Hansard — House Blues — Monday,October 5, 2009 p.m.

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.

DEBATES OF THE LEGISLATIVE ASSEMBLY

HOUSE BLUES

MONDAY, OCTOBER 5, 2009

Afternoon Sitting

C. James: I want to take an opportunity to recognize a historic moment in our province's history that occurred last week. That is the election of Nisga'a hereditary Chief Harry Nyce as president of the Union of B.C. Municipalities. As we know, Chief Nyce is UBCM's first, first nations president. He served for many years on the executive, and I know that he'll continue that service for all municipalities. I ask this House to please pass on our congratulations to Chief Nyce and to the UBCM.

Hon. M. de Jong: A legislative officer is visiting us today in the Legislature in anticipation of perhaps a little more history. Kim Carter is the Ombudsman. If this Legislature sees fit, we are hopeful that she will leave this chamber or, at least at her next visit, that she will attend with a different title than Ombudsman. I hope the House will make her feel welcome today.

Hon. M. Stilwell: I would like to take the opportunity to introduce the House to Lisa Tees. Lisa has inspired many of her family and friends to run, walk and fundraise for a cure for breast cancer. This past Sunday, October 4, men and women around the province and across the country ran for the cure for breast cancer. They ran for a cure for the women in their lives.

Last December Lisa Tees was diagnosed with breast cancer at the age of 38 years old. After surgery, six months of chemo and six straight weeks of radiation, Lisa and over 50 of her friends participated in this year's Run for the Cure. Many ran, some walked, but all gave their time and their pocketbooks in the hopes of a cure.

Lisa's team, the Ta Ta’s for Tees, won in the friends and family category, as they raised over $12,500 for the Run for the Cure. I know Lisa's message would be to all women of all ages to do self-examinations, see your doctor regularly and get a regular mammogram. In other words, Lisa's message is: save second base. Thank you, Lisa.

V. Huntington: It's my pleasure to introduce to the House a family visiting the Legislature from my riding of Delta South. Billy and Stephanie Mitchell and their sons Ben, aged ten, and Sam, aged seven, are here on one of the cruise ships. They are spending a day visiting Victoria before they head south to San Diego.

It's a special honour to have Ben and Sam here as they are each highly acclaimed B.C. athletes. In fact, they each came in second place in their age divisions in the western national BMX championships. Ben in particular is hoping to be a representative of Canada in the 2020 Olympics. Please make them welcome.

Hon. I. Chong: I have two introductions I'd like to make this afternoon. The first is to say welcome to Lisa Tees, because I was part of a team on Sunday that joined with the other 49 who walked on her behalf. Accompanying her today is one of the tremendous organizers who helped fundraise that incredible sum on Lisa's behalf, and that is my administrative coordinator, Lisa Johnson. I hope the House would make her very welcome.

The other group of individuals I'd like to welcome to this House I don't see in the gallery. Perhaps they're on their way here; I know they're in the precincts somewhere. It is a group of grade 12 students from Spectrum Community School, their entrepreneurship class. They're accompanied by their teacher, Mr. Chuck Groot. The students are participating in the Junior Achievement Titan program. I hope the House would please make them very welcome.

Hon. C. Hansen: There are 30 grade 11 students in the Legislature today from the Prince of Wales Mini School in my riding. They're accompanied by their teacher, Mr. Andrew Humphries. I hope everyone will make them very welcome.

J. Thornthwaite: I would like to welcome Joe Heilman from Heilman Renovations. He's from North Vancouver, a fellow chamber of commerce member. He was here for an AGM last night. I hope the House will make him feel welcome.

J. Slater: I would like to introduce Heather and Dave Remillard from the Boundary area. They live in the village of Midway. I would like the House to make them very welcome.

J. McIntyre: I would like the House to welcome the mayor of Squamish, who is with us here today, Greg Gardner. He's a successful GM dealer and a prominent community leader. He ran for council in a by-election and was elected mayor last November '08. He was in the precincts here today for meetings accompanied by the new chief administrative officer in Squamish, Kevin Ramsay. Would the House please make him feel very welcome.

J. McIntyre: It is with sadness that I rise to inform the House of the passing of Dr. LaVerne Kindree a week ago Saturday at the age of 88. Dr. Kindree, a true pioneer, was the Squamish region's sole physician for many years and one of its most beloved residents.

