Legislative Session: Fourth Session, 39th Parliament
Select Standing Committee on Finance and Government Services
This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report. Use of this transcript, other than in the legislative precinct, is not protected by parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal liability.
REPORT OF PROCEEDINGS
FINANCE AND GOVERNMENT SERVICES
WEDNESDAY, OCTOBER 17, 2012
The committee met at 3:01 p.m.
[D. Horne in the chair.]
D. Horne (Chair): Good afternoon, everyone. I'm Douglas Horne. I'm the MLA for Coquitlam–Burke Mountain and the Chair of the Select Standing Committee on Finance and Government Services, as well as the Parliamentary Secretary to the Premier of British Columbia. This is an all-party parliamentary committee of the Legislative Assembly, whose mandate includes conducting annual public consultations for the upcoming provincial budget.
I'd like to welcome everyone in the audience, and thank you for taking time to participate in this important process. Every year in preparation for the next year's budget the Minister of Finance releases a budget consultation paper. This paper presents the fiscal and economic forecast and identifies key issues that need to be addressed in the next provincial budget. Copies of the Budget 2013 consultation paper are available on the table at the side, and you can pick one up and go through it.
Once the paper is released, the committee holds public consultation and invites input from British Columbians. Following the consultation period, this committee releases a report containing a series of recommendations for the upcoming budget. This report must be presented to the Legislative Assembly no later than November 15.
There are several ways for British Columbians to participate. This year the committee is scheduled to hold 18 public meetings in communities throughout British Columbia. We've already held meetings in Surrey, Castlegar, Cranbrook, Kelowna, Vernon, Vancouver, Coquitlam, Abbotsford, Fort St. John, Quesnel, Kamloops, Prince Rupert, Kitimat, Smithers, Prince George — and Courtenay this morning. As I read that…. Many of those were in the last week.
We also held video conferencing hearings with Dawson Creek, Fort Nelson and Salmon Arm. After today's meeting we'll hold our final meeting tomorrow in Victoria, and then we will move to our deliberations.
In addition to the public hearings, British Columbians can also share their ideas by sending a written submission through our on-line forum on our website. We also accept e-mail, letter or fax, along with video or audio files.
As well, we have a short on-line survey on our website, which is located at www.leg.bc.ca./budgetconsultations. There you will find the information on the consultation process. You can actually download a copy of the consultation paper, as well, and learn more about the work of the committee.
All public input we receive is fully considered, and the deadline for submissions is tomorrow, Thursday, October 18.
I'd like to start the meeting by having the members introduce themselves. We'll mix this up for a change. I'll start with the Deputy Chair, Mable Elmore.
M. Elmore (Deputy Chair): Mable Elmore, MLA for Vancouver-Kensington and the Deputy Chair of the committee.
B. Ralston: Bruce Ralston, MLA, Surrey-Whalley.
G. Coons: Gary Coons, MLA for the North Coast. I live in Prince Rupert.
J. Les: John Les, MLA for Chilliwack.
D. Hayer: Dave Hayer, MLA for Surrey-Tynehead. That's where the widest bridge in the world is — the Port Mann Bridge.
Thank you very much for coming over.
M. Dalton: Marc Dalton, MLA for Maple Ridge–Mission, and it's great to be here.
P. Pimm: Pat Pimm, MLA for Peace River North. I live in Fort St. John.
J. Slater: Good afternoon. My name is John Slater. I'm the MLA for Boundary-Similkameen, and I live in Osoyoos.
D. Horne (Chair): Also joining us today from the parliamentary committees office is our Clerk, Susan Sourial, who's sitting to my left, along with Stephanie Raymond, who is at the back. We also have Jean Medland and Steve Gullickson from Hansard Services, who are here on my right.
At today's meeting each presenter may speak for up to ten minutes, with five additional minutes allocated for questions from committee members. Today's meeting is a public hearing which will be recorded and transcribed by Hansard Services. That's why Jean and Steve are here. A copy of the transcript along with minutes will be printed and made available on the committee's website. In addition to the transcript the audio webcast of the meeting will also be posted on the committee's website.
Without further ado, we will call our first presenter, who is Jordan Bateman from the Canadian Taxpayers Federation. Jordan, welcome to the committee. You have ten minutes to present, followed by five minutes of questions. Your time begins now.
J. Bateman: Thank you for having me, Mr. Chairman. I know that this is the penultimate day for you folks travelling the province. It's a bit like a rock star world tour but without all the excitement, I guess. Thank you for it.
It is an important process, and I've been following the Hansard and seeing exactly the kind of presentations you're getting around the province. When it comes to input provincially, this is really unique and probably a model that we should look at for other issues as well.
Our presentation — I've provided you each with a copy. The number one priority for us at the Canadian Taxpayers Federation is balancing the budget. We cannot understate the importance of this to our supporters across B.C. We feel like, in a post-HST British Columbia, it is very important for our economic competitiveness that we balance the budget.
This will actually help us to stand, as one of only two provinces in Canada, with that balanced budget next year. It gives us a step up on the competition. It shows people that the government of British Columbia is willing to make the tough choices and fiscal responsibility that's necessary in order to balance the budget. We think that's very attractive to industries coming here and to people who create jobs and employ our British Columbians, and whatnot.
The bottom line for us is that we don't feel like we can continue to live on government's credit cards. Even a small percentage deficit is still sliding backwards. Already we pay six or seven cents per dollar in interest. That obviously limits our purchasing power now. That's debt we've accumulated from previous generations. We're sending that debt on to future generations. We want to make sure that we're stirring those resources properly.
For that reason, that's why when we recommend that we kill the carbon tax, we also make the tough decision as an organization talking with our supporters across B.C. that we would be willing to kill the revenue-neutral tools with it. It's not ideal. Ideally, we'd find a way to keep the $228 million personal income tax cut.
Surveying our supporters, talking to them across B.C., most people feel like they're sliding backwards when it comes to the carbon tax, and they're right. If you look at the percentage when the carbon tax was introduced, we got about a third of that money back in personal income tax cuts. Now it's about 17 percent. That share of that income tax cut has shrunk as compared to what we're paying in carbon tax.
The other carbon tax — you're absolutely correct — is revenue-neutral. That money does come back to various groups in different forms. But the average guy filling up their tank or heating their house doesn't feel like they can access $38 million in digital media tax credits, for example. This is where the fairness issue comes in. So the carbon tax is one of our top priorities.
Two programs we think are worth rethinking this time around are the Pacific Carbon Trust and the childhood education fund. The trust, a lot of us have been writing about, talking about. Even some of the noted environmentalists are pretty unhappy with how it's unfolded, taking money out of classrooms, out of hospital rooms, out of government itself and putting it into, essentially, corporate welfare projects.
The Vancouver Sun reports 22 to 25 of them would have happened without trust involvement anyways. That's really kind of worrisome to us. It's $14 million, not a huge amount in the grand scheme of things, but when we're this close to balancing the budget, every penny is going to count.
The other one that doesn't get a lot of mention is the childhood education fund. I'll forgive you if you don't recall it off the top of your heads. The childhood education fund was started in 2007. It's on page 16 of my submission. Essentially, government said: "We're going to put a thousand bucks aside for every child born after whatever date in 2007, and they can get that money when they go to post-secondary, beginning in 2025."
I have kids on both sides of that divide. I have two kids who were born before '07, and I have one kid who was born after. I can tell you that there was no documentation from the hospital, nothing from the government mentioning it to me. If you didn't actually study the budget or happen to be in the room when that announcement was made, you have no idea about it.
We find now, estimates tell us, that there is about $285 million in that account. That account now generates about $20 million a year in interest. Government now puts in about $40 million on top of that. Our suggestion to try to get this budget balanced would be to freeze that program and take the $60 million — the $20 million in interest that is now being made by that fund and the $40 million that government pays in every year — and use it for things like education, post-secondary education, job skills training, balancing the budget.
These are the things that I think will actually help post-secondary students even more in 2025. My little guy would be greatly helped if I have a good job, if there's good work to go into, if schools are healthy now. There's no point, really, setting this money aside when there are other issues in the meantime that we need to address. So that's one that doesn't get a lot of play, but we wanted to point it out to you as well.
The final thing is public sector bargaining. We were great supporters of net zero. I would like to see better clarification of the cooperative gains mandate.
We've seen a couple of agreements signed under that now, but the cooperative gains side of it is pretty nebulous. We're not really sure exactly what government has identified as cost savings. We propose a compensation equity act in here.
One of the other things we propose is opening the dialogue with UBCM to include local governments in provincial wage mandates. What we saw pre-Olympics…. I was a councillor in Langley, so I'm guilty of this. Pre-Olympics, municipalities felt the pressure to settle with their public sector unions in order to get peace through the Olympics, so we followed the provincial government's wage mandate. Obviously, boom times for the economy. Pretty generous raises given out: 18 percent over five years, $4,000 signing bonuses — the whole thing.
Sadly, when the provincial government moved to net zero for two years, municipalities didn't even consider it. There isn't a municipality in the province that's seriously talking about net zero.
If there was some way to tie these kinds of mandates together…. The cost of employing people at municipal hall drives up the cost of employing people in Victoria, because people look across these government sectors. This is a discussion we need to have with the Union of B.C. Municipalities to see if there is a way to tie these two wage mandates together.
Those are some of our ideas for this year. We appreciate it, and if you have any questions, I'm happy to answer.
D. Horne (Chair): Thank you for your presentation. We'll start our questions with John Les.
J. Les: Thanks, Jordan, for coming to the committee and sharing your brief with us. I appreciate it very much. I agree with many, perhaps not all, of the suggestions you make. I'm sure you're not that surprised.
Just quickly scanning through your longer presentation here, you have a section that deals with equalization. I'm sure this must be a misprint. Your exhortation to us is to follow the European example. Excuse me?
J. Bateman: The modern European example, not the one that got them into this mess.
J. Les: But which one would you like us to follow: Greece, Italy, Spain or who?
J. Bateman: If you look at what the eurozone is doing now in order to get these free-spending countries out of debt, they're basically passing laws saying that they don't get these bailouts unless they pass laws and actually are fiscally responsible going forward.
We have these issues going on. Ontario has a deficit now that is larger than Canada's as a nation. We have Quebec which, obviously, I think all of us agree, spends money in very interesting and exciting ways, none of which are affordable long term.
Quebec has already put together hundreds of pages of documentation on equalization. They are leading the country in making their case. I don't see that same kind of stuff coming out of British Columbia. It might be, but we haven't seen it.
Quebec's are included in their budget briefs, and they're making the case for more of B.C.'s, more of Alberta's, more of Saskatchewan's money. We need to make a similar case saying: "Enough is enough." Let's start talking about what equalization actually means constitutionally, and let's make sure that British Columbia's interests are protected.
What Germany and these other countries have led now in Europe is a model. What happened now is the model, not what's happened in the past. It's one way of looking at the situation. The bottom line is that we need to start getting research together as a province and make sure our case is being pled.
J. Les: Far be it for me to give you advice, but I would not use the European analogy. That story has not yet played out.
As far as equalization is concerned, there's one very simple prescription: forget about it. There is no constitutional necessity for an equalization program. Equalization is not fair to the donor provinces, nor is it actually fair to the receiving provinces. There is not any evidence that it helps their economy long term.
J. Bateman: Exactly. We 100 percent agree. We need to make sure British Columbia is producing that evidence to show the other provinces and the federal government.
B. Ralston: Thanks very much. Always a lively presentation, Jordan.
Little bit curious about some of the suggestions that you make and their cumulative impact on the deficit. You say to get rid of the MSP premiums. That's $2.1 billion. Get rid of the carbon tax. That's $1.2 billion. Sell off the liquor stores, which make about $900 million a year. So that's $4.2 billion. Add on the deficit of maybe $5.2…. Round it off at $5 billion. Yet you say you want to balance.
Basically, you're suggesting cutting over 10 percent of the provincial budget. Now, I'd be interested in your suggestions as to how that would be attained in one year.
J. Bateman: Sure. Carbon tax doesn't count, because we say to get rid of the revenue neutrality tools as well. That takes that $1.2 billion off the table there. That's one of the reasons why….
B. Ralston: Okay, well, we're down to $4 billion, then.
J. Bateman: MSP, we see as a longer-term priority. Ideally, this year what we'd see is a freeze in MSP rates. MSP is growing at a very difficult rate — three times the rate of inflation. That is very tough on families.
I pay MSP. I know it's tough on families. You get that bill for $128 a month, and it's going to go up to $134 a month next year. That is a lot of money for a family to try to cope with. Even a freeze on MSP would help.
Longer term, we need to look at: is the MSP program the best way to collect this money? Obviously, if you make $30,001 dollars or if you make Henrik Sedin money — $6 million a year — you pay the same in MSP premiums. That probably fails the test of fairness. These are the kinds of things we need to talk about.
Some of the issues in here are short term, some are longer term. MSP would be long term. Ratcheting down, for example, government's reliance on Crown corporation revenues would also be a longer-term goal. The bottom line here is that nothing happens in government without a long-term plan or strategy or goal set out, and we need to start talking about what those are.
D. Hayer: Thank you very much. A very good presentation, Jordan. My question is about balancing the budget. I understand when you're saying to maybe cut $4.2 billion in expenses in the revenue from carbon tax that it will balance itself, because you also cut the tax cuts we had received in the past — right?
The second part is from the MSP premiums. Some people in these hearings and also some of the people from the NDP have suggested that maybe to generate more revenue, we should be increasing corporate income taxes and maybe taxes on people making $75,000 or $100,000 or more, etc.
Do you think if we increase the corporate income tax and the taxes on the people making more than $70,000 or so…? Will that generate more revenue to balance the budget? Or will that have a negative effect overall on the revenues of the provincial government? By increasing the tax, maybe the investment will go away? Or will more investment come in if we increase the taxes?
J. Bateman: The interesting thing about the corporate tax rate tied to the carbon tax is that it does anticipate an increase in corporate income tax from 10 percent to 10½ and then to 11 percent over the coming years. Government already is saying: "Okay, we need to make sure that we're extracting enough revenue in order to fund programs and whatnot." Government's already made that decision.
Scrapping the carbon tax and those neutral tools is, obviously…. You're getting rid of one tax, but you're increasing, for the average person, two or three others. Still, the people we talk to, our supporters, say they feel they would be better off without the carbon tax and with those extra tax increases. But you wouldn't want to do both. You wouldn't want to get rid of the carbon tax and still increase taxes even further on top of that, because you would slow economic growth.
We do believe, though, that if you got rid of the carbon tax, you would see benefits to the economy. As we know from the income tax cut in 2001, revenues do increase even after you cut taxes, because it does create economic growth. There are possibilities there, for sure.
D. Hayer: But some other people have said that cutting, the 30 to 40 percent tax cut in 2001 and later on, was too much. Maybe it's time to reverse it, to go backward. If we go backward on those tax cuts, do you think that will be better for the economy or worse for economy?
J. Bateman: We are the Canadian Taxpayers Federation. We stand for lower taxes, so we would not approve of increasing taxes.
D. Horne (Chair): I need to move on now. We'll have a final question from Pat Pimm.
P. Pimm: Thanks, Jordan, for your presentation. I'm going to go to carbon tax a little bit. I come from a region of the province that kind of shares your thoughts on it. I think I read something about that the other day.
I want to know, when you talk about…. You're saying: "Scrap the tax. Increase the taxes back to the levels of 2008." Is that what you're saying?
J. Bateman: We're saying take the three pages in the budget that outline the revenue neutrality tools and take those out, essentially. That was a big debate, internally, for us.
P. Pimm: So that's the homeowners grant for the northern residents. That's the low-income grant. That's the tax credit for schools. That's everything.
J. Bateman: Yeah. That's the industrial school tax credit. That's digital media. We've looked through it all, and our feeling is most people would be better off.
P. Pimm: One last point. Did you present to the Finance Minister on that issue?
J. Bateman: I did, and I anticipated this question, because I've been reading the notes.
I do have one concern about that whole process. It was very concerning when the Ministers of Environment and Finance both came out, with two weeks left, and told us that the tax was staying, no matter what. I would have liked to have at least let the public consultation process finish before we started making decisions about the future of the carbon tax.
D. Horne (Chair): Thank you so much for your presentation.
I'll now call our next witness, who is Gretchen Hartley from the Cowichan Valley Hospice Society. Gretchen, welcome to the committee. You have ten minutes to present, and your time begins now.
G. Hartley: Great. Thank you for the opportunity to speak to you folks. I'm the executive director of Cowichan Valley Hospice, but I'm also representing Vancouver Island Federation of Hospices today.
I'm sure you guys are getting a little bit weary at the end of a long road show, but this is important stuff.
You matter because you are. You matter to the last moment of your life. We'll do all we can to help you live until you die. This is a hospice palliative care philosophy, but is it reflected in the care that dying and grieving people receive across Vancouver Island? Are we caring for dying and grieving people as though they really matter?
I think that at Cowichan Valley Hospice we do. We've been serving the people of the Cowichan region since 1981, and last year our 120 skilled and trained volunteers and almost four full staff provided care to over 700 people. These are people facing advancing illness, caring for those who are dying and grieving the death of a loved one.
Hospice staff and volunteers provide psychosocial care. We collaborate in our community, in the hospital and in residential care facilities with those providing the medical aspects of end-of-life care. We receive referrals from physicians, community and hospital nurses, medical health staff, community agencies, police, faith organizations, lots of self-referrals.
Last year Cowichan Valley Hospice volunteers provided almost 13,000 hours of service, which is a value of more than $200,000 when calculated at a nominal $16.50 an hour. In addition, 73 percent of our over $300,000 budget comes from the Cowichan communities each year.
