PST.

Wherever possible, the new tax structure should have as much horizontal tax equity as possible. In other words, similar transactions should result in similar taxation. The current situation of private used car sales not being subject to HST, while dealer sales are, is an example of a lack of horizontal tax equity. This situation placed businesses at a competitive disadvantage.

[1115]

Another taxation tax issue is the treatment of work in progress. Costs accumulated prior to the transition date right now do not include any HST. If the project is completed and built after transition date, how will the PST be calculated? On the full job cost? Prorated? What if progress payments have been made?

These are all questions that should be answered so that both purchasers and vendors understand the process and can plan accordingly.

Some comments under general budget matters. B.C. is an exporter. Our forestry and mining producers primarily sell at world market rates, usually in U.S. dollars. These producers have minimal control over their selling prices. Consequently, they can only control their profitability through cost control practices.

The reversion back to a PST tax structure will mean an increase to their costs and a decrease in their ability to compete with producers from other provinces and countries that have a VAT system. Furthermore, the PST system of embedded costs will reduce corporate income tax revenues as it will reduce taxable income.

We suggest that economic policies incorporated in the provincial budget should encourage growth of businesses and employment. A healthy financial economy and healthy companies will generate more income and sales tax revenues. The goal should be to make the pie bigger, not the slice bigger.

If I may add a couple of items that I've thought about since then. With the HST, I alluded to the embedded nature of the PST, as opposed to the HST being a refundable tax to business and basically borne by the end user. I'm not sure if under the terms of the plebiscite, which we're all aware of, whether under a new PST system it could be converted from an embedded tax to a refundable tax structure.

I guess another comment with regard to PST is that because it's a tax on services as opposed to all products, a broadening of the tax base could result in a lower tax rate and still generate the same revenues that you as government and we as users of government services need.

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

P. Pimm: I think your assessment of that tax is one that should be considered. It's a good one.

You spoke of growth of business and employment in your presentation — and thank you for the presentation, by the way. You heard earlier that your regional district is in favour of Prosperity mine. Has the Williams Lake chamber taken a position on Prosperity mine?

R. Solly: Yes. The chamber's long been a supporter of it. In fact, five years ago, in 2006, I presented to the standing committee at that time. We were well in support of Prosperity at that time and encouraging the provincial environment assessment process to be favourable, which it was.

P. Pimm: So the RD, the chamber….

R. Solly: Yeah. Williams Lake chamber does support the Prosperity project.

D. Donaldson (Deputy Chair): Thanks for the presentation. I had a question for you about a topic that's been brought up today and in other places we've visited, around trades and the need for trades training.

Do you see that, with your members having a labour gap shortage in the trades areas? We've heard that in other areas as well.

R. Solly: Yes. Again, five years ago that was an issue as well. The predictions at that time, which I think were quite accurate…. There was a bit of a shortage in the trades area. Yes, I agree that it's an area that should be addressed. The apprenticeship program that is in place now for provincial taxation is helpful to try and encourage people to get into that.

J. Thornthwaite: Thank you for your presentation, and also thank you for your comments about the HST and suggestions as far as adjusting the PST when it comes back to us.

[1120]

I just have a comment about your suggestion on broadening of the tax base, given that that was one of the major reasons why the HST failed — because people thought they were getting taxed for more services. How would you suggest, being a member of the chamber or business
[ Page 1373 ]
community, as to how government could possibly go back to that scenario in broadening the tax base?

R. Solly: I know you're asking for the suggestion. In part it's a political issue, and I certainly recognize that. But the reality is that it could be argued that the PST structure as it was, was not a fair tax, because it's just a tax on services. Income tax is a broad-based tax on income and profits. But to have certain industries that are….

The majority of the industries and businesses and economic sectors are subject to a particular tax, and others aren't. That doesn't seem appropriate to me. That's why I'm making the suggestion. A broader tax base hits virtually all businesses with a lower tax rate so that certain businesses aren't generating more tax revenue than others.

M. Elmore: Thanks for your presentation. In terms of the needs for skilled tradespeople, I'm just interested to hear what the experience is from the members of the chamber around recruiting workers right across the different sectors. What's the status of that?