Dr. Kindree leaves behind an impressive legacy of public service, and for this he was recently appointed to the Order of Canada for his 50 years of dedication to the health and well-being of Squamish. I've had the privilege of working with him on some seniors and medical expansion projects, and he was truly an amazing gentleman and a community leader par excellence. He's survived by his wife Norma, five children, four foster children and many grandchildren, and he will be greatly missed by all.

Hon. M. de Jong presented a message from His Honour the Administrator: a bill intituled Ombudsman Amendment Act, 2009.

Hon. M. de Jong: The position of Ombudsman has existed in British Columbia for 30 years. Earlier in this session we recognized the 30th anniversary of the establishment of that legislative office. I am told that the term "ombudsman" derives from a Swedish term and that in that language it is gender-neutral. That is not the case with respect to the English translation — ombudsman.

With the passage of this bill, that would change, on the request of the present officeholder, who has drawn this to the government's attention. We are pleased to present to this House a bill that would have the effect of changing the title of "Ombudsman" to "Ombudsperson" and changing that term wherever it appears in legislation within the Revised Statutes of British Columbia.

I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 12, Ombudsman Amendment Act, 2009, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

D. Hayer: It is with pride that I rise, as I do every year, to pay tribute to the brave men and women who serve and protect us in our communities. Particularly today, I want to recognize those police officers and staff support workers in Surrey who were nominees and recipients of the Surrey Police Officer of the Year Awards last week. The awards ceremony is sponsored by the Surrey Board of Trade and has a long history of recognition, dating back to the time when I was president of the Surrey Chamber of Commerce.

While these awards recognize the performance of leading officers and community partners, the entire detachment deserves praise for fighting crime on our streets, particularly in the area of combatting Surrey's marijuana grow ops.

Now, I would like to recognize those recipients of the 2009 Surrey Police Officer of the Year awards. For the Arnold Silzer Award, finalists were Surrey robbery unit — Gidon — and Surrey RCMP drug section, marijuana enforcement and offence-related property teams, while the district 1 footbeat team was the winner.

Police and Business Partnership Award finalists were Barb Cerney and the Downtown Business Improvement Association, while Whalley Enhancement Association was the winner.

Municipal Employee of the Year finalists were Hardeep Gosal and Annie-Mae Perrin, while Carrie Chattell was the winner.

Volunteer of the Year finalists were Doreen Johnson and Olga Duncan, while Betty Gilbert was the winner.

Police Officer of the Year, nominated by peers. Finalists were Mike Spencer and Crystal Heisler. The winner was Drew Grainger.

Police Officer of the Year, nominated by the community. Finalists were Johanna Robinson and Murray McAulay. The winner was Darren Malcolm.

I ask all the members of the House to join me in congratulating all the nominees, finalists, winners and sponsors for their outstanding contribution to the public safety in Surrey.

C. Trevena: Most of our communities have a place of last resort — a place where the most vulnerable know they'll be helped without judgment. That, I believe, is one of the hallmarks of a civil society. Whether it be a food bank, a Salvation Army shelter or a soup kitchen, it's a place of brief respite.

Campbell River is extraordinarily lucky to have a place which is even more than that. It's a place where people who've given up all hope of finding justice or maintaining some human dignity can turn for help.

It's the Island JADE Society, a place where people won't be turned away, where their problems are understood and the labyrinths they face deconstructed. Island JADE evolved from the North Island Advocacy. Its founder, Sian Thompson, wanted to move beyond the concept and practice of advocacy. JADE is an acronym for "justice, advocacy, dignity, empowerment." The people who walk through its doors looking for help are helped in all of those fields — the search for social justice, the advocacy in dealing with bureaucracy, the dignity in being respected as an individual human being and the empowerment that they can take charge of their own lives.

It's not a place where miracles happen, but it's a place where hundreds of people are helped, whether assisting through complex rules in accessing welfare or — a sad commentary on today's realities — being provided with a tent because there is no other shelter available.

Island JADE is a small operation — two advocates and a homeless outreach worker — covering Campbell River and down into the Comox Valley. Its work is known in our communities, especially among those people who are directed there by others knowing that there is really nothing else around to help them.