We collaborate and innovate to stretch each dollar. This past year, for example, recognizing a gap in service, we took steps to address the potentially devastating impact on a child of losing a parent or losing a sibling. We partnered with a local youth-serving agency, Community Options Society, to provide Cowichan' s first bereavement support group for youth and children. This group really is an investment in future community health.
The communities in the Cowichan region have faced a terrible toll in recent years as a result of suicide deaths. We've partnered with the mid-Island crisis society for training that's allowed us to offer a bereavement support group this fall, and it's only one of two on the whole Vancouver Island. So we're serving people coming up from Victoria and travelling down from Nanaimo. I've attached a list of some of our other services.
The Vancouver Island Federation of Hospices brings together eight Island hospices to provide a voice for people dealing with advancing illness and grief across the Island. Collectively, in 2010 we provided volunteer services worth just about $2 million when we calculated that same $16.50 an hour figure.
Island communities care about their hospices and contributed $4.3 million in 2010 to keep our doors open. In contrast, in 2010 the Vancouver Island Health Authority provided one-time funding that amounted to $80,300, which was shared between those eight hospices north of Victoria.
This year community hospices received an additional $4,000 from VIHA to provide community education on advanced care planning, because we believe that good advanced planning for health care can significantly improve people's experiences at the end of their lives. It also may prevent intrusive, expensive and inappropriate care, but only if the appropriate services are available to support good palliative care.
I recently started a conversation with a family member about the type of care she'd like to receive at the end of her life, and I was surprised that the first thing she talked about was her interest in assisted suicide should she become ill. It turns out that it's her fear of dying with unmanageable pain that takes her there so quickly. When I told her that good palliative care means that your pain would be under control, she said: "Well, how do you know you'd get good palliative care?" The question stopped me in my tracks.
I assured her that I would advocate for excellent care for her, but the reality is, in the Cowichan region as in the rest of the Island, we have no assurance that a family physician will have a good training in palliative medicine and understand the appropriate use of opiates, for example, in end-of-life care.
We have no assurance that staff in our busy hospital will have the capacity to provide good palliative care for her when she's in bed in a busy medical ward. Outside Victoria we have no control over whether someone we love will spend their final days in a mixed-gender, four-bed ward or even in an overflow room at the emergency.
It's frightening when advanced care conversation turns to talk of assisted suicide simply because there's no assurance that the right care will be available when we need it. We have many skilled and caring professionals in our hospital and community. We have a hospital administration that supports a hospice, palliative care approach to end-of-life care. However, the resources to provide this care are very limited.
Our hospital is over-census most days. The overcrowding that results does not provide optimal care for the dying. On some occasions, even after a death, the only choice for a family to say goodbye to their loved one may be to sit with them in a four-bed ward. Although in Cowichan we have a higher rate of people dying at home than anywhere else on the Island, we believe that this often reflects a lack of alternatives rather than the choice of the best location for care.
Like most parts of the Island, residential hospice care is not an option in Cowichan, and residential care of any type is in short supply. With the lack of alternatives, caregiver burnout and ill health are a given. When caregivers can't cope, patients end up in overcrowded emergency rooms. This is an expensive and inappropriate way to care for the dying.
I should also mention that there's been some talk afoot in our health region of converting some residential care beds to hospice, palliative care beds. Really, this is a kind of sleight of hand that may, in the long run, not benefit our community as much as it might. I'll simply remind you that there were excellent recommendations made in the 2006 Provincial Framework for End-of-Life Care. We have yet to see the action on those.
Meanwhile, on the Island we have one of the oldest demographics in the province. Interestingly, although we all fear the overall health care costs that an aging population will produce, in an article in the Province last fall Kim McGrail pointed to a B.C. study showing that the average spending on health care services is six times higher for older people who die in the year than older people who simply carry on living. That's $36,000 instead of just $6,000.
Half of that extra cost in that last year is for hospital care. Perhaps the real cost of aging that we should be concerned about is the cost of not providing appropriate care for the dying. For someone who does not need acute care at the end of life, a hospital is not the right place to die. The care provided may be neither appropriate nor cost-effective. For those who do need acute symptom management, a palliative approach is key, wherever the setting.
People in our communities need a whole continuum of care that's appropriate. We need excellent 24-7 support for caregivers providing care at home. Hospice residential care in a homelike setting supported by skilled staff and volunteers for those not requiring that acute hospital care but can't be cared for at home is also necessary. Good palliative care, exquisite symptom management — whether provided in a hospital palliative care setting or in a residential care facility or at home — is critical.
Good palliative care, of course, is care for the whole person. It's emotional, it's physical care, of course, but it's also social and spiritual care. All of those aspects of care must be available in all settings. No matter where they live, let's care for the dying people in our communities and those who love and care for them as though they really do matter.
Our recommendations. Time to dust off and implement the provincial end-of-life strategy and action plan. I urge you to act on the recommendations that this committee made last year to acknowledge the importance of end-of-life services within the medical care structure; provide equitable support to in-home hospice care, hospice houses and palliative care facilities across the province; and recognize the valuable contributions made by volunteers in this area.
D. Horne (Chair): Gretchen, you have around a minute left. I just thought I'd let you know.
G. Hartley: Thank you.
I also urge you to direct a modest investment in core funding through the Vancouver Island Health Authority for community hospices.
This will provide a secure base for the compassionate and critically important care provided by hospice volunteers and their communities. Currently, community hospitals in Fraser Health receive about $50,000. You might be interested in knowing base funding.
Investment in end-of-life care is a powerful investment in a healthy community, providing comfort, dignity and well-being for people through the end of their days, supporting caregivers' capacity to care and to remain well and promoting good physical and mental health through bereavement. We can't afford not to do it.
D. Horne (Chair): Thanks so much for your presentation. We'll start our questions with Gary.
G. Coons: Thank you so much, Gretchen. Yeah, we've heard a lot about hospices on the Island. We had Comox and Campbell River present this morning. It seems that the end-of-life strategy and action plan need to be dusted off. I think that is something that we need to look at.
I do notice that you mentioned your budget was about $300,000, and 73 percent of that comes from the Cowichan community. I'm just wondering what the provincial budget part, the Island Health part is. You did mention that Fraser Health receives $50,000 for each of their community hospices. Is that right? How much do you get?
G. Hartley: We get one-time funding from VIHA. It was about $12,000 for a number of years. This year we got an additional piece of funding of about $4,000 for advance care planning. That $80,500 figure is shared amongst the Island hospices.
We also receive gaming funding. My hospice gets about $70,000 — which, of course, we have to apply for each year. There's never a guarantee.
G. Coons: It sounds like, if I can continue it, there's a real disconnect with Victoria. The other eight or nine hospices on the Island are really disconnected, and there's a real disparity between how much they get from Vancouver Island….
G. Hartley: I wouldn't say we're disconnected from that hospice, because we work with them. They're a great source of education and training and support. However, there's a real disparity in the service that people receive, whether they live in Victoria or whether they live outside Victoria.
M. Elmore (Deputy Chair): Hi, Gretchen. Thanks for your presentation. How many hospice beds or end-of-life beds are available in the Cowichan Valley?
G. Hartley: There are no residential hospice beds. There are three beds spread in different care facilities that can be used for end-of-life care. Only one of them is reserved for end-of-life care. The other two are sometimes available and sometimes not. Sometimes they're used as emergency residential care beds.
There are no particularly palliative-trained staff or any kind of palliative care focus in those facilities. It's simply that that bed is designated as accessible to the community.
M. Elmore (Deputy Chair): Do your volunteers support individuals and families who, just because of necessity, have to utilize those beds?
G. Hartley: Absolutely. Our volunteers work with people no matter where they are — in the hospital, at home, residents of long-term-care facilities.
M. Elmore (Deputy Chair): Do you have a specific budget number that you're requesting in terms of the lift to your budget?
G. Hartley: As a core piece of funding, $50,000, we think, would be modest, but it would make a huge difference in terms of core support.
M. Elmore (Deputy Chair): So $50,000 a year?
G. Hartley: Yes, for the Island hospices — each.
M. Elmore (Deputy Chair): For the Island...
G. Hartley: …hospices, individually.
M. Elmore (Deputy Chair): Each of them.
G. Hartley: Each of them. Not for the whole Island.
M. Elmore (Deputy Chair): Okay, so $400,000 total.
G. Hartley: Yes. Thanks for clarifying that.
D. Horne (Chair): Thanks so much for your presentation today.
I'll now call our next presenter. Our next presenter will be the Nanaimo District Teachers Association, represented by Justin Green.
Justin, welcome to the committee. You have ten minutes to present. Your time begins now.
J. Green: Before you get the handouts.
I had anticipated doing a PowerPoint presentation, but obviously that doesn't happen. But there are the slides that are available for you, and I will provide the notes after this presentation today, for your use.
Today I'd like to cover off four main points. First off is having a look at the prevalence of poverty and mental illness in children in British Columbia and, specifically, in Nanaimo. I'd like to do a statistical comparison across B.C. — so looking at similar-sized cities like Kamloops and Prince George comparatively to Nanaimo.
Then I'd like to move into the role of elementary counsellors and how counsellors function within the education setting and then, finally, give you some data on the FTE trends — so the full-time-equivalent trends — for elementary counsellors since 2001.
If you turn to your second page, at the top it says: "Childhood poverty — child poverty rates by province, 2009." British Columbia was once again near the bottom of the pack, with a child poverty rate of 16.4 percent in 2009 using StatsCan's LICO, which is the low-income cutoffs, before tax, as a measure of poverty. The B.C. rate was only slightly lower than the Manitoba rate of 16.8 percent and was much higher than the national rate for all ten provinces of 14 percent.
The number of poor children in B.C. was 137,000, about the same as the total population of Kamloops, Fort St. John, Port Alberni and Powell River combined. B.C. still had the highest provincial child poverty rate in 2009, using StatsCan's LICO after income tax. It was the eighth consecutive year that the province had the worst record of any province. The after-tax rate in B.C. was 12 percent — 100,000 poor children — and the national rate was 9.5 percent.
B.C. children under six had a higher poverty rate of 20.2 percent in 2009, compared to the overall B.C. child poverty rate of 16.4 percent. This percentage represents 51,900 young children in this province, an increase of 4,100 children over the previous year. B.C.'s under-six poverty rate has been higher than the national rate since 2002.
If you turn to the slide that has a table of kind of a yellowish colour there, it lists Kamloops, Prince George, Nanaimo and, of course, the province.
Nanaimo has significantly higher poverty rates than comparables in the province with respect to couples with children and male lone parents. If you look at the table itself, Nanaimo has 9 percent of children living in poverty when there are couples that have those children, as compared to Prince George with 6.1 percent and Kamloops with 5.1 percent. So there's a significantly higher rate of child poverty than other comparables in the province.
If you turn to the chart, it says: "Poor children with one or more parents employed full-time, full year."
Having a well-paying job can make a huge difference in family income, but good jobs are not always easy to find. In 2009, 48 percent of the poor children in B.C., which represents about 56,000, lived in families with at least one adult working full-time, full year. As the graph shows, B.C. had the highest proportion of poor children living in families where at least one of the parents worked full-time, full year.
StatsCan did not calculate the percentages, in this case, for New Brunswick, Prince Edward Island and Newfoundland and Labrador because of the relatively small number of responses.
What I'd like to do now that you've seen the data as far as child poverty goes, especially within Nanaimo…. I'd like to make the correlation between poverty and mental illness, if you look at the slide with "Poverty and mental illness" as the title.
The relationship between poverty and mental illness is both straightforward and complex. Understanding this broader context is key to addressing poverty, in order to promote mental health and support the recovery of persons with mental illness.
People with serious mental illness face many barriers over their lifetime, including stigma and discrimination, which may prevent them from securing adequate education and employment. Experiencing a mental illness can seriously interrupt a person's education or career path and result in diminished opportunities for employment.
A lack of secure employment, in turn, affects one's ability to earn an adequate income. As a result, people may eventually drift into poverty when they suffer from a mental illness.
In the cases of individuals with mental illness, lower levels of education may be attributed to the fact that mental illness often strikes in adolescence, when formal education is being undertaken. Interruptions in education have consequences that reduce opportunities to acquire better jobs.
You can now turn to the table that has "Childhood mental illness" at the top — table 1, "Prevalence of mental disorders in children and youth." It has a list of the disorders: any anxiety disorder, conduct disorder — that type.
The burden of suffering from any health problem may be characterized by its frequency, morbidity and associated human and fiscal costs. According to these criteria, child and youth mental disorders cause a large burden of suffering. In terms of frequency, studies over the past 20 years have indicated that approximately 20 percent of children and youth may experience mental disorders at any given time. This prevalence rate is high.
Given that 140,000 children and youth in B.C. may be affected, it is unlikely that clinical services alone can achieve a marked reduction in the burden of suffering. Rather, a multifaceted approach is required that includes universal programs to promote health for all children, targeted programs for children at risk and clinical services for children with severe disorders.
You can turn to the slide that has "Child development" on the top. It starts with the most recent early development instrument. This is the EDI, which is in partnership with UBC.
Higher rates for young children are very alarming given the importance of the early years of life for children's development. This is not unexpected with persistently high poverty levels in the under-six population. What this states here is that UBC has shown increasing developmental vulnerability for the province's children upon school entry, now reaching 31 percent at risk.
If you turn to the next slide, it has the outline of British Columbia. This one's very hard to read, so my apologies. What it does indicate here…. If you look at the outline of B.C., Nanaimo is shaded as a dark orange, which means we have a prevalence rate of over 15 percent of children. What this does is measure behaviour in a structural environment, including cooperation and respect for others, socially appropriate behaviour, self-control and self-confidence. We have over 15 percent of our students entering kindergarten that have difficulties with this.
Further, a higher percentage of Nanaimo kindergarten children were rated as vulnerable for physical development, at 17 percent, than B.C. children, which has the average of 13.5 percent. There was a higher percentage of children living on income assistance with a single parent in Nanaimo, at 5.5 percent, than in B.C., which is averaging 2.9 percent. There was a higher percentage of children living on income assistance in Nanaimo, at 6.3 percent, than in B.C., at 3.4 percent. There was also a higher percentage of children in care in Nanaimo, at 17 for every 1,000, than in B.C., which is 9.2. We are a community in need.
It is unlikely that clinical services alone can achieve a marked reduction in the burden of suffering, but this multifaceted approach is necessary.
You can now turn to the slide that has "Elementary counsellors" on the top. I'm going to make the link to how the education system provides for support for children that experience mental illness. It's in a lot of ways dealing with poverty.
Elementaries' own counsellors provide a continuum of preventative, developmental, remedial and intervention services and programs and facilitate referral to community resources. The zone counsellor's role includes counselling, school-based consultation, coordination and education. The zone counsellor does not discipline but, rather, helps in the development of effective behavioural change.
If you turn to the two slides which have the elementary counsellors' services, there's a long list, and I'll let you refer to that on your own.
You can now turn to the slide that has the B.C. FTE trends for elementary students. It has a teal-coloured table. What we've noticed since 2001 up until 2011 is that we've had a change in student population that has been a reduction of almost 3 percent. So 2.9 percent of our students are no longer in school. We've had a reduction in FTE — full-time-equivalent.
On the next page it indicates the number of counsellors and their FTE change since 2001 to 2011. We've noticed a decrease of 10.6 percent. So we've lost 2.9 percent of children, but we've lost 10.6 percent of counsellors.
When we look at Nanaimo specifically, we have had a significant decrease — declining enrolment. We've lost 12.2 percent of our children, students. But what we have lost in counsellors is 45.6 percent FTE.
B.C. has the highest rate of poverty, LICO after taxes. Nanaimo has one of the highest rates of poverty and childhood poverty in the province, and poverty is closely associated with levels of mental illness, according to the Canadian Mental Health Association. Nanaimo is a vulnerable community when considering child readiness with respect to the social competence, according to the EDI.
Elementary counsellors provide a multitude of services to meet the needs of at-risk youth. Counsellors can be considered a part of the multifaceted approach, as recommended by UBC.
Our FTE has declined significantly more over the past decade compared to changes in student population. What we're asking the B.C. government to do is to increase the funding to school districts to bring learning specialist teachers, especially our counsellors, back to at least 2001 levels, when we were able to provide a service to these students in need.
D. Horne (Chair): Thank you for your presentation. We'll begin with questions from Gary.
G. Coons: Hi, Justin. Thank you so much. I'm from Prince Rupert and a teacher. I see that the issue of child poverty is key, and the importance of school counsellors even highlights what's been going on with the cuts, not only in counsellors but learning assistants, special needs teachers, other specialists. It's unfortunate that with the EDI, it isn't done until the kids are already in kindergarten and six years old.
In Prince Rupert, school district 52, it's 49 percent that are vulnerable and at risk, compared to the 31 percent average. So it's a real concern. Poverty and the lack of services prior to kindergarten, I think, is key also. We see the impacts on the teaching profession and the rest of the classroom teachers. I'm well aware of that.
I just want to sort of sway a bit. It sounds like you're also advocating that we have to do something about poverty. I think a poverty reduction plan for British Columbia, like other provinces have, might help the situation. Could you think of two or three things that could help your district and British Columbia as far as an effective poverty reduction plan?
J. Green: That's a complex answer that I don't know that I have the time to answer.
What I do know is B.C. is one of three provinces left that does not have a poverty reduction plan in place. That's worrisome because we're not seeing significant improvements, even though the provincial government has provided $44 million in the past number of years to the Ministry of Children and Family Development.
I don't know that CYCWs, our child and youth care workers, are able to meet the needs of our students as far as education goes. That close link between education and mental illness and poverty…. It's so interlinked. I think one of the great supports is through our education system in providing for those kids at risk.