R. Solly: I don't have firsthand information from a lot of specific industries. But we have Thompson Rivers University here, which is involved in trades training. Trades training should be geared to the needs of particular areas. One area I'm thinking of…. I'm giving general answers because I wasn't anticipating your question. So I haven't got the specific feedback from individual areas.

Primarily, the thrust for trades training should be aimed on a regional basis, because it doesn't make sense to send people halfway across the province to be trained and then come back, because they might not.

R. Howard (Chair): Excellent. Thank you so much for the presentation and for taking the time to come out and visit with us today.

Next up we have the Hills Health Ranch — Patrick Corbett. Welcome.

P. Corbett: Thank you very much for having me, allowing me to come late. I apologize to each of you for my not being here at nine o'clock when I was supposed to be here. I really apologize to you for not being able to be here. I had an incident at our resort that I had to attend to.

R. Howard (Chair): That's all right, Patrick. There were other people here a little early, so we were able to proceed. We're glad you're here.

P. Corbett: Well, thank you.

R. Howard (Chair): You have 15 minutes. At about ten minutes I'll give you a heads-up, and you can stop and take some questions or push through — your choice.

P. Corbett: First of all, on behalf of the tourism region here of the Cariboo Chilcotin coast, I want to welcome you to Williams Lake. Thank you so much for including Williams Lake and our region in your travels.

What I'd like to do is to give you a bit of an overview, if I could, as to the general state of the tourism industry, with some references to the region here, and to try to summarize in a simple way where you can help us the most going forward.

The tourism industry, as you may already know or not know, has had some very difficult times. My wife and I started the Hills Health Ranch 27, 28 years ago. We're in our 27th year of operation, and before that I had built another resort and a large development, called the 108 Resort, in the 108 community.

So I've been in the region a long time and have been in the resort business for a long time. We've seen recessionary periods, but in my business career and lifetime I've never seen anything like what we're encountering at this time, and it started in mid-'08 for us.

[1125]

In my 28 years at the Hills, and prior to that in developing the 108, I never could forecast what was coming, because I just couldn't see that it could get that bad. But we are seeing it get that bad.

Revenues for us and revenues across many parts of the region are down. We're not talking single-digit numbers. We're not talking 10 percent, 15 percent, 20 percent. I know some places that are down as much as 40 percent from where their ten-year historic averages are. Those are pretty big numbers, pretty dramatic changes in the base of how some of the businesses are having to function.

With that as a bit of a backdrop, with the revenue collapse, what's gone on during this recessionary period will help you to grasp and understand some areas where we could use some help.

One of the things that came along our way was the HST. Of course, now that confusion has come back, and we're in a state of confusion with regard to taxation for the consumer. At the time, however, the HST and where we're at right now is a net cost increase to an all-inclusive resort. If you're selling an all-inclusive vacation, your net cost increase to the consumer has gone up very dramatically.

In our case, we sell a spa vacation and all-inclusive horseback vacations, and many of the ingredients contained in those all-inclusive packages before did not have any tax. Now they have tax within the HST. So at a time when revenue overall was collapsing, we had a new tax that, for the consumer, caused the prices to go up.

At the same time, shockingly to most of us across rural B.C. in our business, our property taxes shot up through the roof unexpectedly — no forewarning, no idea that this was coming. As our revenues were collapsing — 10, then 15, then 20 percent and more —
[ Page 1374 ]
property taxes actually went up last year. From '09 to '10 it went up 17 percent in our case, and I can tell you that in other cases they went up 25 percent when their revenues were collapsing. So we had that to contend with during this downturn.

When the minimum wage came along…. In our case, we don't have a lot of minimum-wage people except in the wintertime in our ski and snow operations. We have 16-year-old high school kids that have never worked before, and we give them a job on our small, little ski hill that we have and in snow removal of our two outdoor skating rinks and things like that. It's a ratcheting-up of the cost side, so we're going to have to pass that along to the customer, as well, on our lift ticket rates.