Early this year Sian Thomson was nominated for and received a B.C. Community Achievement Award presented by the Premier. There's no question she deserved it and that her organization also deserved it. Our society will likely always need a place of last resort. Let's hope that for everyone, that place is one of justice, advocacy, dignity and empowerment.

N. Letnick: All around this province small business people are working long hours and risking their life savings to follow their dreams. Through the thousands of individual actions taken by small business people, our province's economy has grown to one of the strongest in the country.

In recognition of this key economic sector, British Columbia has officially proclaimed October as Small Business Month. B.C. first recognized Small Business Week in 1979, and three years ago it grew to a month-long celebration to help people learn how to take advantage of the opportunities and services available to small business people.

Small business is critical to creating jobs and strong communities. With approximately 384,000 small businesses operating in British Columbia, representing 98 percent of all business in this province, the small business sector employs over one million people and accounts for nearly 56 percent of all private sector jobs in B.C.

In 2008 small business accounted for one-third of British Columbia's GDP — the highest of all provinces in the country. The number of self-employed people in British Columbia rose nearly 14 percent between 2003 and 2008, well above the national average of 9.5 percent. Small business workers have seen annual earnings increase by 24 percent over the last five years, and that's more than twice the increase for large business workers.

In 2005 the province created a permanent Small Business Roundtable to give small business a voice in government. I would like to welcome the two newest members today: Cybele Negris and Sonia Virk, who joined Kelowna's own Robert Fine and 19 other British Columbians on the Roundtable, as we work together to keep British Columbia the most small business–friendly jurisdiction in Canada by cutting red tape and making it easier and less expensive to do business, creating jobs and increasing prosperity for all British Columbians.

S. Hammell: Hon. Speaker, if you stepped back in time to the first quarter of the last century, you would be shocked, I'm sure, and appalled to realize that women at that time were not legally deemed as persons. I'm sure many of the fathers, brothers, husbands and sons of the women of the time were also shocked and appalled, but not the all-male Supreme Court of Canada that weighed the arguments in 1928 and concluded that women were not qualified persons within the meaning of the British North America Act.

The five women who brought the original petition to the Supreme Court appealed the case to London, and on October 18, 1929, the British Privy Council ruled that women were qualified persons. The Persons Case was a vindication of a 60-year-old battle begun in 1867, during which women in Canada and Britain had sought in vain for a determination by the courts that they were entitled to hold public office and to enter universities and the professions. The judgment of the Privy Council was one of the most important milestones in the history of the women's struggle for full citizenship and emancipation.

This month, Women's History Month, encourages us to ask: how are we doing? Clearly there are few barriers for women now entering universities and participating in the professions. That is a great success, but the gains made by women in public life are appalling.

At the national level women sit at 22 percent of the elected members, way below many developed and developing nations. In British Columbia we see the same results. In 1991, 20 percent of the seats were women; in 1996, 26; in 2001, 22; in 2005, 21; and in 2009, 28 percent, largely due to the 34 percent of women that sit in the NDP caucus.

S. Cadieux: This past week on October 1 we celebrated the International Day of Older Persons. Designated by the General Assembly of the United Nations and first observed throughout the world in 1991, this year's theme, celebrating the tenth anniversary of the International Year of Older Persons, was towards a society for all ages.

Seniors are a vital part of the constituency of Surrey-Panorama, and I'm pleased this day recognizes their essential contributions to B.C. communities and draws attention to the greying of our world's population.

I recently had the pleasure of speaking to the White Rock and South Surrey Probus Club, a group of seniors who are still very active in our community. It's important to recognize that this age of aging and our seniors' need to give back to local neighbourhoods is about staying active in body and mind.

Today worldwide there are around 600 million people over age 60. This total will double by 2025 and reach approximately two billion by 2050. By 2031 almost a quarter of British Columbia's population will be over 65.

A recent article in one of our local papers told the story of Kara Warnock, a Fraser Heights Secondary student who spent the summer with her grandmother. Her experience demonstrated to her and to British Columbians how vital the contributions of our seniors are to the future generations of B.C.