I didn't really answer your question because I don't think I have the time.
J. Les: Thank you, Justin, for your presentation.
The various issues that you're dealing with in the schools — your presentation essentially takes it all back to the question of poverty. I certainly don't take that issue lightly. Clearly, people who are living in circumstances of poverty need to find ways to get out of those circumstances and find a better life.
I'm not unfamiliar with poverty. I grew up in poverty myself when I was a child. But at the same time, I'm not sure that poverty necessarily leads to the social conditions that you've outlined straight across the board. It clearly does not.
We had a presentation yesterday — I forget where it was; in Prince George, I believe — about the number of students that are entering kindergarten today with a variety of developmental delays. It may well be that poverty is a contributing factor. I'm not going to sit here and argue that. But the presenter yesterday also alluded to a number of other conditions and pathologies leading to those developmental delays.
Now, you're a teacher. Could you give us some perspective in how we might…? First of all, in your view, what are the causative factors that lead to those developmental delays, and how can we, as a society, better address those issues?
J. Green: I think back to the time when I was taking my teacher training, and I was introduced to Maslow's hierarchy of needs. I've spent the last 12 years teaching in inner-city schools, so I have a very close connection with that community, and poverty and its effects.
What I came to realize is that students aren't prepared to learn if their basic needs are not met. It's one of those conditions for life. In order to think critically, to be a part, to be present, you can't be considering the fact that your stomach is grumbling, that your feet are cold because you don't have proper shoes. It's those basic factors that need to be in place before you consider a proper education.
This is where the cycle comes together. If you're not prepared to learn and receive your education, the likelihood that you will remain in poverty is very high. So you're not going to get the education you need, and you're not going to access the jobs that are available because you don't have the education. It's a requirement now.
Like you said, it is not the only causal factor, but it is a significant one, and I think it does need to be addressed in a significant way.
My presentation really is about the connection between poverty and mental illness, and how our counsellors support students through those. I know poverty is a big issue, but there is a connection to mental illness that has been demonstrated, and our counsellors play a significant role.
Just to give you an example, we have 32 elementary schools in the Nanaimo-Ladysmith school district. We have eight counsellors to meet those needs. That's not good enough. That's not good enough for our kids that need help, need supports, need connections to community-based services because the parents aren't able to access them. We need those supports in place to help those children.
D. Horne (Chair): Sorry. We're way over time now, so unfortunately, I'm going to have to cut it off. I know that we could go on for quite a while, but thank you so much for your presentation and being with us today.
J. Green: Thank you for the opportunity.
D. Horne (Chair): I'll now call our next presenter, being the Parksville and District Chamber of Commerce, and Kim Burden.
Kim, welcome to the committee. You have ten minutes to present, followed by five minutes of questions, and your time begins now.
K. Burden: We would like to take this opportunity to thank you for allowing the Parksville and District Chamber of Commerce the opportunity to present the views of our 500 members of every size, sector and region of the business community in Parksville and the area surrounding.
On the government's priorities for the 2013-14 provincial budget, we are echoing a written submission from the B.C. Chamber of Commerce, representing 30,000 members, which details the full range of chamber recommendations for budget. In addition, all the members of the committee have received copies of the B.C. Chamber of Commerce 2013 Policy and Positions Manual, which catalogues the issues of concern to chamber members from across the province.
The written presentation today addresses a number of issues that I don't have time to address in our comments today. These include skills, education, transportation and the role of Crown corporations.
The news that revenue has taken a $1.4 billion hit as a result of a drop in natural resource revenue is another reminder that B.C. is subject to the vagaries of the global economy. We are and will remain price-takers on the world stage, not price-setters.
I came from a conference yesterday of Vancouver Island businesses. There were three presenters — the governor of the Bank of Canada, the Premier of the province and Minister Pat Bell. After saying that we're subject to the vagaries of the global economy, I'm thankful that I'm a Canadian, and I'm thankful that I'm a British Columbian. I think that we have done incredibly well in the turmoil outside in the world, and the Legislature is to be commended for their response.
We've seen China suffering its seventh straight quarter of slowing growth. China, while it's still an amazing economic power, has posted its slowest growth pace in three years as investment slowed and demand fell in key markets such as the U.S. and Europe. A third round of easing in the U.S. will continue to apply pressure to the value of our dollar, which will leave companies in our export and manufacturing and resource sectors having to address a high dollar for the foreseeable future.
In addition, we've seen the federal budget officer state that provinces will face increasing pressure to provide core services such as health and education without additional revenue or tough cuts in other areas. All of these point to the critical importance of government maintaining a focus on its fiscal responsibility and caution as we approach Budget 2013.
The chamber and the business community believe that the starting point for government is the need to ensure that we achieve a balanced budget, as forecast in 2013. Not only is it the correct approach for government to only spend as much as it earns, but a requirement for balanced budgets holds governments accountable and sends a clear signal to international investors that B.C. is a safe haven in a troubled global economy. I had a chance to present to a group of those global investors recently. They are absolutely coming to our community, and we welcome their dollars as an investment in our businesses.
For the chamber, fiscal responsibility requires a focus on several core areas that we will address in more detail: taxation, debt and, of course, public spending.
British Columbia has one of the lowest tax rates for both personal and business income in Canada. The government is to be commended for these actions, often taken in the face of significant criticism. When we look at the business tax rates, B.C. currently has the joint lowest corporate tax rate and the fourth-lowest small business rate. In terms of personal tax rates, B.C. has the lowest rates for incomes below the $120,000 mark and the second lowest for incomes above.
This positive picture has led many to begin calling for increases in the corporate rates, claiming that a one- or two-point raise will still place B.C. in a very competitive position in the Canadian context. We don't believe that this is an accurate position, as it fails to recognize the significant increase many businesses will see as a result of the move back to the provincial sales tax.
One of the key reasons our members supported the move to the harmonized sales tax was that it would greatly enhance our competitiveness and our ability to attract new investment. Federal Finance estimated that B.C.'s marginal effective tax rate fell from 34 percent in 2006 to 16.8 percent in 2012. While there were several factors, including corporate tax cuts, which attributed to this drop, the core reason was the replacement of the provincial sales tax with the harmonized sales tax.
Due to the return of the provincial sales tax, we will see B.C.'s marginal effective tax rate increase to be the highest in Canada, placing B.C. at a significant competitive disadvantage and hampering our ability to attract new investment. In this context, the chamber does not believe that now is the time for any further tax increases on business.
In addition, our members have sent a clear message that there is no expectation or call for any decrease to the corporate or small business tax rates in Budget 2013. The marginal effective tax rate calculations do not capture the full impact of the PST on B.C. competitiveness, and while we respect the democratic process, it must be stated that the decision to scrap the HST was the wrong choice by British Columbians. This bad decision has been compounded by the fact that not only are we scrapping the harmonized sales tax, but even worse, we are reverting to the old provincial sales tax system.
The chamber believes that the loss of input tax credits to business will significantly hamper B.C.'s ability to compete against key jurisdictions. This will place B.C. companies at a significant Canadian competitive disadvantage, as we will only be one of the three provinces that do not have a value-added tax system. The chamber therefore recommends that the government undertake an open, transparent public discussion on a made-in-B.C. value-added tax.
The one taxation area where urgent action is required continues to be property tax. The chamber agrees with local governments who say they do not have the financial means to address the pressures they are facing, particularly in regards to infrastructure. However, to simply provide a new, unconditional revenue stream is unacceptable without reform.
In Parksville we are facing a significant infrastructure expense with the addition of a water filtration and new intake system on the Englishman River. This is estimated at this point to cost somewhere in the neighbourhood of $40 million.
We've just had a review of our water rates, and in some cases the proposal that the city put forward was to raise commercial water rates by up to 90 percent. This is a huge blow to local business. We've managed to stem the tide at this point, and they're going to review that proposal. But we know that our water rates are going to increase to pay for this increase in our infrastructure costs, and this is a real detriment to business in our area.
D. Horne (Chair): Kim, I'll note, because I'm going through your statement, that you're 70-some percent of the way through your time. I note that you're not through this speech.
K. Burden: I'm certainly not, so I'll move ahead to something particularly relevant to the Parksville area.
We have been a host for the LiveSmart B.C. program. For the LiveSmart program, we've hired a business energy adviser. This adviser has performed energy audits for businesses on Vancouver Island and the Sunshine Coast, resulting in equipment upgrades and behavioural changes that have contributed to B.C. Hydro's conservation targets.
Conservation has been targeted at 9,800 gigawatt hours per year by 2020. LiveSmart B.C. is contributing to achieving this target by working with business organizations across the province to preach energy conservation and providing business with the tools to decrease their energy use.
At the chamber office our motto is "Leading the way." We undertook a revision to our energy costs and reduced our costs by two-thirds by changing our lightbulbs, changing our behaviour and looking at some other options going forward.
The LiveSmart B.C. program is contributing heavily to allowing businesses the opportunity to change their energy consumption, and we would like to see that program continue.
I do want to talk a little bit about debt. If we look at B.C.'s debt picture, we can see that while B.C. fares very well compared to other jurisdictions, it's worth looking at how the debt picture has changed from previous years. The chamber recognizes that B.C.'s debt levels are low by international standards and is a debt level that is manageable for an economy such as B.C.
Further to this, we obviously recognize that this increase was driven by truly unique circumstances as the global economy shifted. While we recognize that government had to act to protect services in the B.C. economy by spending more than they were generating in revenue, our members have been clear. When economic conditions permit, we must mitigate costs for future generations.
I think it's critical that the debt be reduced as soon as balanced budgets are achieved. We're recommending that at least 50 percent of surpluses be directed to debt repayment.
D. Horne (Chair): Thank you so much. I know there are some other issues that are in this submission, so we will consider all of the issues when we are doing our deliberations.
I will start with Mable for our questions.
M. Elmore (Deputy Chair): Hi, Kim. Thanks for your presentation.
I just had a question. How many members are there in the Parksville and District chamber?
K. Burden: We have 500 in a community of 11,000 people.
M. Elmore (Deputy Chair): Five hundred — great. I'm interested particularly in the role of tourism in the area, to the chamber. Generally, what percentage of your members are…?
K. Burden: Tourism is our economy. It's something that we're striving to change. Tourism cannot possibly be the main driver of our economic engine. We need to….
The chamber has embarked on an economic development program, and the goal of that economic development program is to raise the average wage in our community, which is significantly lower than the B.C. average. Tourism jobs aren't going to do it. We need to attract other sectors to our community.
M. Elmore (Deputy Chair): We heard a presentation from the Prince Rupert Chamber of Commerce that the high cost of ferry fares has a negative impact on them. Is that something that contributes or is of concern to the chamber here?
K. Burden: We are concerned about ferry fares. We have seen a drop in our tourism visitors as a result — or maybe not as a result but in conjunction with the increase in fares.
As far as B.C. Ferries is concerned, I would rather see the government look at the service contract that they have with B.C. Ferries. I think that sailing empty ships is a supreme waste of money. I look at the subsidy that the Ferry Corp receives, particularly for the smaller routes on the islands, and I find that it's excessive. I think that we need to have a rationale for that subsidy, and we need to take a look at what kind of service we need to provide to suit the need and not necessarily the other factors involved.
P. Pimm: Thanks a lot for your presentation. I'm going to move to a part that you didn't get read into the record, on the carbon tax. I see that you have a whole gamut of positions, the same as the B.C. chamber. I come from an area that'd like to scrap it, but I've actually come to a position in my own self that we need to look after it in a way that works for the entire province, and I think we have to get to that point.
I want to confirm that you made a presentation to the Finance Minister on carbon tax.
K. Burden: Yes, we did.
P. Pimm: Thank you very much. That's my main point.
D. Horne (Chair): We'll end with a question from Dave.
D. Hayer: Thank you very much, Kim. I appreciated your presentation, a very detailed presentation.
Can you go into detail? Do you support keeping the carbon tax? Do you think we should modify it? Or should we scrap it, as we had another presenter to this propose to scrap it? We had some people in the past say maybe we should increase it and other ones saying to take the money from carbon taxes and give it to the transit or other organizations and groups, that it will be better use of carbon tax dollars the government receives.
K. Burden: I do think that it could go to other groups such as transit. We have very little transit in this area, and it's certainly something that could be improved. At the same time, I'm not a supporter of the carbon tax. I think there are other, more effective ways, such as providing education both to the public and to business with regard to their emissions. I think that we need to look at all of the options.
We are at a disadvantage as far as attracting business because of the carbon tax. However, we recognize that the money is required in order to meet our offsets, so we're not, as a chamber, recommending scrapping the carbon tax. We're recommending holding it at the level that it's at right now.
D. Hayer: So you think our businesses have a disadvantage with the carbon tax? We have some of the businesses saying, you know, it's hurting their business. They might have to be shutting down their businesses or maybe have to move across the border to the United States to do the same businesses and just sell the products back to us because there is no carbon tax across the border in the United States. Any views on that?
K. Burden: I believe that the carbon tax is hurting our competitiveness as far as attracting business to our province and particularly to our community.
D. Horne (Chair): Well, thank you so much for your presentation. That's great for being here today.
I'll call our next presenter, which is Shore Energy Solutions, represented by Ian Gartshore.
Ian, welcome to the committee. You have ten minutes to present, followed by about five minutes of questions. Your time begins now.
I. Gartshore: Thank you very much. I appreciate the opportunity to be able to address this committee.
I am not only an energy adviser, which is what my business is about. I also work as a marriage and family therapist and in a whole bunch of areas. I call myself a business and social entrepreneur.
I think that basically we have to look at where we're at in the world, because B.C. is not alone. We're not alone in what's going on. The fact is the cheap energy upon which we have based our economy is gone. Energy prices are going up; hence, B.C. Ferries costs are going up. We have to look at what we're going to do.
It would be very fine if the higher energy costs would relate into higher costs or higher income for the government, but that's not necessarily happening. So I think we need to look at two paths. One path is the traditional way of trying to raise revenues and lower costs, and the other path is to increase revenues in a long-term, sustainable way as well as reduce costs in a way that doesn't affect people in a negative way.
The first one is to do the traditional way of raising revenues — I call this fiscal fickle prosperity — where we exploit the natural resources. That's one way to do it.
Oil and gas — we can subsidize them, try to help and encourage them so that we can get some more revenues. This, of course, is short term, and it's unstable, as we're finding out. The revenues are not there, even though we've put all kinds of effort into trying to develop them. We can also go for minerals, which is great, and it provides some short-term revenues, but there again, long-term it's not very sustainable, doesn't work.
I consider this path to be a dead-end road, because eventually the minerals and resources are going to be gone, and then where's our province going to be? Alberta is facing the same prospect.
Compare this — the way that we've been doing it for a long time now, for the last 50 to 100 years — to the way of the future, which I call long-term prosperity, where we invest more in renewable energy.
Consider where our province would be without Bennett and the dams. We would be at a huge disadvantage provincially. We need to go in this direction because this is sustainable. This does not continue to impact. This does not disappear when the resources are gone. This revenue continues on.
Renewable energy now isn't just micro-hydro, although that's still relatively new. It's also wind, and it's also wave and tidal.
People say: "Oh well, they're not very competitive." The reason they're not competitive is because they don't get subsidies. Oil and gas does get subsidies. It's not a fair scenario. We can't compare apples to oranges here.
Secondly, long-term prosperity will come when we turn those sources of energy not only into electricity but into hydrogen. Hydrogen is clean. It's renewable. We can base our economy on hydrogen.
We can also generate electricity and hydrogen closer to markets. Right now most of our electricity is generated a long way away, up in the Peace country. We lose a lot of our electricity in the process of transmitting it down here, and it's also a very dirty electricity. It wavers in voltage all of the time. So we need to generate power here.
We could generate as much power as all of the dams collectively today if we were to invest in tidal energy between Vancouver Island and the mainland. We could easily double the amount of power, and that could power the future in terms of extending power throughout the province, as well as down to California, where they seem to need lots of power — as long as they pay their bills, that is.
The other thing about energy conservation is a smart grid. The smart grid is something that B.C. Hydro is beginning to invest in, to look at. It can save us a lot of power, keep our power rates low, make our energy more sustainable and more secure and therefore empower our businesses and our homes.
Incentives for businesses and homeowners and rentals. This pays for itself. When governments invest in investments, the increased amount of revenues from the increased amount of generation of services and goods comes back to the government and pays for the incentives. This is a program for free — not only LiveSmart. The incentives for homeowners, which is under the federal ecoEnergy program, is actually paying for itself. The federal government hasn't quite figured this out yet. They need to put back into it as well.
Public transportation and rail. We cannot continue to build highways everywhere. It's wonderful that we've got this beautiful wide bridge in the Lower Mainland — the biggest, widest in the world. The reality is that when we build those highways, more people drive their cars. And while that may be good for automobile dealerships and for gas stations, it costs the government humongous amounts of money to maintain those highways. To build those highways and those bridges is too much.
There are all kinds of calls for a new highway to go between here and Port Alberni. Who's going to pay for that? Yes.
We've got a railway that is in desperate need to have more investment into it. Railways are cheap compared to highways. Railways can transport goods when highways are closed, and transport people. They are the way of the future.
Every country but Canada, every developed country in the world but Canada is investing in railways. Why? I'm not sure why we're not, but they are because they realize it lowers greenhouse gases, and it's cheaper — cheaper for the taxpayer, cheaper for almost everybody but those who are subsidized by the roads.
Intermodal transportation. Let's go to ferries. B.C. Ferries are using an outdated model, like everything else. They figure we need to buy big ferries and move lots of vehicles and passengers. With higher energy prices, that's the past. It's not present. Ferries cannot continue with the current modality.