Overall, there's just been this layering of some extra costs at a time when revenues are collapsing. So you can imagine, if you were in my shoes or any other operator's shoes, you're in a real tight cash squeeze. I can tell you that in my entire business career I've not had the kind of financial pressure that I'm experiencing and have been experiencing now for three years, and it looks like we'll have another year of it to go.

Layer that in context, as well, with something that happened that was a disaster for many of us, we felt. That was the change in Tourism B.C. Allow me to speak as a pure, straight entrepreneur, a person in business that relies on a successful provincial marketing agency.

When that decision was made and the collapse of Tourism B.C. occurred, I can tell you, because I was there in boardrooms across the province, it sent and has continued to cause serious inability to properly focus on marketing of the province. We are dealing now more in how to survive than we are in how to properly market.

When we lost Tourism B.C. six months before the Olympics, without going into detail, I can tell you we lost opportunities. This is one of the areas where I would ask you to give serious assistance to us as an industry.

[1130]

We need to create a new provincial destination-marketing organization or, as we call it, a new PDMO. We know that Minister Bell is working towards that, and he's working with industry. What is vital here is that when the decision comes forward with Mr. Bell, we would ask for your support.

What are we looking for? We're looking for an industry-led, formula-funded organization that is independent of political-type interference, where it's an industry-led marketing decision based on where to spend money and how much to spend in certain markets and so forth. We think these should be private sector decisions.

If there are five words I could enshrine in your minds, they would be "industry-led and formula-funded." That's the hallmark of what we believe in. We did have that in Tourism B.C., but we understand that things change, things happen. Politics is what it is, and we lost it. We just need to get back to something. Whether it be an authority, an SOA, we need to get back to that kind of an industry-led organization. I would leave that with you.

The reason why it's important is that in isolation…. I have sat on the Crown corp of the Canadian Tourism Commission as a board member, and I sat on Tourism B.C. as a board member for a number of years, so I have experience around Crown corporations when it comes to tourism marketing. I continue to work at the CTC, or Canadian Tourism Commission, level.

If you don't have a strong front end, either in Canada or in British Columbia, and if that isn't really strong and focused, you're lost. The competition out there is unbelievable. The total travel within the tourism industry around the world is growing. Canada is diminishing, and British Columbia is having a hard time.

That's one of the key things that I would ask for your support on going forward. I want to also, maybe, just leave a couple of other thoughts with you, if I might. Have I got about three minutes to go?

R. Howard (Chair): You've got six, in total.

P. Corbett: Okay. A couple of other things that would be rather important for us. Duffey Lake Road. As far as rural B.C., we need to connect Whistler and the Lower Mainland through Whistler into the rest of B.C. by continuing the upgrades. We appreciate the upgrades that have been done to Duffey Lake, but I can tell you as a tourism marketer and operator that we need that road to continuously be upgraded. It is a critical piece of our infrastructure in getting people into this region.

The B.C. Rail tracks. I think the experiment in having worked with Rocky Mountain Rail Tours has been a good experiment, but it's time to take a look at the rail tracks. There's an opportunity, a tremendous economic driver opportunity, in inviting VIA Rail to come onto those tracks, along with — if Rocky Mountain wishes to stay or not….

I can tell you as an operator that we desperately need those tracks used, if it's VIA Rail and if they're interested. Certainly I've talked with them. There is an interest there. What we need is you folks to give us some help. I'm asking if you would also give consideration to assisting us to invite VIA Rail onto the B.C. Rail tracks.

Lastly, I just encourage you to give support to the creation of a new provincial destination-marketing organization — really important to all of us with money invested and large capital at risk. Thank you so much for allowing me to speak, and thank you so much for allowing me to be late today.

R. Howard (Chair): Thanks, Patrick. We have one question from MLA Bennett.

B. Bennett: Thank you, Patrick. I have 22 years in the tourism industry, the resort industry, before I was crazy
[ Page 1375 ]
enough to become a lawyer and then a politician. And hearing you today, maybe I shouldn't miss it as much as I do. But I want you to know that personally I agree with everything that you just said. I hope you see government moving towards the creation of the kind of marketing agency that you envision, something very similar to what we had before.