My grandmother, Patricia Homewood, just turned 93 a few weeks ago. She's meant very much to me and has certainly helped shape the person I am today. Please help me and take this opportunity to recognize B.C. seniors and join in celebrating the contributions of our seniors for International Day of Older Persons.

M. Mungall: In the spirit of Women's History Month, I'd like to share with the House the organization West Coast Legal Education and Action Fund, also known as West Coast LEAF. The organization was formed in 1985 when the equality guarantees of the Canadian Charter of Rights and Freedoms came into force.

As an affiliate of the national LEAF, their mission is to achieve equality through B.C.-based equality rights litigation, law reform and public legal education and to change historic patterns of systemic discrimination against women.

LEAF's non-profit charitable work involves many, many programs such as litigation, as mentioned, advocating legal aid reforms and supporting women's access to justice. But one program has had a very positive, very direct impact on Nelson, and that is the No Means No program.

This program empowers youth while educating them about sexual consent and human rights. By complementing existing curricula in the classroom, No Means No is working with grade 8 students at Trafalgar School. For a community the size of Nelson, that means every grade 8 student. It works with those students to delve into the myths of sexuality and stereotypes that, of course, can lead to violence. The result is that students understand their rights and respect that no means no.

To bring this empowering program to your community, contact West Coast LEAF. For a nominal fee — and of course that nominal fee is negotiable, considering the economic times — a trained youth facilitator will be able to deliver this valuable program that prevents violence in our communities.

Hon. B. Lekstrom: It's my pleasure to introduce a friend of this House and a colleague who I'm sure needs no introduction. Joining us in the gallery is Olga Ilich. Will the House please make her welcome.

C. James: Last week we learned about cuts to Special Olympics programs in the Sunshine Coast. Today we've learned that those cuts are across the province. Communities across B.C. are impacted. Communities like the Comox Valley, Surrey and 100 Mile House will all lose programs and services that B.C. Special Olympics rely on.

My question is to the Minister of Healthy Living and Sport. How does her government justify wasting taxpayer dollars on video games, pool tables and three ministers to take care of sports, while it's gutting funds for Special Olympics athletes?

Hon. R. Coleman: As the member knows, we've had to make some difficult decisions with regards to gaming grants this year and had to make choices with regards to who we could help first. When we made that decision, we made that decision with regards to children in schools so they could have healthy outcomes in school.

We made the decision with regards to public safety, so that search and rescue teams would be there, particularly coming into this winter, during avalanche season — be out there to save people's lives and be there for their assistance.

Sometimes when you do that, you have to rationalize some of your other grants. Disabled sports did get some money this year, and some others have been spread across. The reason we did that is so we could actually optimize the services to communities like Mackenzie and those that may have a food bank that need assistance this year so that we can actually, frankly, concentrate on what's important.

C. James: Mr. Speaker, I'll tell you the kind of choice this government made. This government chose to give three ministers a job instead of providing funding for disabled athletes in British Columbia. That's where the money should go.

A letter from the ministry to the Special Olympics society revealed a massive cut in funds for Special Olympics — 68 percent on the Sunshine Coast alone. Critical funding for critical services.

So my question is to the Premier. How does a 68 percent cut for Special Olympics athletes match up to this government's priority to protect funding for developmentally disabled adults and children?

Hon. R. Coleman: Like I said, we made choices. We also made a choice with regard to the developmentally disabled this year. We increased the funding to Community Living B.C. so every wait-listed person in the province of British Columbia with a developmentally disabled child will have funding for their children this year.

We increased the funding so we could deal with IQ 70, so that we could make sure the new definition could be funded for children in the province of British Columbia so they can have services in their communities where they need it.

I know it's difficult for some sports organizations right now, because we've had to rationalize some money to put priorities in different places in government. I empathize with that. I also empathize with the fact that those organizations did get some money this year. We'll try and work with them in the future to improve their outcomes. But frankly, we had to make a choice on behalf of children, developmentally disabled children in B.C. — services in the community — and we made those on behalf of the children of British Columbia.

C. James: I'd remind the minister that these are cuts to developmentally disabled children and adults. These are cuts to critical programs and services that provide support for those athletes.