If we had intermodal transportation so that people who got off the ferries got onto buses, got into car-share co-ops, got onto rail, got onto airplanes — whatever…. If we could move people back and forth in different modes — intermodals, it's called — then we wouldn't need to have cars on ferries.
I'm a member of a car-share co-op. That's how I got here. I can get into a car in Vancouver…. As a walk-on passenger, I get over there, grab a car and do my business over there and then come back. It saves me a huge amount of money. It saves the government a huge amount of money. Why are we still doing it the old way? It's done.
Tax shifting. Carbon. Here we're going to talk about the carbon tax. It's a very nice little tax. What businesses won't tell you is that because we have a carbon tax, their taxes — all of our taxes — are lowered because the carbon tax right now is going to general revenues. They may whine and complain about the carbon tax, but the reality is that their tax rates are lower, making them more competitive relative to other places. So we need to look at this whole picture.
The problem with the carbon tax is that it's not being used for developing services that are sustainable, that lower carbon emissions and that create better transportation. That's where we need to put our carbon tax. So I say let's apply carbon tax right across the board so all parts of our economy are paying into the carbon tax — not just some, but all. Then take the increased revenue and put that into more public transportation, cycling trails and other ways of getting people moved around so that they don't have to depend on the single-occupancy motor vehicle.
The carbon tax can be a shift. It can shift us away from a time of the past when fuels were cheap and easy to get a hold of to the time of the future, which is where we depend more on renewable energy and more on public transportation. That is the future. There's no other way.
We can subsidize those things. I've compared the old way and the new way. More revenues because what we're going to do is move into a way of the future so that we can set the tone for 50 years. Dollar for dollar, if we invest in the old ways — oil and gas and whatnot — we get half as many jobs as if we move into railways, using the carbon tax, electrical generation. All those kinds of new ways that I talked about generate way more jobs and way more revenue for the government and for us.
When we have more revenue as people and as businesses, then we will be able to pay for our taxes quite happily, not complaining as much as we do, and we will be able to power B.C. into the future.
We are uniquely positioned in Canada and in North America to lead the pack. I think the Liberal government set the pace by saying that we will start using the carbon tax. It's unpopular, and we're the only place in North America, and that's a problem. But we are setting the pace to say that we will establish British Columbia as a place of the future. So all the jurisdictions down the road are going to be saying, "Wow, they were smart. They were like Bennett. They put dams in" — except that our way of the future is going to be even beyond what dams are.
The old way of generating more revenues is a dead end. The new way is long-term prosperity.
Reducing government costs — that's the other thing I need to speak to. We can slash programs, and we can maybe bulk-buy pharmaceuticals. What else have we got left? There's not a lot left. Or we can reconfigure health so that people take more responsibility for their health rather than just getting sick and waiting for a doctor to fix them. We need to stop the dependency. We need to drive people toward proactive health care.
Last week I probably saved somebody's life — carbon monoxide poisoning in their home. They were going to doctors. They were spending all of our taxpayer money trying to figure out why they were sick. Carbon monoxide poisoning from natural gas — that was the problem. All we need to do is go in and figure out where the problem is coming from.
We need to be proactive because otherwise, as we age, we're going to be bankrupt. It's not going to be just 50 percent of our revenues being used for health care, as it's called. It's going to be 60 percent or 65 percent. That's not sustainable. We can't do that. We have to instead become more proactive. Even the Cancer Society is beginning to do that. In short, we need to set the direction.
D. Horne (Chair): Thank you so much for your presentation. We'll start our questions with Mable.
M. Elmore (Deputy Chair): Hi, Ian. Thanks for your presentation. You referenced transitioning to a number of alternative ways to generate energy — wind, wave, tidal and geothermal — and also having more reliance on hydrogen. What are some of your thoughts in terms of hydrogen? In particular, I know hydrogen cells are also energy-intensive in terms of the construction and some of the challenges.
I. Gartshore: That's wonderful technology, and it's very complicated technology. The reality is that all we need to do is take hydrogen and put it into a burning device, and we can create heat out of that. We can also create electricity. We can move the hydrogen to places where it's really necessary to reburn it.
Now, fuel cells are one fancy way of trying to do that. But that's very complex, very costly and I don't think particularly effective yet.
If we were to, for example, generate hydrogen in a place that has a micro-hydro or tidal power or whatever — we don't have to have power lines running throughout everywhere. We can generate a radon spot on one of the islands, and then we can ship that very safely to a place where it reburns it, makes it into electricity, to generate power for the Lower Mainland, for example, or Vancouver Island. We need more power here on the Island. That's very doable.
However, it's not very cost effective right now given that our natural gas prices are artificially low, partly because we subsidize them.
D. Hayer: Thank you very much, Ian. A very good presentation. I agree with some of the stuff you said but probably disagree with some of the other ones.
I was in Europe recently. My wife's family is in France and Spain. I visited ten different countries there. One thing I noticed is that they have a very small area with a large population. I was starting to wonder why we couldn't be like that.
We have a very small population, but the area is huge. That creates different types of challenges. Like in Surrey, when I moved in '72, there was a very small population. Now it has a very large population, probably larger than Vancouver, in about ten to 15 years.
They stopped taking buses on the Port Mann Bridge back in '89, because there was so much traffic congestion. They couldn't afford it. The new, ten-lane Port Mann Bridge — the widest in the world — is going to, for the first time, have transit on that. The buses will be going. It is designed for light rail. It's designed for bicycling and for pedestrians to go on it.
Do you think we have to put some solution for the people who cannot afford it because of the type of work they do or who, because of our geography, can't take transit? Have some solutions so they are not stuck in traffic, maybe an hour and half to an hour, burning fuel and putting all this extra pollution in when they should be going quicker? It might take them five minutes to get to the bridge from the Guildford area, compared to what it was taking before, sometimes an hour and a half or maybe one hour each way, extra.
I just want your view on that.
I. Gartshore: The reality is that we've tried this in North America for years. Toronto keeps on adding more and more lanes so that people can do the very thing that you've just mentioned. Within five years, they're back to the same place they were before they added more lanes.
It's a dead-end road. It's wonderful…. And I understand the old way of thinking. It keeps us going. It's an old paradigm that's very powerful, and you and I both are influenced by that. My father says we can't afford to do it any other way.
I say: "We can't afford to keep on doing it the way we're doing it." We cannot. Our revenues keep on getting literally poured by the bucketful into a system that is self-defeating.
If we were to take the rails that are there and put the kind of money into subsidizing those that we are into the highways and made the intermodal again, so that the rails met buses met other modalities — taxis, car-shares, co-ops; whatever it might be — and made people able to move very quickly, then when that bridge was all backed up…. Because it's going to be, eventually. The widest bridge in North America is going to get backed up.
D. Hayer: So you need a second one.
I. Gartshore: Then you need a second one, which means…. How many millions of dollars did that project cost?
I. Gartshore: Yeah, $3.2 billion. That's a lot of money to be putting into one bridge, into one infrastructure.
If we were to put that kind of money into public transportation, like the Europeans do — who are way ahead of us….
D. Hayer: Like Canada Line?
I. Gartshore: Canada Line is one example. Again, it can't be done on its own. The problem is that we think about this, and then we think of that, as though they were in isolation. They can't be in isolation.
We need to figure out how to connect them all together so that people quickly move from one place to another. So goods, which are the backbone of our economy too, can get moved without having things all crushed up.
You know, the Malahat got closed this weekend.
D. Horne (Chair): I've got to cut you off there. I've got two more questions. A really quick one from Gary, and then a really quick one from John Les.
G. Coons: Thank you for your presentation, Ian. I do think we have to move to the way of the future.
I want to comment on your ferries brief, about intermodal ferries. It's happening right now. There's going to be consultation in communities about how to cut service or revamp whatever is happening in communities. There's no long-term vision or strategy where there's going to be $72.5 million in the next ten years. We've already spent $1.9 billion in the last nine years.
Could you just quickly touch into something that you may tell the B.C. Ferries consultation process that is coming to the community?
I. Gartshore: Absolutely. When we totally have to be dependent on ferries moving vehicles, then it makes it a very expensive system. If we were to move people and bicycles and smaller items like that, we don't need the huge ferries. We don't need the huge ferry slips and docks and whatnot.
For example, I live in Nanaimo. If we had a return of the fast ferry — a foot ferry, rather — that went from Vancouver to Nanaimo….
A Voice: Careful. [Laughter.]
I. Gartshore: Yes, I know — "fast." But fast was what I meant — fast in terms of getting people back and forth.
We had a beautiful ferry. It was a catamaran, and it was fast. It wasn't the NDP debacle. It was a fast ferry, and it got people to Vancouver reasonably inexpensively. We could get people there.
If people were able to move there, to get to Vancouver, then jump onto…. Of course, in downtown Vancouver there are tons, lots of different ways you can get moved around in Vancouver. If we met them in Nanaimo and got them onto a train to get them up here or down to Shawnigan Lake or Duncan or something like that…. If they were able to do that, they wouldn't need their cars and we wouldn't need to have these huge ferries and we wouldn't be subsidizing to the same degree we are.
D. Horne (Chair): Okay. I think we get the point. John Les, real quick.
J. Les: In the interest of time, I'll defer.
D. Horne (Chair): Okay. Thank you so much for your presentation.
Our next presenters, who are in front of us now, are Kathryn and Erin from the Canadian Cancer Society.
Thank you so much for being here. You've got ten minutes. Please begin now.
K. Seely: Thank you, Chair. Thank you, members of the committee. And thank you to Ian, who kindly introduced us by mentioning the Canadian Cancer Society.
We actually are focusing on prevention, and we hope to be able to present to you our recommendations today, which we believe could keep British Columbians healthy, help bend that health care cost curve and help balance the budget.
We'd like to present to you three recommendations about investing in prevention. The first is our Cancer Prevention Centre. The second is our smoke-free-place legislation. And the third would be a provincewide colorectal cancer screening program.
Before turning to the topic of cancer, my one thing is our men's and women's health initiative for the fall. So my one thing for health is to run more. Erin will leave with you at the table our top ten tips for keeping men and women healthy this fall.
All right. A little bit about cancer. It is the leading cause of death in British Columbia. Two in five of us will develop it in our lifetime, and one in four of us will die from it. We know that this year, 23,000 British Columbians will be expected to be diagnosed with cancer but that about half of our cancers can be prevented by healthy public policies and healthy living. Imagine if we could prevent half of all cancers.
The thing about cancer is that we anticipate that the number of cancer cases will increase by 70 percent by 2030 if we do nothing different. Now, coincident to this, as was mentioned by Ian, the B.C. government is spending half of its budget on health care. Estimates from the Ministry of Health show us that those health care costs will rise to 71 percent of the provincial government budget by 2017. Clearly, it's not sustainable. Something more must be done. We say that something is to invest in prevention.
The first investment that we're asking this committee to support is to support the development of the CCS-UBC Cancer Prevention Centre. It's a concept that is unique. It's a concept that's the first in North America, if not the world. We know that there are centres of cancer prevention excellence across the country, but what we don't have is vertical integration.
We don't have the researchers working alongside the policy analysts and the health care practitioners and the health promotion practitioners to put evidence into your hands so that you can make policy sooner and, also, that programs can be put into place earlier and delivered to British Columbians and British Columbia can uptake this behaviour and then develop and practise more healthy lifestyles.
Since 2006 we have had a chair in primary cancer prevention. Her name is Dr. Caroline Gauthier. Following that, we partnered with UBC to develop the CCS-UBC Cancer Prevention Centre. It currently sits at the School of Population and Public Health, department of medicine, at UBC. But it is quickly outgrowing its seams, and it is not vertically integrated.
We have asked the B.C. government for a one-time capital ask in the amount of $25 million, which we say is half of what it would cost to acquire the land, construct the building and equip the cancer prevention centre, which would allow us to increase cancer prevention research capacity and get that research into the hands of practitioners sooner, which would help eliminate the research-to-practice gap.
People approximate that it takes 17 years to turn research into practice. For instance, in the 1960s we knew that secondhand smoke was causing cancer, but we weren't seeing the first smoke-free places until the 1990s. Recently, in about 2005, the International Agency for Research on Cancer came out with evidence — that had been suspected for quite a while — that tanning beds caused cancer. Now in 2012 — thank you to the B.C. government — we have indoor tanning legislation. That took seven years, not as long as 30.
Things like that, we hope, if we had been working alongside the international agency, we might have been able to put that evidence into policies and programs sooner. So we're hoping that this committee will support our one-time capital ask of the B.C. government to build a cancer prevention centre.
Secondly, smoking. Smoking is still the number one cause of cancer. It's responsible for 30 percent of all cancer deaths and 85 percent of lung cancers. We've come a long way; more work needs to be done. There are still 14 percent of British Columbians who smoke, which translates into roughly 500,000 British Columbians.
We have a good tobacco control regulation in British Columbia, but there's a gap in that it still allows people to smoke on outdoor patios of bars and restaurants and in other outdoor places like parks and playgrounds and beaches. We're asking the committee to recommend to the B.C. government that it amend the tobacco control regulation to include such outdoor places.
We know that a UBCM resolution just passed, sponsored by Kamloops in late September, and we know there are 30 municipalities that have adopted stronger smoke-free bylaws. We would like the B.C. government to eliminate this patchwork and protect all children and patrons and workers of bars and restaurants from outdoor smoke.
Our third investment in prevention, if you will, is to implement a provincewide colorectal cancer screening program. Colorectal cancer is the second leading cause of cause of cancer deaths and the fourth commonly diagnosed cancer — breast, prostate, lung and then colorectal cancer.
The important thing to know is that it's largely preventable — you'll see through our ten tips — by eating a well-balanced meal with lots of fruits and vegetables, low in red meat and processed meats; maintaining a healthy body weight; and exercising.
We also know that it's preventable if detected before it occurs. That's where the stool test comes in, either through the fecal occult blood test or the fecal immunochemical test. British Columbians over the age of 50 should be having a stool test every other year to detect blood in the stool, which is a sign of polyps, which can be precancerous.
We've estimated that if 80 percent of Canadians were to test for blood in their stool every other year, we could save — we estimate over the next ten years — 10,000 to 15,000 lives. Presently only 30 percent of Canadians are getting screened.
We're asking the B.C. government to implement a provincewide colorectal cancer screening program. Four provinces have it in place. A number of provinces have pilots and have phased one in. British Columbia did have a pilot program, which we understand has been evaluated. We don't know where it sits right now, but we'd like it to be implemented.
Those are our recommendations for the committee. We thank you.
D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with John Les.
J. Les: Thank you for your presentation. Always interesting to hear from the Canadian Cancer Society. Colorectal screening — I happen to agree totally with your recommendation. I had a brother-in-law in his 40s that died from colon cancer. Ironically, he wouldn't even have been caught if he would have been screened from age 50 on.
Two things, I guess. One, is the stool sample testing the best way? Or is perhaps a colonoscopy better? It doesn't have to be done nearly as frequently, obviously. Experts suggest every ten years.
Secondly, just as sort of a statistical thing…. We all do this. We talk about 10,000 to 15,000 lives that would be saved. At the end of day, everybody dies.
Is that an accurate measurement, or should we be expressing that somehow differently? I don't even know what that is, but I often see that figure thrown around, or a version thereof, and it somehow doesn't quite work for me. I'm not sure why it does, but at the end of the day, somebody who doesn't die from colorectal cancer will go on to die from something else. So maybe that's more of a rhetorical thing.
The colonoscopy versus the stool sampling, which you suggest needs to be done fairly frequently —what are the pluses and minuses there?
K. Seely: The pluses of the stool test are that it's fairly inexpensive to do, and the results can be analyzed fairly quickly. And if it's negative for blood in the stool there's no need to go on and do the colonoscopy because that is quite invasive and expensive. So our recommendation is that people over the age of 50 do the stool test every other year, and if it is positive for blood, then that is grounds for further investigation — perhaps colonoscopy.
I understand what you're saying about the rhetorical question, but the evidence is there that screening saves lives.
G. Coons: Thank you, Kathryn and Erin. I agree with my colleague MLA Les about the importance of the screening program. It seems that four provinces are already there, with a commitment from most of the other ones. Adrian Dix, our leader, is pushing for it, too, and advocating for that — the Leader of the Opposition.
It's too bad that the screening pilot project is still in negotiations and isn't being pushed forward with the Ministry of Health. My question is: what would be the cost of implementing a screening program? If you look at the research from other provinces, what would the cost be here?
K. Seely: It's a good question, and I don't know that answer offhand. I know that the B.C. Cancer Agency has given estimates, and it would depend upon where the program is run out of — whether it's run out of the B.C. Cancer Agency or whether it's provided free of charge through the different health authorities.
I know that Adrian Dix did say that he could implement it for $10 million. I don't know what it has cost in other provinces, but I could find that out.
D. Hayer: Thank you very much for your presentation. My question is on colorectal cancer screening. Can that be done through blood testing too? Somebody was telling me they're working on some sort of blood test that can also provide some information. Do you have any information on that?
K. Seely: I don't. I only know about the stool test. Is it the prostrate screen antigen test?
D. Hayer: Somebody was just mentioning. Maybe it was wrong.
E. Hemmens: Not that I'm aware of.
K. Seely: We aren't aware of it. We'll check.
D. Horne (Chair): Thank you so much for your presentation. It's a very important thing, and thank you for being with us today.
We'll call our next witness and presenter, the Canadian Red Cross Society represented by Kimberley.
Kimberley, welcome to the committee. You have ten minutes to present, and your time begins now.