Are you on Minister Bell's advisory committee?

[1135]

P. Corbett: No, I'm not. But I've had meetings with Mr. Bell, and I have confidence that he is moving in this direction. Premier Clark has indicated support as well.

B. Bennett: Right. This brain trust of provincial marketing expertise, which you say in your presentation is leaving — tell me about that.

P. Corbett: Within the ministry, after Tourism B.C. was absorbed into the ministry, there has been a huge exodus. Some of the brightest within that organization have left.

B. Bennett: Left the province or gone into the private sector?

P. Corbett: They've gone into the private sector. Some have left the province. Some of the real key people have left.

D. Donaldson (Deputy Chair): Thanks for your presentation. I myself, as well, have been involved in the tourism industry in fits and starts in the past. I also have followed your Hills ranch. Congratulations on hanging in there and on setting some good standards.

How much of your clientele is impacted by a foreign destination-marketing organization? In other words, how many come from outside the boundaries of B.C.? And how has that played into the mix of the revenue drop that you're seeing?

P. Corbett: We rely heavily on the European marketplace. We were also relying heavily on the U.S. marketplace. The U.S. historically, up until 2007, accounted for 15 percent of our gross. The markets outside of British Columbia have always been critical to us at 15 to 20 percent of our gross. So the role of Tourism B.C. was vital to those markets.

In the case of the region, about 55 percent of our business in total would come from B.C. residents, and the key marketing agency that we partner with is our regional association. We've historically had tremendous reliance upon the ability of the regional association to have the financial punch to create an impact in the marketplace to attract the B.C. resident.

I can just add that the B.C. resident outbound travel out of YVR is, as you may have been tracking, huge numbers. There's huge growth of outbound travel going out of YVR. Good for them, but what that is, is B.C. residents leaving British Columbia and Canada and going elsewhere.

If we could do a marketing investment — and I think it's best done through the regions — to reverse that travel deficit and keep B.C. residents at home, it would bring millions of dollars or retain millions upon millions of dollars within the province. It's a travel deficit issue. When we hear the celebration at YVR that their outbound travel is high, we are all shuddering when we hear that.

R. Howard (Chair): One last quick question.

P. Pimm: I'm glad you got your issues resolved this morning and that you're here in one piece and everything worked out okay. I do have some questions around the outgoing traffic from the province. I wonder how much of that can be attributed to the downturn in the economy. I think you said 15 percent of your stuff was from the United States in '07. How much of your market is United States today? And just from a general consensus, I mean people…. The value of the dollar as well, being par or worse — how much has that affected things?

P. Corbett: The dollar has definitely been a negative impact upon our business, and it's one of the reasons why Canadians and B.C. residents are travelling the world. Our dollar buys more in some foreign markets. Where the U.S. market now is about 5 percent, comparing to the 15 percent that we used to have, I can tell you that in '10 it was even worse than that. We are seeing a recovery out of U.S. markets this year, and it's all from e-marketing-based strategies that are creating some effect there.

We're hoping for a rebound in the U.S. market, and we're hoping to retain…. We would love to try to work through the regions and with the ministry or a new PDMO to retain the B.C. resident who is exiting heavily out of the country. It would really turn around some baseline numbers for all of us, I believe.

[1140]

R. Howard (Chair): Excellent. Thank you, Patrick. We've run out of time. I'm glad you made it here eventually, and I appreciate the time you took to get here and the extra effort, it sounds like.

P. Corbett: Thank you very much for this opportunity.

R. Howard (Chair): We will adjourn now and reconvene this afternoon at four o'clock in Kamloops. Thank you, Williams Lake.

The committee adjourned at 11:41 a.m.

[ Return to: Finance and Government Services Committee Home Page ]

Hansard Services publishes transcripts both in print and on the Internet.
Chamber debates are broadcast on television and webcast on the Internet.
Question Period podcasts are available on the Internet.

Copyright © 2011: British Columbia Hansard Services, Victoria, British Columbia, Canada