Let's take a moment to look at this government's choices. Hundreds of thousands of dollars for a no-work zone. Half a million dollars for three sports ministers' offices. That's this government's choice — and deep cuts to Special Olympics. In the Comox Valley, 83 percent cut; 100 Mile House, 80 percent cut; Surrey, 70 percent; Sunshine Coast, a 68 percent cut.

Again, my question is to the Premier. How can this government, in the year we're hosting the Olympics, justify cuts to Special Olympics?

Hon. R. Coleman: Tens of millions of dollars to take care of developmentally disabled children and adults waiting on wait-lists in the province of British Columbia so they can have their services. Tens of millions of dollars in services for those people that the member is actually talking about, in their communities with their parents for the services those kids need, and every single dime was opposed by the Leader of the Opposition and the members opposite for those disabled children.

Hon. R. Coleman: We made choices for children, for the services for children, for meals for children in school, and those were the right decisions. At the same time, we were able to manage to send some money to disabled sports in British Columbia.

N. Simons: Across the province there are coaches, there are parents, there are brothers and sisters of kids and adults with disabilities — developmental disabilities, in particular — who are extremely worried about these cuts. To many, Special Olympics is what people with developmental disabilities look forward to. It gives them a meaning in life, and it gives them joy. It also brings communities together.

This priority has obviously fallen fairly low on this government's agenda. How can you explain to athletes across this province, Special Olympians, that this choice was based simply on bad planning and that the effect will be extremely negative to their families? You know what I mean.

Hon. R. Coleman: I will try and respond to the question from the member for Powell River–Sunshine Coast.

We managed to send some money to the disabilities sports in your community, as we did across B.C., as we tried to manage the dollars. The provincial organization actually received a $60,000 bingo affiliation grant, which was $5,000 more than it received last year.

As we did that, we also had to do it in the management of what the other priorities of any grant program in British Columbia should be, and that is what they identify, what their priorities are and who needs it the most at any given time. In these difficult times it's human and social services. It's public safety. If somebody is lost in the back country this winter, I want those organizations to be funded.

Hon. R. Coleman: It's also to Community Living B.C., who needed money to deal with wait-lists and other services for developmentally disabled adults and children across British Columbia. I think those were the right decisions to make.

This is the minister who has consciously put $77 million of previously ministerial funding into gaming. He has taken away from charities — $77 million less for charities in this province. That's a cut.

Stephanie Rogers is an athlete, a three-time medallist and a swimmer. Her dad, Gary Rogers, is her coach. This is her life. This is what she does.

Athletes, Special Olympians across this province, are going to be hurt while this government is spending tons of money on Olympic boxes, luxury parties and the rest of it.

So how can this government justify those two things? Why did government make a conscious decision to fund Olympic parties and luxury boxes instead of dealing with those Special Olympians across this province who wanted to be able to participate?

Hon. R. Coleman: It's interesting to have somebody that even lives close to Nanaimo lecturing this government on issues in and around charities in the province of British Columbia. But you know….

Hon. R. Coleman: Let's talk about a charitable purpose. Somebody is lost in the back country in the middle of winter, and there's a search and rescue team that can go there because somebody has covered their liability and given them the machinery and the training so they can go out and save a life. That's a pretty good charitable purpose.

A child arrives at school and gets a meal. You're opposed to a child arriving at school…? That's not a charitable purpose? You don't think feeding a child so it has a better educational outcome is a charitable purpose? I happen to think it is. We'll make that choice on behalf of children every single time.

K. Corrigan: This past July at the summer Special Olympics in Abbotsford, here's how the Premier described the participating athletes: "It's about doing your best, trying your hardest and sharing with others what you can do." Less than two months later this government turned around and made massive cuts to the same programs that allow these athletes to train and compete in sports.

To the Minister of Healthy Living and Sport: is it acceptable to make promises to B.C.'s Special Olympics athletes and then make cuts to the very services they rely on?

Hon. R. Coleman: As I explained to the member opposite a few minutes ago, we have to make tough decisions. We did provide what we thought we could to disabled sports this year. Disabled sports actually got a number of millions of dollars. In actual fact, they did that at the expense…. There's no money for adult sports. There's no number for additional environmental groups. A number of other programs were cut in order to have money to spread around youth and disabled sports.

Hon. R. Coleman: I hear one of the members from Vancouver chirping away. He's the one that'll stand up in a couple of minutes and say: "I want more money for arts." So maybe you could give up the money you want for arts and send it over to disabled….