K. Nemrava: Good afternoon, Members. I'm Kimberley Nemrava, director for Red Cross in B.C. and the Yukon. Thank you for this opportunity to speak and for the work you're putting into these extensive consultations.
I know there are many challenges that we face in B.C. as we're all trying to do more with less, but there's also excellent work that's being done. So my presentation is going to focus on the strategies that are working well, how these can be expanded to address present and future challenges, and what Red Cross can bring to the table. I'll be using examples from health, disasters and our safety work.
As we all know, our aging population and increasing health care costs are on a collision course. We also know that moving people from institutions to their homes and keeping people in their homes is good for the patient, the community and health costs.
Our health equipment loan service does just that. Active for over 50 years in B.C., we loan equipment ranging from wheelchairs, walkers and bathroom aids to advanced equipment such as hospital beds, patient lifts and pressure relief mattresses. In some areas we also transport and install equipment.
There are Red Cross health equipment sites in 76 B.C. communities serving over 80,000 people last year with 160,000 loans of equipment. We also partner with the Ministry of Children and Family Development to operate a provincewide children's medical equipment recycling loan service, which provides all types of medical equipment for children in the at-home program. Programs are funded by Red Cross fundraising and grants, while others are contracted services within government.
What's working about this, and how can we grow it? This government has been working with Red Cross for over 20 years to create a program that is actually the envy of many health care workers in other provinces, who spend much of their day gathering equipment for their patients. It uses the strength of Red Cross.
We have national health equipment loan standards, a volunteer workforce of over a thousand volunteers here in B.C. for this program alone, and the capacity to solicit financial and gift-in-kind support for this program, which amounted to over $1.5 million last year. As well, we have the organizational infrastructure to ensure quality and risk management.
We want to expand this program and are certainly working with the health authorities to do this. We're also hoping for the support of the Ministry of Health in expanding this service to be accessible widely in B.C. and serve more people.
Disaster management. Red Cross is probably best known for its disaster work. I'd like to first of all acknowledge the support of the B.C. government through Red Cross to earthquakes in Haiti, China, Pakistan and, most recently, Japan. These donations have been well used and greatly appreciated.
In Canada someone affected by disaster is helped by the Red Cross every four hours. In B.C. we work in collaboration with Emergency Management B.C., First Nations and local authorities to respond virtually every day. I want to also compliment the work of Emergency Management B.C. We work with them closely, and they're really wonderful to work with. But in recent years we've all seen that natural disasters have been increasing in number, scale and complexity. Concerns here are, of course, around a major earthquake and disaster for B.C.
What's working, and what do we need to grow? We know that an effective response strategy mobilizes local resources first, with regional, provincial, national and even international resources as backup or surge capacity. We also know that effective surge support needs consistent training and response models. Red Cross has a national disaster training program and can bring in trained volunteers from across Canada when necessary.
We also have many local volunteers and can quickly mobilize into even remote areas. For example, this summer we mobilized into Lower Post, near Watson Lake at the north end of B.C., and into Johnsons Landing, where we were apparently the only non-governmental agency to be able to mobilize into those communities.
The Red Cross is working with local, regional and provincial governments to respond to small- and large-scale disasters, and we want to increase our role and increase our capacity in working with the government. This will free up the government to do the many coordination roles that no agency can do. While we can do direct service delivery and while we can do shelter management and bring in resources from Red Cross to do that, it also frees up the government to focus on those coordination and planning roles that the agencies simply can't do in a disaster.
Red Cross also brings in other resources and is working on an agreement with the B.C. government that would allow the deployment of our Red Cross emergency response units into the province in case of a major catastrophic disaster. These are completely self-contained health, water, sanitation, logistics and communication units that Red Cross maintains, researches, designs, stores and keeps — and pays for the upkeep of. These would be available to the province at no cost unless they're deployed. These are the types of partnerships that we could be working on more extensively with the province of B.C. to increase our collective capacity for disasters.
Finally, in the area of first aid, swimming and water safety, Red Cross offers first-aid training from basic to advanced for the community and the workplace with over 82,000 people taking training in B.C. last year. We've also trained people in swimming and water safety for over 65 years in Canada. Through a network of almost 3,800 training partners across Canada, we reach more than a million people annually with swimming and water safety.
What's working, and what do we need to do more of? In many areas of first aid, swimming and lifeguarding the B.C. government has —or is shifting its role to — set standards based on outcome, allowing organizations and companies to develop and deliver programs. This keeps the cost of first aid, swimming and water safety training competitive for the user and allows agencies and companies to do what we do best — develop and deliver training.
It also creates jobs and labour mobility. People can train to be a water safety or a first aid instructor and work for a Red Cross training partner across Canada. They can also create their own companies and become a Red Cross training partner. What we're encouraging the B.C. government to do is continue to shift its role into one of setting standards and allowing agencies like Red Cross to be the ones that develop and deliver the training.
Finally, as a national organization and international movement, we bring, in this time of increasing demand for so many services and decreasing resources, the resources and expertise that Red Cross can offer and a willingness to develop creative, efficient and collaborative models for delivery of services.
D. Horne (Chair): Thank you so much for your presentation. Questions from members?
B. Ralston: This is probably outside your central mandate here in British Columbia, but one of the things that we encounter in the media is a lot of stories about, I suppose broadly speaking, the Muslim world or the Arab world. I'm aware of your activity with your sister organization, the Red Crescent Society, whether it's in Syria, the Sudan or in Pakistan.
I'm wondering if you could just talk a little bit about the work you do and also the important work you do in dispelling some myths that may be promulgated about life in those areas.
K. Nemrava: It's interesting. The Canadian Red Cross is part of the international movement that has national societies in 187 countries. We all operate under the same seven fundamental principles. The entire movement is a humanitarian organization that provides aid to people — regardless of religion, gender — based on need.
This means we work in all those countries under those same seven fundamental principles that are not in any way based on religion. And truly, Red Cross in Syria, in Libya or in the Sudan is one of the only agencies that is still on the ground and able to offer services.
Tragically, we've lost three Syrian Red Crescent workers recently, who had been providing aid. But I'm always impressed with the commitment that our fellow Red Cross and Red Crescent movement workers have in doing that humanitarian work.
B. Ralston: One follow-up. Just again quickly looking through your annual report here, which is very comprehensive, there's a section on humanitarian issues. What's the link between what you've just explained about the global mandate of the movement and your efforts to raise awareness about some of the work you do and some of the issues that arise from your knowledge of those issues?
K. Nemrava: We actually have several education programs. We have a program that we're actually just starting — I didn't get a chance to run through all our programs — called Educating in Humanitarian Law. It's a school-based program, and it's developed by the movement internationally. It's all around international humanitarian law. And humanitarian law, further to your original question, is specifically around dispelling some of those myths. So that's some of our work in providing education to elementary schools that we're hoping to bring to B.C. in the next couple of years.
We also have many resources on line that people can access now and, actually, in November are hosting our 27th annual Global Issues symposium, where we'll have over 93 youth coming together for a weekend of learning about global citizenship. It's an amazing experience where they all go through a refugee simulation — woken up in the middle of the night, taken out into the woods and go through a simulation of what it's like to be a refugee. Their parents tell us it's life-changing, as do the students.
That's another one of our activities that we do, and we're increasing….
B. Ralston: It's a little bit hard to worry about cleaning up your room after you've been through that.
K. Nemrava: Yes, it's pretty interesting hearing their debriefs the day after.
D. Horne (Chair): Great. We'll end with a question from Marc.
M. Dalton: The Red Cross is a great organization. Probably all of us had swimming lessons through them. I know that using materials in schools, too, as a teacher.
I'm wondering: with your organization here in British Columbia, do you have offices in various parts of the province? How many employees are there? Do you have many volunteers also working with Red Cross? Or is it more on providing materials and coordination that your focus is?
K. Nemrava: We have 76 locations in B.C. If you count the swimming pools and recreation centres that offer swimming and water safety, it'd be substantially more. We have about 130 full-time-equivalent employees and over 2,000 volunteers. Those are registered volunteers that are not what we call one-time volunteers. These are registered volunteers with us. Our work is not possible without the support of volunteers.
Just to give you an example, of the 76 health equipment locations, seven of them have staff, and the other 69 are entirely run by volunteers. So we really rely on volunteers for all our work.
D. Horne (Chair): Very good work it is, and thank you so much for your presentation.
I'll now call our next presenter, who is Erik Andersen.
Mr. Andersen, welcome to the committee. You have ten minutes to present, as I believe you've heard several times at this point. Your time begins now.
E. Andersen: Thank you, Mr. Chairman. I addressed my representation, not knowing I would be able to do it in person, by way of a written submission. I'll just read it through, and then we can go from there.
It will be no surprise for you to read that crafting a tolerable budget for the operations of the British Columbia government in this coming year is probably one of the biggest challenges in your lives as MLAs. When describing the qualities of good field commanders, the military uses the term "situational awareness." Because battlefield conditions are constantly changing, a successful commander must have the capacity to think laterally. The all too familiar linear thinking model only produces irrelevance in any dynamic situation.
Right now global economics and finances are anything but static or predictable. I'm sure you know that. Members of this committee need to embrace the reality that they're working in an environment of great uncertainty and high risk.
Good field commanders are always well studied in history. There's little purpose in repeating the mistakes of those before us. Successful field commanders also know that good intelligence from active operations is an imperative if winning is the objective.
Now I'm going to introduce you to some relevant material by way of evidentiary material. Credit cycles. Formal economic literature frames the inevitable outcome of a period of unbridled credit expansion. For your purposes, it is enough to know that during the expansion phase — known as the acceleration phase in formal terms — consumer goods consumption increases, prompting primary and secondary producers to increase production.
Because final consumption values are partially fictional — in that the volumes are driven by borrowings, not real current incomes — there's a massive exaggeration created in global production activity and capacity. Clearly, this is not a sustainable condition, and when the chairs have all been removed, we move into a contraction phase. This is when fixed assets previously thought to be valuable turn into valueless assets.
As financial field commanders, you will need to understand that there is absolutely nothing you'll be able to do about this reality. To help you appreciate this not so subtle point, please refer to the experiences of the Japanese over the past two decades.
In a recent public address in Australia, the deputy governor of the Bank of Japan, speaking in front of a BIS — Bank for International Settlements — meeting, mentioned that over the past two decades their stock market index had lost about 80 percent of its previous value, and property values about the same. It is certain that the Japanese politicians were pressed by their citizens to do something about it. Probably they said they would, but to no avail. You surely would not be attracted to using their failed model.
Evidence of a global contraction and compression. My first attachment is a five-year chart for the Baltic dry-cargo index. On the left-hand side the credit bubble effect is most dramatic, with the index standing at about 11,000 in May of 2008. Six months later the index is at about 600. That's a stomach-churning drop of about 95 percent in six months' time. Ouch.
The bottom fell out of the dry-cargo shipping business in a six-month period and, for the most part, has not made any meaningful recovery four years later. This collapse was so devastating to the shipping industry that many participants have disappeared, including one British company with nearly a hundred years of business history and having survived the last major depression that we all talk about.
This index has been publicly available for those needing a global business activity litmus test for as long as I can remember. You know, I'm kind of old; I've got lots of grey hair. There is zero tolerance for not knowing about this index and its importance when crafting an operating budget, as you're now about to do.
The second attachment is the S&P/Case-Shiller home price index. This index was created decades ago to show home or residence or accommodation affordability on a national basis — first for the U.S., and now there's one in Canada. What you should take from this chart is that home unaffordability started to become an issue at the end of the 1990s. Some economists, including myself, believe that when the index is below 100, there will be a citizen symmetry achieved. You can see we are currently a long way from such a value.
Why should this be important? It is because you need to know how far we are away from personal economic stability symmetry for a majority of our citizens.
My third historical item is on the S&P report titled Canadian Provinces Refocus on Fiscal Balance as Economy Recovers: Report. You should characterize this report as a shot across the bow by a major credit-rating agency and an early warning that our fiscal house is not in order. The report authors refer to rising debt levels as not a good thing. Minister Flaherty has been saying much the same thing for nearly two years. The authors go on to advocate reductions in education and health spending and an increase in revenues — i.e., taxes.
I find this interference from outsiders of the province irritating. To arrive at a place where a credit-rating agency and lenders hold the whip hand is an indication of a very inadequate commandership.
Contemporary evidence — to the point more of today. Attached is a fistful of articles chronicling the collapse of the LNG opportunities that the government is so enthusiastically embracing as our economic salvation. Along with these LNG articles are a couple about copper and iron ore. They are meant to illustrate the fragility of commodity prices, which is another way of my suggesting that some of the ideas floating about are just major speculations, hopes, wishful thinking.
This experience is not new to B.C. When an economy is dependent upon production of primary commodities, it inhabits a particularly high fiscal-risk condition. Please remember the 1970s when coal was a flavour of the period. The Japanese were big buyers and were willing to make purchase contracts with domestic producers. What was being wilfully overlooked then was that the Japanese were simultaneously having the same discussions with other coal-producing countries.
Don't think for a minute that these buyers were happy with their contract prices or amounts. What was deliberately done was the creation of a global oversupply condition that caused producers to do what they always do in such circumstances — drop prices. Japanese buyers then achieved what they'd wanted, which was the transformation of the global coal business from a sellers' market to a buyers' market.
The result in B.C. was curtailment of price and volume of coal production and a number of stranded fixed assets, paid for by our governments. A stranded asset is one where a usable asset can no longer or not be deployed to earn income. B.C. Hydro, among others, had a few of those as well. The rush to help the natural gas industry looks like a rerun of this old movie.
Unless MLAs understand the risks involved and back away from providing financial aid to these privately owned corporations or operations, if the board of directors at Enbridge thinks it prudent to isolate the risks associated with the northern gateway project by having it legally located in a limited liability partnership, then you have to know someone else is a target for this risk. It certainly won't be the financing sector, so that leaves only the citizens, who are never asked yea or nay about so-called economic and business forecasts.
Part of what is used in drafting a budget is a so-called economic forecast. My reason for including comments about this process is to make you aware that they are universally flawed. First off, there is definitely a misuse of the word "forecast." Forecasting suggests certainty, and there never is that, particularly now. "Projection" is a better term, as it suggests there is a risk, when in fact there certainly is. Attached is another fistful of examples of forecast.
These are meant to illustrate what they all have in common. The first and most creative feature is that there is always a projection of economic and business growth in the coming year. The recently altered global outlook by the IMF illustrates this profoundly. After a recognition that the current year was not going to meet the previously published number, the IMF dialed it back with an adjustment to the next-year value, which, of course, is still greater than our current year. There are, in the attachments, comments about the IMF.
The second theme is exaggerated ego. I can go on, on that one.
So what do you do?
(a) You need to find new revenues but not from further pauperization of the general population. Regressive taxation, common in recent years, is only poll taxation in disguise, and the province's citizens are struggling with the issues of affordability already. That was what the repeal of the HST was about and has yet to be honoured. Look to free riders for new revenues.
(b) You need to freeze all new capital projects in B.C. as a signal to the likes of S&P that you have understood the message.
(c) You need to prohibit any use of provincial financial guarantees to any private corporation. This is a socialization of economic and investment risk for the benefit of private interests. Not doing so only invites a credit downgrade, which is probably in the works already.
(d) You need to consciously and formally acknowledge that the economic risks are probably at their highest levels since the 1980s and that you will therefore act accordingly. It's not time to accommodate want in a budget, but what about need only?
D. Horne (Chair): Thank you for your presentation. We will begin our questions with John Les.
J. Les: Thank you, Erik, for your presentation. It's certainly somewhat thought-provoking, laced with a little cynicism here and there, which I think is often very healthy and strong.
E. Andersen: It comes with the territory of being an economist.
J. Les: You refer to Standard and Poor's, and the like, several times. I'd go on to be a little bit more cynical than yourself in suggesting that they were the kinds of folks who were suggesting that investment products based on subprime mortgages were actually triple-A credits not too long ago, just to note that.
In one of your recommendations, then, I'd like a little bit more elaboration from you. You refer in your first one to free riders for new revenues. I'd be interested in your insights as to where some of those free riders might be found. I'm not suggesting there aren't any. I'm just asking you for your….
E. Andersen: Well, we could start with the banks.
J. Les: Okay. A little more, if you will.
E. Andersen: I don't think it's an honour to be a province with the lowest tax rate. I think that's a competition to the bottom of the pile economically. You have to tax according to the value that the place gives you. If you live in B.C. and you value living in B.C., you should pay the tax relevant to that. If you don't want to live in the Territories….
I think there's a relationship here that…. Being at the lowest level of taxation is not an honour, not at all.
G. Coons: Thank you, Erik. It's a lot of information to take in, in a short period of time. I'm going to have to go through this. Again, I want to follow up on John's question also, about the free riders. You mentioned banks. I'm sure you have an opinion about corporate taxes and perhaps taxes on those making quite a bit of money — say, over $200,000. Are you pushing forward a fair taxation system?
E. Andersen: Well, I'm not here promoting a fair taxation system per se. But if you want to hire me, I'll come up with one. I can do it in a nano.
G. Coons: We do have your contact number.
D. Horne (Chair): Thank you so much for your presentation. We'll move to our next presenter.
Our next presenter is Cowichan Carbon Busters, represented by Peter Nix. Peter, welcome to the committee. You have ten minutes, and your time begins now.
P. Nix: Thank you. The carbon buster is strictly a self-appointed title, by the way. I just gave it to myself.
I'm a retired environmental scientist. My last big job was with Suncor, and I've worked with Exxon Mobil and all the big fossil fuel companies. I'm pretty familiar with them. I quit because I was making a speech from my report on the reclamation of the tar sands, actually, and I saw that it was edited. It said something that I had never said in my report. It said: "The reclamation program will succeed." I never said that. I was pretty pissed, so I quit.
I realized I was a cog in a big machine. That big machine was not going to help my kids. It was going to help my paycheque, but not my kids. So I'm speaking from the heart today. I've given you a letter, and I'll refer to it, but I'm not going to read the letter or give you a lot of data about climate change and stuff like that. I'm trying to speak from the heart, my heart as the father of my kids and my grandchildren, because I'm angry, and I'm mad, and I'm sad.
My first job in the oil sands was to do the biology of the tailings ponds. I have to be short here. I got stuck in my little white aluminum boat on a floating mat of bitumen out in the tailings pond. I thought that might be a good metaphor for you guys, because I think as a society and you, maybe, as a committee…. I think we're stuck in old paradigms, as I think Ian mentioned. I really believe that. We've got to shed the old paradigms quickly.
I was also arrested this May 5. I was one of the people at White Rock. I stopped a coal train — along with Dr. Jaccard, by the way, who has helped formulate some of you guys' energy policies and was going to Washington the next week to advise the American government on energy policy. He would say what I'm saying, which is that we have to phase out the export of coal and fossil fuels. We have to stop burning fossil fuels. It's really simple. It's very, very hard, but it's really simple.
Science. I'm not going to argue. I think you guys all agree that climate change is happening. All science organizations in the world…. Thank God I don't have to go through that. I've been talking for 15 years, and I'm tired of talking, quite frankly. That's why I'm now involved in civil disobedience — because frankly, folks, I don't know how else we're going to change fast enough if not for something really dramatic. Rosa Parks did it in the southern States 50-60 years ago. She refused to sit in the back of the bus, and she sparked a revolution.
Am I naive? Am I stupid? Maybe, but I have to try, because, as Dr. Jaccard said in a workshop we had in Vancouver just a few weeks ago, we have to try. We're sending a letter from our graves to our children that we tried. That's what we're doing. We get pretty emotional about it, by the way.
The science. You know, 80 percent reductions by 2050, all that stuff that was generated from the United Nations, sort of sponsored reports — that's all obsolete now, folks, I'm sorry to say. We've done very little in the world. Carbon dioxide in the atmosphere is accelerating — the concentration is.
The latest science, and I gave you a link in my letter, says that we have to reduce carbon emissions by 6 percent a year, starting now. That's a massive, huge job, as you, I'm sure, know. It's going to be very hard. It's going to cause a lot of pain and grief, and not doing it is going to cause more pain and grief. That's the message from science. Forget all the data and all the rest of it.
My letter is a metaphor. I'm a microbiologist. In the 1700s people were dying like mad in European cities and cities all over the world from epidemics, plagues. It was terrible. We have no idea. It was terrible. A microbiologist called Louis Pasteur said: "Hey, guys, there are bacteria in that water. You can't see them. You think the water is clean. It's not."
That's my metaphor. We think the air is clean. It is not. It's going to kill a lot of people because it's not.
Throughout France and Britain especially — I don't know about China and other places — they instituted a water tax. The local municipalities had a water tax, and they used that tax to pipe water, to disinfect water. They stopped the plague, and they allowed cities to thrive and people to live, and they averted what was an ongoing human tragedy.
I am arguing that we need more of a carbon tax — a bigger, more comprehensive carbon tax — as fast as we can get it. That's what I'm asking you to consider. Just like in Europe, if we do that, we have a chance of mitigating the worst effects of climate change.
By the way, that carbon tax needs to be on exported fossil fuels also. If all the fossil fuel exports go ahead, as various government and corporate announcements look like, we will be exporting ten times the greenhouse gases that we emit locally, domestically — ten times.
I'm telling my local mayors and stuff: "You know, we have this great stuff. We have Bill 27. We have the climate action charter. This is good stuff. We're doing good work, but it's totally useless — totally — if we do not get to be activists and if we do not pound on the doors of provincial and federal governments and tell them that we have to phase out the export of fossil fuels."
Those fossil fuels are burned in India, and that air, that atmosphere, is the same atmosphere we have — the same. It will come back. Twenty percent of Pakistan was flooded a year or two ago. The temperatures in some countries are above 50 degrees centigrade lately. It's going to be a real mess.
If we're stuck in this mat of bitumen, it's also an opportunity. Every crisis is an opportunity. I don't know the ins and outs of your committee, but I do feel that we all have, and at all points in the economy…. At all points, myself and yourself, we have an opportunity to be leaders here, and I'm asking you to be a leader and to say to the other politicians and to the public that we have to have a higher carbon tax. We have to make fossil fuels uneconomic.
The carbon tax could be like a dividend. I'm not a tax expert. It could be given back to people. It could be put into green jobs locally. There are lots of things. I'm not pretending to be an expert on that. But we have to get the political message out and the political will that we have to do this.
It might mean that your jobs, like mine…. You might sacrifice your jobs, but I think it's worth it. I'm often asked…. "Well, they've produced a lot of carbon emissions in China," etc. This is a moral argument, basically. It doesn't really matter if we succeed or fail. The question is: what is our moral alternative? We have no alternative. If we care about the next generations, we have no alternative. We have to phase out fossil fuels. The best, simplest way to do that is a carbon tax.
That's the message I want you to carry. That's the message that I think is straight from science. That is what I'm asking you to do. I'll give over to time for questions.
D. Horne (Chair): Thank you for your presentation.
B. Ralston: I appreciate what you've said and the conviction that you bring to it. But there is a debate on the committee that we've had as we've gone about.
There are those in the committee who would seek to abolish the carbon tax even in its present — in your view, probably diminished — form. One of the things they speak to is the relative competitive position of export industries and the impact the carbon tax has on their competitive advantage.
What would you say to those people?
P. Nix: As far as I read, the world of the future is low carbon intensity. The countries and the places that have the lowest carbon intensity are going to be most competitive, the most prosperous. They know that in China. It's beyond my field of expertise — right? — so I'm telling you what I read.
The import of steel from China, for example, is going down. Why? Because it costs money. Why? Because the fossil fuels required to get it from China to America makes it uncompetitive. So steel mills are starting up again in the Rust Belt of the United States because of the lower carbon intensity.
Does that answer your question?
B. Ralston: Well, I think it's the sense. I'm sure that there are others here who will want to ask you questions as well.
P. Pimm: Sure, I'll weigh in on this discussion. It's an interesting one that you bring, and as we've travelled around the province, there have been many that have spoken, some not quite as passionately as you have, and there have been some that have spoken on the other side of the argument, completely opposite to where you are.
I think most of our committee members have varying degrees of differences. I will correct the record, though. There haven't been any of our committee members that have said that they want to see the tax abolished completely, not publicly that I know of, at least. Last year we made recommendations from this Finance Committee, and a lot of those recommendations have actually been taken up at this point in time.
Are we going to win the argument about who's right and who's wrong on this tax? I don't think we're going to win that one today. So I'm just going to comment. I'm not going to…. The only other thing is I will ask the question because I asked everybody that talked about carbon tax: did you present to the Finance Minister when he was asking for submissions on the carbon tax?
P. Nix: Well, that's what I'm doing — right?
P. Pimm: Well, no.
D. Horne (Chair): There was a separate process, which was….
P. Nix: Separate. Sorry. I wasn't aware of it.
P. Pimm: That's why I ask.
P. Nix: There's no scientific academy in the world — go to Saudi Arabia or anyplace — that does not agree that carbon emissions are causing climate breakdown, and the logical conclusion is that climate breakdown will destroy our kids' future. It's not a debate. So if there are any global warming deniers in the crowd, I don't debate it because there's no debate.
D. Horne (Chair): We'll end with a question from our Deputy Chair, Mable.
M. Elmore (Deputy Chair): Thanks for your presentation, Peter. You mentioned you were in Vancouver for a workshop. I was just curious to hear about some of your other actions or plans. Are you involved in organizing with other individuals? That's also part of the process in terms of bringing change, explaining the process and mobilizing folks. How's that going?
P. Nix: Well, I do a lot of things. We're going to stop another coal train, by the way. I put that out there. We feel we have to. We have to stop coal. Forty percent of the greenhouse gases in the atmosphere is caused by coal and the past 200 years of coal burning.
I'm a very active activist in my local community. I'm on the climate change advisory committee for the North Cowichan. I do my best. But I'm really tired of the talk. We're not getting there fast enough. The tragedy is the urgency of the science and the lack of urgency in the human response mechanism. That is the tragedy that we're facing. We need leadership from all points in society, from you, from me, from everybody. We need leaders who are prepared to be Winston Churchills and say: "You know what? I don't care. We're doing it."
D. Horne (Chair): Thank you.
I'll call our next presenter, being the University of Victoria Students Society, represented by Lucia and Kelsey.
Welcome, both. You have ten minutes to present, and you can begin anytime.
L. Orser: Thank you for having us. Sounds good. I'll begin by introducing myself. My name is Lucia Orser. I'm the executive director of external relations with the University of Victoria Students Society, and this here is my colleague Kelsey Mech, who is a director-at-large with the UVSS.
Just to provide some context, the University of Victoria Students Society represents over 17,000 undergraduate students, and we're currently doing work with nine post-secondary institutions on the "Where's the funding?" campaign. This includes all the major research universities as well as some small colleges and polytechnical institutes. It represents over 180,000 students in the province.
The "Where's the funding?" campaign has three goals: first, to eliminate interest rates on student loans; second, to reinstate an upfront, needs-based grants program in the province; and third, to increase core funding to colleges and universities.
Over the last decade in B.C. we've gone from having the most accessible post-secondary education system to one of the most mediocre or the worst, depending on which indicators you look at. B.C. is the only province in Canada without an upfront, needs-based provincial grants program and charges the highest interest rates on student loans.
This year UVic is facing a 4 percent cut, which means another year where students are paying more for less. Students in B.C. now graduate with an average of $27,000 in student debt, and this figure comes from the now disbanded millennium scholarship foundation out of a study that was conducted in 2009. We can only assume that that number has gone up in the past number of years.
At this time I'll pass it over to Kelsey, who's going to cover the first section of our presentation.
K. Mech: Today I'll be making the argument for the reinstatement of the provincial needs-based grant program that Lucia mentioned in the 2013 provincial budget. The lack of a provincial needs-based grant program is a major barrier for many students wishing to access post-secondary education. A provincial grants program is a key policy provision that will improve access to education and develop a skilled workforce needed for a prosperous economy.
There are two main arguments that I would like to make today. Firstly, needs-based grant programs are beneficial both socially and economically in that they reduce the amount of debt that students incur, thus allowing graduates to invest in B.C.'s economy. Secondly, an upfront, needs-based grants program increases the ability of low-income students to access post-secondary education.
Needs-based grants are economically preferable to student loans and back-end grants and have a direct positive impact on student finances. Upfront grants reduce unmet financial need that is not covered in student aid programs, such as for food, books or rent. In addition, students who receive sufficient financial aid can concentrate more on school than on part-time or in some cases even full-time work during their university or college career.
There are four major benefits of providing students with grants instead of or in addition to loans and loan forgiveness programs. First, grants reduce the accumulation of debt. Massive debt loads prevent new graduates from moving on to post-degree professional programs or making economic investments after they graduate.
Second, grants help people overcome financial barriers that prevent them from accessing post-secondary education and thus developing B.C.'s labour force.
Third, they encourage British Columbians to stay within the province to pursue their education, and this prevents brain drain from other provinces, especially in the case of professional programs, in which many people even leave to the United States.
Fourth, policy-makers can use grants as a financial tool to improve academic persistence by allowing students to focus more on academics and less on finances. Studies by the Canada Millennium Scholarship Foundation describe examples of the impact of non-repayable assistance. Grants reduce student debt, improve students' likelihood of completing their studies and act as an economic stimulus.
In terms of persistence levels, students with large debt loads are more likely than those with little debt to abandon their studies before graduation. Students who receive a grant in addition to their loan are substantially more likely to complete their studies. Among those who qualify for more than $10,000 in financial aid, recipients of loans and grants are five times as likely as those who only receive loans to complete their program.
Finally, aside from the economic benefits of instituting a needs-based grants program, we also need to realize that this is an issue of fairness and equity.
On that note, I'd like to hand it back over to Lucia to talk to you briefly about interest rates.
L. Orser: To provide some background on the issue of interest rates, right now the government borrows at 1 percent below prime and charges students prime plus 2.5 percent, essentially making 3.5 percent off each student loan.
B.C. is the province in Canada with the highest interest rates on student loans, as I mentioned before. One thing we know about high interest rates is that they lead to debt aversion. When students do not enter the post-secondary system or delay their graduation due to debt aversion, the government loses out on potential tax revenue. Additionally, high interest rates are inequitable. Low-income students pay a premium for their education that students whose parents pay for their education don't have to.
There are two main points that I'd like to put forth today. First, that the current system of high interest rates on student loans is detrimental to B.C.'s economy for students and non-students. Second, the current loan system is inequitable because it creates a barrier to accessing post-secondary education for low-income students.
The number one concern that we have heard from government about lowering interest rates on student loans is about the need to account for the high default rate in institutions. The irony in this is that students are actually defaulting because interest rates are too high, and they can't afford to pay for their education over the long term.
Default rates have also dropped at public post-secondary institutions by 14 percent in the last ten years. In fact, the highest default rates are at private institutions, not public institutions.
Over the next ten years British Columbia faces a demographic shift in which large numbers of older workers will be leaving the workforce, leaving a skills shortage of younger workers without the training to fill their positions. According to the B.C. jobs plan and the Ministry of Advanced Education, 75 percent of jobs in B.C. will soon require a post-secondary education.
Debt aversion, as I mentioned before, as a social phenomenon is difficult to measure for high school graduates who have never attended post-secondary education, but one study shows that 20 percent of high school graduates from 1989 delayed entry into university for an average of four to six years. We can measure another facet of debt aversion by the numbers of students who work full-time or part-time to pay for their studies.
We need our student aid program in B.C. to create conditions where taking on debt is not an overwhelming burden that forces students to work throughout their degree, in turn extending their stay in university. Lowering interest rates on student loans is part of making the student aid system attractive for low-income students and lessening their burden.
Additionally, the current loan system is inequitable because it creates a barrier to accessing post-secondary education for low-income people. When low-income students have ready access to post-secondary education with no fear of major debt, they enter the system and the demand on social services lessens, and they're more likely to pay more taxes over their lifetime.
In conclusion, we've met with staff from the Ministry of Advanced Education, and they've told us that it would only cost $30 million to eliminate interest rates on student loans. For this small cost, we can boost B.C.'s economy while at the same time reducing barriers to access colleges and universities.
K. Mech: The public is clear on this issue. Statistics from the Federation of Post-Secondary Educators indicate that 92 percent of those surveyed see higher tuition fees as a barrier to accessing post-secondary education. Furthermore, 84 percent think student debt makes it harder to complete programs and degrees.
Low-income students are the least likely to attend college and university, the most likely to rely on social services and, in effect, have the most to gain and the most to contribute from a post-secondary education.
B.C. has fallen behind other provinces who understand the economic advantages of giving people at the lowest socioeconomic level access to post-secondary education. This has proven to raise people out of poverty and reduces the likelihood that they will access social services and the health care system, and that, in turn, they will contribute more through taxes.
With that, we are here today to call on this committee to recommend that the provincial government prioritize the elimination of interest rates on student loans and the reinstatement of an upfront, needs-based grant program.
As we have said, these two programs are proven to have long-term economic and social benefits. The current government has the opportunity to make B.C. a leader in post-secondary education by making ours the most accessible and most affordable system in the country.
D. Horne (Chair): Thank you so much for your presentation.
Just to clarify, before we get to the questions, on the $30 million that is the cost of dealing with the interest rates. That's the cost of British Columbia borrowing the money, I guess, because we don't actually make 3½ percent on the loans. Basically, we guarantee it, and it's actually at cost already. The student loan program is actually at cost already. It is partly to do with the defaults but not completely to do with the defaults.
That amount that you pointed out — what is that based upon?
L. Orser: That was a number that we got directly from the Minister of Advanced Education last year during a lobby session that we did with both NDP and Liberal MLAs. That was the number that she provided us with at that time.
You know, I accept your correction if you don't find that to be true. But I would maintain that the cost of eliminating or lowering interest rates on student loans…. I mean, the societal and economic benefits still stand.
D. Horne (Chair): Sure. Well, basically, each percent you lower it would be about $20 a month for the average loan, so it's about $20 a month for each percent.
We'll start our questions with our Deputy Chair, Mable.
M. Elmore (Deputy Chair): Thanks, Kelsey and Lucia. It's a good presentation.
In terms of your two main recommendations to reduce or eliminate interest on student loans and re-establish a provincial grants program, I think it's a compelling argument that putting those costs on students up front decreases the percentage of them graduating, finishing their program.
Often it's once students have the ability to graduate with their degree and they earn higher incomes, they pay more taxes, and that's where we see a return to society in terms of their contributions.
I was wondering if you can tell me a little bit more about the Where's the Funding campaign and some of the other activities and actions you have planned.
L. Orser: For the upcoming year? The Where's the Funding campaign, as I mentioned, is the largest coalition or campaign for affordable post-secondary education in the province. We're currently larger even than the Canadian Federation of Students. We've really prided ourselves over the last two years we've been running that that we've had a very good relationship with all the parties that currently sit in the Legislature.
For the upcoming year we are running a campaign called the Vote Education campaign, which is encouraging our students and members of the public to take the pledge to vote education in the May 2013 provincial election and to support the party which has the best platform on post-secondary education.
It's our position that education issues are non-ideological, as we've seen in provinces across the country. We've seen Conservative governments in Newfoundland and Labrador, our own federal Conservative government as well as governments to the far left implement real changes to the post-secondary education system that have really made a difference for student affordability.
I'll just reiterate. We rightly see this issue as being non-ideological, and we're looking forward to having conversations with all the four major political parties in the province in the coming months about how we can incorporate education issues into the platforms during the upcoming election.
M. Dalton: Just following up on Doug's comments. Thank you for your presentation, Kelsey and Lucia.
Just a comment that the interest rates are not a moneymaker for us. Matter of fact, banks used to be the people that loaned it, and it was guaranteed by the governments. They wanted to get out of it, so the provincial government actually picked up the pieces from that.
Right now I think the rates, by what you're calculating, are probably about 4½ percent, 5 percent. That really is a historic low. Years ago, you were looking at a lot higher percentages. It's actually, as far as the terms, pretty good. But it's something we need to look at and to relieve the burden as much as possible.
Were you aware of the announcement a couple of days ago where the on-line textbooks for 40 courses, the most popular courses, are now going to be free for students?
L. Orser: Yeah, I am aware of it, and it's an excellent program. I congratulate the minister's office on that one. We really do support any initiative that makes life easier for students — I think, certainly, for low-income students. The number one thing that we see low-income students doing at our university and what we've heard from students is that the first sacrifice is textbooks at the beginning of the semester. I'm sure you can imagine why.
Although we think this is a great program, and we really see the benefit of this program, I think that there are some broader issues in the system with regards to interest rates and the need for upfront grants that will really help to make students' lives more affordable. In addition to initiatives around textbooks that we've seen in other provinces — and certainly in California, most notably, where I think this initiative was modelled after — we'd really like to see some changes to the post-secondary and student-aid system which would help students in the long term as well.
D. Horne (Chair): Unfortunately, we've come to end of our time, but I thank you very much for your presentation.
L. Orser: Thank you for your time.
D. Horne (Chair): I'll now call our next presenter, Trevor Hirschfield.
Trevor, welcome to our committee. As you've probably heard several times now, you have ten minutes to present and five minutes for questions, and your time begins anytime.
T. Hirschfield: Thanks for having me. I'm here as a representative for Sport B.C. I'm here to talk to you today about the legacy fund and its continuance.
A little bit about myself. Sport has been a big impact in my life. I use sport as kind of that crutch to help me get my life back on track after my injury. I understand the importance of sport in your life and how it not only helps you through things better; it helps you build your life. It gives you a platform to grow your life on and to get out there.
I'd first like to start by thanking the province of B.C. They've been strong supporters of sport and funding with the legacy fund. We're basically just asking for its continuance in the next three years' budget plan. We all know the importance of having our kids stay active and be active. Personally, I'm really supportive of creating programs or standing behind programs that help kids get active and give them the opportunity to be out there.
I'm in the process of starting my own foundation in Parksville to provide grants to kids who can't get their own money for sport. They can't afford hockey. They can't afford registration. I understand the importance of kids being active. The legacy program has helped communities fund programs like KidSport and after-school programs and Sport on the Move. These programs are great. They've helped kids who might not necessarily have the money to get out there and get involved in their communities. It's these programs that help strengthen communities.
Along with the legacy fund, we're hoping for that multi-year investment. Programs like KidSport need that consistency to help plan and move forward. The Medals Matter. Me being a Paralympic athlete, I was just in London. I played wheelchair rugby, won a silver medal. I've been going to schools and talking to kids. Having that medal there not only….
Like today, for instance, I was at my mom's house, and the kid across the street she grew up teaching came over. He was inside watching TV, and she brought him over to get a picture with the medal. When I left my mom's house to come here, he was outside playing hockey in his front yard. It's not a big deal, but it gives kids the chance to see that they can strive for goals and they can have these goals that they can meet.
I think it's important to continue with the legacy fund over the next few years. That $10 million investment helps so many programs in our communities, and it strengthens our communities.
I'm an athlete. I don't have a lot of numbers for you, or figures. From what I've seen, I do support the whole…. Staying active in your community and getting kids out there — I know how important it is. I know how sport has been such a big influence in my life and where I'm at today. I couldn't tell you where I would be without sport. It's given me my life back.
I'm a big promoter of living an active lifestyle and giving kids the chance to at least try sport. It's programs like the legacy fund that help kids who may not be able to afford it, whose families can't afford it.
Again, thank you for your funding and your support. We're just looking for a continuance over the next three years in the budget plan.
D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with Gary.
G. Coons: Thank you so much, Trevor. Congratulations, and thank you for what you do in representing us, and representing us well, at the international level in your abilities. We've had lots of Sport B.C. people come in, pushing the premise of continuing the fund, especially the multi-year investment. I think that's key. I sort of want to get your opinion on how important that is to have a multi-year investment versus…. Is it year-to-year right now, or you've had a three-year? Maybe you could….
T. Hirschfield: I believe it was a multi-year investment. It started in 2010 with the Vancouver Olympics and Paralympics. It's ending March 2013, I believe.
Me personally, being a higher-level athlete…. We commit our time for four years at a time when we sign on with our team. I know that having that multi-year commitment for the higher-level sports is key to knowing which path you're going to take when you're looking for training towards Paralympics for us, knowing where you can get your major competitions and stuff.
On the other level, programs like KidSport and stuff, that multi-year commitment helps them in planning for the future. Just for instance, I was in Toronto three weekends ago. I don't know if you've heard of AthletesCAN. It's a program. We do a yearly AGM. I'm the athlete rep for wheelchair rugby, so I attend this.
Every Friday, depending on where the AGM is, we go to a school, and we do KidsCAN. We go to a school, and we all demo our sport for kids. It's knowing that they're going to be able to do that program next year, where in advance they can set up different demos or different events in the future, instead of just going on a yearly thing.
P. Pimm: Trevor, thank you very much for the presentation. Congratulations on your win in London. That's fantastic.
You know, sports touch…. I think there's one thing I can say quite honestly. Both sides of government are on this committee, and this is the one issue that we're all probably more united on than anything else, I would have to say.
It's funny, when talk about sports. Even my counterpart on the other end, Gary Coons…. I played senior hockey. I didn't realize until I was sitting in the airport one day with Gary that I played against Gary when he lived in Prince Rupert and I was in Fort St. John. And here I am, still playing against him today. It is one of those things that brings us all together.
I just congratulate you. I don't have a question for you, but certainly, we hear you very clear.
M. Elmore (Deputy Chair): Hi, Trevor. Thanks and congratulations. Very exciting. Thanks for sharing your stories about going around to different schools and talking to kids. I think it's really inspiring for kids to see that.
My question was specifically…. You're asking for the legacy fund to be continued for another year. Do you know what the amount of the funding is for the three years?
T. Hirschfield: We're asking for the multi-year commitment. I believe it was $10 million over three years, the last commitment. We're not asking for more. We're looking for a continuance of that.
D. Horne (Chair): We'll end with a question from Dave.
D. Hayer: Thank you very much, Trevor. We have seen many presentations from Sport B.C. and their representatives. Thank you for coming over here and also for representing Canada and British Columbia in the Olympics in London.
In some of the countries Olympians get some extra support. Once you're involved with it, when you come back, some of the businesses give you some work — right? — where basically you are their PR person. At the same time, they give you some money so that you can get trained for the next Olympics and all of that — or even, when you come back, hire you and provide you some extra funding.
Are there any programs here by some of the businesses? I know Royal Bank does some. Are there other businesses that do the same type of thing, trying to help the athletes to be competitive and helping them when they get back from the Olympics?
T. Hirschfield: I know Royal Bank does have a program. I'm not too familiar with it. I have applied for it, but they really want you around if they're going to accept you. It's hard for a lot of athletes, with their schedules, so it's mostly for retired athletes or people who are on the verge of retiring.
There are not a whole lot of programs put in place for Paralympics. I can't comment on Olympic athletes, because we are two different organizations. I know that the Paralympics maybe doesn't have as much support that way. I know we don't television-wise. We don't get the same coverage, so maybe the faces aren't as familiar. Therefore, companies aren't jumping on board with the Paralympic athletes as much as they are with Olympic athletes. I can't comment on that.
I know that there are programs. The Royal Bank does have a program, but I'm not very familiar with it.
D. Hayer: Thank you very much. My constituents always tell me the Paralympics and the Olympics are very, very important. Thank you for participating and encouraging other youth to look forward to participating in the future and for giving them good values, good morals, good ethics. Thank you.
D. Horne (Chair): Great. Thank you so much for your time today.
I'll now call our next presenter, who is Dawn Clark from the Haven Society.
Dawn, welcome to the committee. You have ten minutes to present, and you can begin right now.
D. Clark: Thank you for allowing me to represent our agency. My name is Dawn Clark, and I'm the housing manager at Haven Society.
Haven Society is an anti-violence, non-profit organization serving mid–Vancouver Island. We provide services to women, children, youth and families who are or have been impacted by violence. Over the past 34 years Haven Society has evolved into a full-service agency. Our programs provide everything from shelter to emotional support, counselling, advocacy, court accompaniment and, most importantly, a safe place to begin healing from the abuse.
Over the past year 3,500 women and children in the mid–Vancouver Island area received support from our organization to deal with issues of abuse and violence. Presently we receive government funding for the following programs: the transition house, community victim services, Stopping the Violence outreach and counselling programs, Children Who Witness Abuse, and B.C. Housing rent subsidy funding.
With community assistance, Haven is able to provide a number of non-government-funded services such as access to second-stage housing, in-depth trauma counselling, extended childminding services, drop-in services, men's programming, volunteer services, furniture, food, clothing and much more, all through private sector funds or supports.
In our work we meet women and children who have left or need to leave dangerous situations, often with nothing more than the clothes on their back or with very little possessions. Community donations and private sector financial support enable us to assist these women to access the necessary supports that are not always available through mandated services.
In the Better Outcomes, Stronger Communities: Enhancing the B.C. Government–Non-Profit Relationship community consultation report of November 2008 a number of recommendations designed to promote goodwill and a healthy partnership between our two sectors were identified. Prioritized recommendations in this report are as follows: increase long-term and stable funding for non-profits; implementation of multi-year contracts; assistance with leadership development within organizations; a coordinated structure for the non-profit to have a voice; simplification of accountability and contracting processes; strategies for equitable compensation for the non-profit sector; and assessment of new and existing programs to meet our increasingly diverse social needs.
We support the above-mentioned guiding principles for partnership between government and the non-profit sectors developed by the government/non-profit initiative. These principles support a framework that is citizen-focused, cooperative and collaborative, results-driven, inclusive and diverse, innovative, sustainable, progressive-thinking, accountable and transparent — all the things our agency believes in.
Nonetheless, we are concerned and full of questions about the new direction the government is taking on these issues. What does the government mean when they speak of doing business differently with non-profits? What would be the resulting issues and impact on the day-to-day operations for non-profits? What does this relationship mean? Who defines it? What does productive, effective and efficient programming mean? What is the new paradigm? Are non-profits expected to be totally self-sufficient and not reliant on government to fund current core services?
Our staff stand at the front line every day and work with some of the most marginalized and economically disadvantaged people in our community — women, children, youth and families. Many of our clients come to us when they are at their most vulnerable, both physically and emotionally.
Haven understands the importance of being fiscally responsible. We are fully aware of the economic difficulties B.C. is currently facing. As an agency, we have implemented many cost-saving measures while continuing to provide a high level of quality service.
We see women every day at our agency who remain in unsafe situations and rely upon our agency to help them develop the tools and access resources that will help them better manage their circumstances. Many of the women we work with have been severely traumatized by the violence they have experienced and see agencies such as ours as a safe harbour and the beginning of their road to recovery.
If access to our government-funded core services is further limited by funding restraints, we will see more women staying in violent relationships, higher health care costs, increased policing efforts, long-term trauma impact and a further perpetuation of cyclical domestic violence. By offering the services we do, our agency is able to intervene and act as change agents at a critical juncture in the lives of many of the women we serve.
Our agency has had to cut hours in all of our programs as costs increase and funding formulas remain static. Since the current economic downturn, we have seen a rise in requests for services. This has resulted in longer wait-lists and some people not being able to access programming. For example, at the transition house, we have seen an increase in shelter requests. During the 2011 and 2012 fiscal year, we had 383 requests for services from women impacted by violence but were only able to house 143 women and 94 children.
This means that 62 percent of those requesting service may have remained in unsafe conditions, were placed on a wait-list, relocated to inadequate and unsafe housing or needed to leave the very communities where their support systems are. Many of our clients have told us that the services we provide have literally saved their lives.
As an agency, we are running lean. We are not able to meet all the demands that present at our door on a daily basis. The truth is that violence against women is prevalent in our society. It is so systemic that it has been identified as a global issue by both the World Health Organization and the United Nations.
We see the notion of a social enterprise as allowing us to be able to continue to expand the services not covered by core funding. If we are required to use a social enterprise model to partially fund current government-funded programs, we will likely compete with the small businesses that so generously support us.
In addition, non-profits may become highly competitive, less collegial and more focused on their social enterprise and money-making opportunities than on the clients we are there to serve.
According to Claudette Bradshaw, a member of the New Brunswick Community Non-Profit Task Force, non-profit organizations are the cornerstones of Canadian communities. "Our quality of life, our economic strength and the vitality of our democratic institutions depend on the vibrancy of these independent sectors and the support they provide."
We at Haven believe a social service net is integral to and is the backbone of our national identity. As Canadians, we take pride in being able to provide a social structure that supports those who are the most disadvantaged in our society. We acknowledge the need to be creative and innovative with our service model deliveries. However, we also believe it is critical that the above-mentioned factors are taken into consideration before any revisions to the way we do business and core program funding is decided upon.
We believe that the best way to support services such as ours is through an adequate and sustainable funding model as outlined in the government non-profit initiative.
In closing, I wish to acknowledge the members of this committee for allowing our agency an opportunity to be heard.
D. Horne (Chair): Thank you so much for your presentation. We'll begin our questions with our Deputy Chair, Mable.
M. Elmore (Deputy Chair): Hi Dawn. Thanks for your presentation.
With your recommendation for the funding model to be used in GNPI, is that in reference to the…? Is that the Better Outcomes, Stronger Communities report, or is that a separate…?
D. Clark: No. That is that report.
M. Elmore (Deputy Chair): It's that report. Okay. I know you raised a number of questions and concerns with respect to the new direction the government is taking on a whole scope of issues and what that means and a possible transition to other models or encouraging a social enterprise model. Are those just general concerns or concerns that have come up? Where do those originate?
D. Clark: Those concerns are concerns that we at our agency have in terms of discussion. As I said, we're a non-profit organization. Our core funding is dependent upon the government supporting us in order to run those programs, and we also look towards our communities to support the value-added things that we're able to do. We believe that without there being an in-depth discussion and a consideration of the concerns that I raised in my presentation, we could be in direct conflict with the small businesses in our communities, and that could be to the detriment of service providers, as opposed to being able to support the work that we're doing.
M. Elmore (Deputy Chair): We had a presentation in Coquitlam from the Tri-City Transitions Society, which raised concerns about the possible transition for the request for proposals, the RFP, the proposal process that is being brought in for community services, particularly for some of these programs — Stopping the Violence. Is that something specifically that you're concerned about, that the Haven Society is…?
D. Clark: Definitely. We're an agency that has provided those services for a number of years. We believe that the people who provide those services, that work in the program have a high level of expertise. We're a trusted organization. We bring a specific analysis to the work that is supportive of the women and children who access services, so that is something that we've developed over years of providing those services and research and empirical evidence. It's hard to bring that into the work if you don't come from that framework.
D. Horne (Chair): Thank you so much for your presentation and being here with us today.
We will now call our next presenter, Darren Brown, from the Cement Association of Canada.
Darren, welcome to the committee. You have ten minutes to present, and your time begins now.
D. Brown: Good evening. My name is Darren Brown, and I'm the director of environmental policy with the Cement Association of Canada. I'd like to thank the Select Standing Committee on Finance and Government Services for the opportunity to attend this hearing and represent the B.C. cement producers.
The purpose of my presentation to you this evening is to update you on the continued impacts the carbon tax is having on our industry. This presentation comes as a follow-up to one given by my colleague Michael McSweeney in Kamloops on September 21, 2011. Shortly after his presentation, on November 15, 2011, this committee tabled its annual consultation report in the B.C. Legislature.
The committee made 75 recommendations to the B.C. government on the priorities it should address in the 2012 budget. Of those 75 recommendations, five of them were of direct relevance to the B.C. cement producers.
Listed within the section on revising tax policy, these included: capping the carbon tax at the rate as of July 1, 2011; addressing the inequity for B.C. cement producers arising from imported cement not being subject to the carbon tax; reviewing the impacts of the carbon tax on all business sectors and develop a strategy to keep B.C. businesses competitive with other jurisdictions; considering immediate carbon tax exclusions for agriculture, including the greenhouse sector, and public institutions; and stopping further expenditures on the development of cap-and-trade until the province has sufficient trading partners to trade with.
We want to thank the committee for making these recommendations and are pleased to report that we continue to work with the government on this file. We hope that once the carbon tax review is complete, our issues will be dealt with in the next provincial budget.
I want to update the committee on where we stand today. Last year at the time the presentation was given to you in Kamloops, 23 percent of market share belonged to imported cement. Based on economic activity in the first half of 2012, with the carbon tax now at $30 per tonne of CO2, imports have risen to 34 percent of total domestic cement consumption.
Please let me reinforce our comments from last year. The B.C. cement producers are not asking to be excluded from the carbon tax. We support the B.C. government's commitment to reducing greenhouse gas emissions. We simply ask that everyone do their part. By not applying the carbon tax to imported cement, the policy not only hurts the domestic cement producers and the B.C. families they support, but it does absolutely nothing to reduce GHG emissions or encourage environmentally sustainable business practices.
We have been recommending for a few years now that the B.C. government should apply the carbon tax at the point of sale of cement where cement is transferred to the concrete industry. This way, all cement used in B.C. will pay the carbon tax. It will be fair because every cement producer in B.C., Alberta, Washington and China will pay the same B.C. carbon taxes. This change will help families by saving jobs, recapture lost B.C. government revenue and allow for genuine GHG emission reductions. In order to avoid double taxation, the B.C. cement producers would receive an input tax credit for carbon tax paid on fuel.
Moving the carbon tax on cement to the point of sale is a simple idea that would protect B.C. families, recreate B.C. employment, recover the B.C. government's revenues by millions of dollars and reduce the GHGs introduced into the environment. As mentioned in our last presentation to the committee, it is a win-win scenario.
So you are aware, we have participated in the carbon tax review and provided a submission to the Ministry of Finance outlining possible solutions, including moving carbon tax to the point of sale of cement. We will explore any and all options which would address the competitive impacts of the carbon tax. We hope the carbon tax review and Budget 2013 will address the inequity our industry faces.
Thank you for your time. I'm happy to answer any questions you have.
D. Horne (Chair): Great, Darren. Thank you for your presentation. We'll begin our questions with Pat.
P. Pimm: Thanks a lot, Darren. I have to say I'm very troubled by the increase I see from 23 percent to 34 percent. Can you tell me what it was two years previous to that? Do you have that number off the top of your head? I know you've already presented that to the Finance Minister, so I'm not going to ask you that question.
D. Brown: Prior to the inception of the carbon tax we were roughly 4 percent to 6.5 percent. After the carbon tax we've seen a steady increase of imported cement. As to now, based on Q2, we are at 34 percent imports.
D. Hayer: Thank you very much, Darren, for your presentation. We have many people telling us that with the carbon tax, some of the jobs are going away to other places. I mean, you have just stated there's almost a 48 percent increase in imports of cement.
Do you have any idea how many jobs we have probably lost that normally British Columbians would be having because of the carbon tax that we have? We have increased the import of cement from 23 percent to 34 percent, which is approximately a 48 percent increase in a very short time.
D. Brown: I can tell you that our cement kilns, with Lafarge, both in Richmond and in Kamloops, and Lehigh in Delta, have experienced reductions in operating capacity from close to, say, 90 or 95 percent down to 55 percent. I would have to get back to you on direct job losses, but I can tell you right now that there have been layoffs and long periods of the kilns not operating.
D. Hayer: Can you also let us know what type of pay these workers who were working there would be making? Are these minimum-paying jobs or much more than that? Can you let us know?
D. Brown: No, these are well-paid jobs. These are definitely well-paid jobs.
B. Ralston: I just want a little bit more detail on your proposition that the assessment of the tax be transferred to the point of sale. I'm interested in how that would work. Are there any other commodities where it's applied in a similar fashion?
D. Brown: Thanks, Bruce. I can't speak to other commodities, but in the example of cement we have developed basically a schedule that could be attached to the existing carbon tax regulation that follows the various types of cement that are available.
B. Ralston: Is it your view, based on your knowledge of the industry and your knowledge of construction practice, that this is, in fact, something that's enforceable?
D. Brown: Sorry. In terms of…?
B. Ralston: Well, you're proposing that the tax be assessed at the point of sale. So obviously, people are buying cement for construction projects. Presumably, it wouldn't be your members. So how would that…? I mean, is that enforceable? Or would people be able to elude that form of taxation? I’m just wondering whether it would be effective — is basically, I guess, my question.
D. Brown: Well, in British Columbia, from our understanding, there are only four sellers of cement. The way it would work is that the seller of cement to the purchaser, which would be the concrete industry, would collect and then remit that tax to the B.C. government. So it's a relatively small group of individuals. In terms of enforceability, we feel that it would be easily enforced.
J. Les: Thanks, Darren, for your presentation. I just need a little bit more information from you. What is the total amount of carbon tax paid now by the four cement sellers in British Columbia, and how much would be paid if the tax were collected at point of sale?
D. Brown: Right. I don't have the exact number for you in terms of what the three cement manufacturing companies pay per annum. But the carbon tax that's currently paid on fuel — the way we would determine it to be paid on cement is that it would be equivalent. So what they pay on fuel right now would be transferred down to the product.
The way it works in cement manufacturing is that the intermediate product, called clinker, is the one that produces the bulk of the emissions. We know exactly how much fuel it takes to create the clinker, and we know how much emissions are generated from combusting that fuel, and we can simply transfer that down to the cement product based on the percentage of clinker in the cement product.
J. Les: Right. I think it's important that you get that additional information to us. I need to try and wrap my head around that.
The other thing we sometimes — I think all of us — share is a concern for things like affordable housing. As we broaden and expand and deepen taxation, there are downstream impacts of all of these kinds of policies. So I think in order to be able to make a balanced decision, we need to know those numbers so that we just don't kind of flail away blindly as government is sometimes wont to do.
D. Brown: I know I can tell you it's several million dollars.
J. Les: I'm sure it is.
D. Brown: Yeah. But I can follow up with you directly, with the committee.
D. Horne (Chair): If you could follow up with the committee, that would be good.
M. Dalton: Is the competitive advantage that the cement that we're importing…? Would you say it's directly proportional to the carbon tax, or is it more than that?
D. Brown: We would say that it's directly proportional to the carbon tax. Prior to the inception of carbon tax, we operated at about 4 to 6½ percent imports. Now that the carbon tax is in place and has been increasing every year, we've seen that increase in imported cement up to Q2, which is 34 percent.
M. Dalton: If I can just follow up on that. Is there a reason why it's not put on imported cement? Is that because of trade agreements or not? I understand it's not manufactured here, but we can choose to go ahead and put this tax on. That's our own prerogative. Is that correct?
D. Horne (Chair): Remember what Zirnhelt once said: "Government can do anything it wants."
D. Brown: Well, I mean, that's the one concern that some have had. If the provincial government decides to put a tax on all cement that's utilized in British Columbia, our members are subject to it and importers are subject to it. From our perspective, it's not going to be an issue with the World Trade Organization.
D. Horne (Chair): Thank you so much for your presentation.
I'll now call our next presenter, the Federation of Independent School Associations in British Columbia and Peter Froese.
Peter, welcome to the committee. You have ten minutes to present. Begin now.
P. Froese: Thank you, members of the Select Standing Committee on Finance and Government Services. My name is Peter Froese, and I'm the executive director of the Federation of Independent Schools for British Columbia.
I am here on behalf of parents — parents of 67,000 students — who educate their children in independent schools. At the present time FISA represents 91 percent of the total enrolment of families that send their kids to independent schools. The total is 73,000 in the province at the present time.
I will not be reading this report that's been provided to you. Rather, I'll identify specific highlights that are important to this issue. The purpose of this presentation is to address a perceived inequity in the manner in which the learning improvement fund, known as the LIF, is being provided to K-to-12 students in the public schools but not to similarly needy students in independent schools.
The Education Improvement Act, which became law on April 14 of 2012, created a new grant. It enabled boards of education to provide additional learning resources to schools. The government budgeted $30 million in 2011-12. It's planning on budgeting $60 million in '12-13 and $75 million in '13-14. This fund is to provide grants to schools that can demonstrate a need for assistance for teachers in classrooms where more students have significant learning and behavioural needs than is typical in a normal teaching classroom.
Within the independent schools, our concern is that the LIF is being allocated to public school districts only on a per-student operating grant. It's being allocated outside of the operating block, which makes these funds unavailable to independent schools.
During the past few years we've heard a lot of examples from educators and advocates for improved funding for learning resources within classrooms in British Columbia — especially during the negotiations this past year between the teachers union and the government. There are several stories that we can identify. I'd like to just identify two.
This one comes from Quesnel. "I am teaching a split grade 6-7 classroom in Quesnel. I have 41 percent of students on IEPs." Heather Olson, teacher.
Another one: "A number of our schools have a significant proportion of their population composed of students who require IEPs. Most of these students are off-reserve First Nations students. We feel that the challenges could be alleviated with additional funding for learning resources." This comes from Francis Schander and Lisa Stevens, special education coordinators.
I'm sure that you've heard similar stories and probably feel somewhat helpless in how best to address the needs of learning students in our province. What might surprise you is that the examples that I just referenced came from classrooms in independent schools. I have provided the Chair of this committee with 180 letters of support that have come from independent school parents, educators — all in support of the LIF funding.
Class composition issues are a reality for independent schools, just as they are in the public sector. In April of 2011 FISA conducted a survey of special needs in independent schools. Our schools indicated to us that 14.4 percent of their total enrolment is receiving some form of learning intervention.
The interventions included learning assistance, behavioural support, physical therapy, counselling, deaf and hearing support, occupational therapy, speech and language pathology, psychological assessments and mobility specialists, just to name a few. There is a lot of support being offered to students with special needs in independent schools. Most schools have to supplement the special education grant from operating costs in order to cover these special education costs.
Since 2005 in independent schools, identified students with special needs have been funded by the government at 100 percent of the rate provided to similar students in the public sector. We thank the government for enabling this funding support for high-need students in independent schools. However, one of the consequences for full special needs funding is an increased number of families with special needs students that are choosing to have their children educated in independent schools.
In 2011, according to Ministry of Education data, approximately 4.5 percent of the students in public schools were receiving additional funding for special needs. At the same time over 4 percent of the students in independent schools were receiving additional funding for special needs support. Using the same criteria for special needs eligibility, the percentage of funded students for special needs in public and independent schools varied by less than half a percent.
Independent schools enrol families that have children with challenging learning needs. It is not just the public sector that must deal with challenging learning situations in their classrooms.
Most independent schools are group 1 schools that operate at a per-pupil operating cost equal to or less than public schools in the district in which they are located in order to qualify for a 50 percent operating grant. They pay their teachers generally less than their counterparts in the public sector. Tuitions are kept low in order to make independent schools affordable to families. Many schools have benevolent funds to give access to lower-income families that would like to have their children attend independent schools.
What makes independent schools thrive and what makes students in these schools successful in provincial and international assessments and in post-secondary programs is not the economic well-being of families whose children attend these schools but a strong sense of loyalty by parents to the mission and vision of independent schools.
Contrary to what some in the public sector might say about the perceived exclusive enrolment in independent schools, our school professionals are pleased to be able to provide support for students with special needs. But the demand on learning resources for students that require learning intervention is challenging. That is why FISA is advocating for proportional funding from the learning improvement fund.
Students with learning needs in independent schools deserve the same support that is being extended to students in the public sector. Excluding independent schools from the learning improvement fund appears to be based on an inaccurate understanding of the demographics and learning needs in most independent schools in British Columbia. Independent schools provide educational service to a wide range of families representing a full range of the socioeconomic spectrum and a wide range of special needs.
We recognize that the government has significant challenges to overcome at the present time. We support the government in the $165 million of additional funding that has been budgeted for the learning improvement fund. Our request is simply that independent schools be included in this funding allocation.
I would like to remind this committee that last year independent schools educated 11.6 percent of the province's K-to-12 students with only 5 percent of the Ministry of Education's operating budget — roughly $245 million. The average per-pupil operating grant in 2011 and '12 in public schools was $8,491 per FTE. The equivalent average per-pupil grant in independent schools was $3,900 per FTE, plus a funding protection clause.
If these students were to return to the public education sector, the cost in operating funds alone would be increased by nearly a quarter of a billion dollars. Conversely, for every 250 students from the public sector whose parents choose to have their students attend an independent school, the cost savings to the taxpayer is $1 million.
We've looked at preliminary enrolments for this year in independent schools. Of the 220 schools that we have reported on, we are already showing an increase of 1,600 students this year. That's approximately an increase of 3.5 percent from last year. If these students have all come from the public sector, the resulting savings to the taxpayer could be in excess of $6 million.
On behalf of independent schools, FISA is asking for access to the learning improvement fund along with our public school colleagues. Independent schools representatives support the government's initiative of adding learning improvement funds to our schools. This province needs a strong public education system. At the same time, independent school families value the right of parents to choose an education that is appropriate for their children.
I thank the select standing committee for the opportunity to address this issue, and I'm open to questions at this time.
D. Horne (Chair): Thank you for your presentation. We'll begin our questions with Marc.
M. Dalton: Thank you very much, Peter, for your presentation and for the work that you do on behalf of independent schools. I've had the opportunity in the past year or so to visit dozens of the independent schools across the province. I guess some of the constants that I've seen have been the commitment and passion of the teachers to teach to their students; the sacrifice of the parents both financially and as far as time, participation in the schools; and just the positive education outcomes.
Another constant, I would say, is the financial challenges that these independent schools face. For the most part, they're pinching pennies. I know that there are a few schools that are doing fairly well financially, but for most of them, there are real challenges.
Yesterday I had an opportunity after one of our meetings to visit an independent school. You know, the kids walked around, and it's a vibrant school. But the principal was telling me that they didn't have a bell for one year because it cost $2,500, and they couldn't afford it. They had to hand-ring it.
She said she's tired…. It's hard for her because she's always thinking of the dollars. A garbage bin was stolen, and she's thinking: "How much does that cost?" These are some of the pressures that they are facing, so it saddens me when I hear from others that independent schools are just for the rich kids and that they don't deserve funding.
I just want to know what your response is to this.
P. Froese: First of all, this presentation is not asking for an increase in the 50 and 35 percent funding that the government has currently been providing for independent schools. That rate has been set since 1989. It's a challenge for some of our schools to meet their educational costs within that fiscal framework, but we're not asking for additional moneys. We're not asking for additional moneys for capital costs. That's something that we bear on our own as well.
There are realities in public education that are a challenge for especially some of our smaller schools, especially as you go north. The schools struggle in the northern part of British Columbia. Around the Fraser Valley, where many of the schools are large and have full classes, it allows them to run fairly financially prudently. Those schools seem to be doing quite well. It's the smaller schools that are a challenge for us, and those are the ones that struggle with learning needs as well.
At the same time I want to make it very clear that independent schools are very supportive of our colleagues in the public sector as well. I spent 20 years of my career in public education. I valued every minute of it. Just because I've switched to support independent school education does not minimize the work that is being done by our colleagues in public education.
We're just saying that there are needs in independent schools that we think were overlooked in the learning improvement fund, and we're asking government to take another look at that aspect.
B. Ralston: I know in my own riding there are a number of independent schools. There's Our Lady of Good Counsel. There's Iqra Islamic School. There's the Khalsa School. They provide…. I mean, there are a lot of them. They're all growing.
But my question was just in terms of costs. I understand your argument, and I understand you're not asking that the formula be changed, nor is this a request to change the policy on capital funding.
Are your costs, then, in terms of…? You're doing IEPs. Would your costs be approximately the same as the public system? In a sense, you'd be hiring the same kinds of people to assist in preparing these plans. Or do you see any difference in the ultimate cost per student where you require the development of an IEP?
P. Froese: What we're looking at, MLA Ralston, are the schools that are currently using funds from their operating costs, which are supposed to go to regularly enrolled students. They're having to supplement those costs to cover students that are not covered under the special education additional funding that both public and independent schools get.
That is significant within the public sector. It's becoming more significant for independent schools as well. The number of our students that are on IEPs, where we require unique learning resources…. In some cases it's to hire additional staff — correct. In some cases it's to provide some assessment strategies that in our case we have to contract out for. We don't have these people on staff as public school districts have. So those costs cut into the so-called operating funds that we normally use for our regular program.
Are they equivalent to what is happening in the public sector? I think the public sector has a higher need than we do, but our need is great.
D. Horne (Chair): We're reaching the end of our time here. A quick question from Dave.
D. Hayer: We recently announced about $300 million for capital funding for the schools — 19 projects and seven school districts. Independent schools — do you get any money at all from the government as far as your capital projects? Where does the money come from to build independent schools? Those kids who move into the public schools…. Therefore, we'll probably have to build extra schools. I just want to find out where your funding comes from.
P. Froese: We would love you to supply the money, if you so chose. But as a matter of fact, no.
Under legislation with the government, there is no money that goes for land, buildings and equipment. That must be provided through our schools, generally through fundraising that is done by parents who are affiliated with the school community. Sometimes businesses step in and provide resources for us. But it's generally work that we have to do over and above the educational program.
D. Horne (Chair): Not to take us off on a tangent, but one thing just came to me. We had a presenter yesterday talking about distance education and on-line programs and some difficulties with those. I just want to know your thoughts and experiences with on-line and distance education.
P. Froese: How much time are you giving me?
D. Horne (Chair): Less than a minute.
P. Froese: Let me give you a quick answer. Distance education is something that we in the province of British Columbia need to come to terms with for education for our kids. It's a reality, whether it's happening in the public system or it's happening with independent schools. We've seen a growth, with independent schools growing to around 7,000 students. It's huge. In the province I'm told there are approximately 78,000 students taking at least a course or two on distance learning.
The challenge for us in independent schools and possibly for the public sector…. I can't speak for them on this issue. The concern for us is that we maintain the level of education within distance learning at a high quality and that we're using consistent best practices in all of the…. In our case we've got 18 schools that are providing DL education.
Our concern is that we want to ensure that the quality of education, although the program is delivered differently in each of the schools, maintains high. We have to protect the B.C. brand of education. We have one of the best in the world, and we can't let it be taken away because of DL.
D. Horne (Chair): Thank you so much for your time today and for being with us. That brings us to the end of our agenda here in Parksville. I'll look for a motion to adjourn.
The committee adjourned at 6:29 p.m.
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