Hon. R. Coleman: I can tell the members opposite that I know the volunteers and the coaches and the people who deal with disabled sports in British Columbia and their commitment. That's why we made the effort to make sure there would be some money available for disabled sports this year.

K. Corrigan: We do know about this government's choices — choices to fund luxury boxes and choices to throw half-million-dollar parties. It's not just the families and athletes in Surrey, the Comox Valley, 100 Mile House and the Sunshine Coast that are questioning this government's priorities. People across B.C. want this minister, this Premier and this government to give their heads a shake about their misplaced priorities.

Even VANOC CEO John Furlong has publicly called for sports programs to be treated as a priority. These are his words: "I hope that as a result of what we do in February, sport will end up in a place on the national agenda, as much a priority as any other thing we care about."

Again to the Minister of Healthy Living and Sport: how does she justify these shortsighted cuts for Special Olympics athletes during a time when B.C. is preparing to welcome the world for the 2010 Olympics?

Hon. R. Coleman: We make choices, and we set priorities. First of all, developmentally disabled children in the community around us and the people that represent them, like Rory Summers from the B.C. Association for Community Living, say this: "It is not often I give kudos to the government. At this particular time I think we need to. They've shown true leadership by listening to the community and responding to our needs."

Their needs were to deal with wait-lists for services for children and adults that were developmentally disabled. In British Columbia we spent tens of millions of dollars meeting that commitment.

The priorities are clear. We'll help those in need the most. We'll buy the 23 SROs in Vancouver, the 45 across the province. We'll take 7,000 people off the street and connect them to homes in British Columbia with our outreach workers. We'll do it because we're going to put the people of British Columbia that need it the most first in our decisions.

M. Karagianis: Families with special needs children rely on the infant development program. For example, Dorothy Gazzola, parent of Faith who has Down syndrome, said that the program is a godsend and that it has played an integral part in how well her daughter Faith is developing as a special needs child.

My question is to the Minister of Children and Families. Why is she cutting a program that has a proven track record of helping special needs children?

Hon. M. Polak: Well, as it turns out, the member is incorrect. There will be no cuts to the infant development program and no cuts to the supported child development program. In fact, both budgets remain at an all-time high of $18 million for infant development and $57 million for supported child development.

Right here I have a notice from the B.C. Association for Community Living: "Elimination of Provincial Infant and Child Development Offices a Shocking Blow to Child Development in British Columbia."

This goes on to say from Janice Barr, chair of the supported child development provincial steering committee and executive director of the association for Community Living: "The government is not making an administrative cut. They are severing a key link for support…a direct impact on the lives of children and youth with special needs."

Again, why is the minister cutting a vital program and eliminating a program that helps children with special needs?

Hon. M. Polak: Again, there will be absolutely no change to the services that are received through the infant development program and the supported child development program.

While the two provincial adviser positions have been valuable over the course of development of both of these programs around the province, these are not positions that provide direct services to families and children. The fact remains that these are administrative positions that we can fulfil the duties of within the ministry, and that allows us to direct increased funding to front-line direct services to kids.

G. Coons: If the minister had done her homework and talked to the stakeholders, the front-line workers and the families, she would have found out how valuable this program is.

The minister is on record saying that there isn't a need for these advisers. The loss of the infant development program will be even harder on first nations families and families living in the north.

Melinda Heidsma, Prince George Association for Community Living, which delivers the IDP services in the north, says: "The provincial IDP office is a lifeline not only for families but also for the IDP consultants all over the province."

Compared to the parents living in urban areas, those parents in rural and northern B.C. have access to even fewer supports and services for their special needs children. Why is the minister reducing the level of help that special needs families from first nations families and from the north receive?

Hon. M. Polak: Let me say to the members opposite once again that there will be no loss of service. There will be no interruption of service for families receiving the infant development program or supported child development program. In fact, what is most disturbing to me…

Hon. M. Polak: …is the way in which the opposition members have preyed upon the fears of those who receive these services by telling them that a program is ending when it is not changing one iota.

G. Coons: Experts in the field rebuke this minister's spin and rhetoric. The B.C. Association for Community Living says that it's not an administrative cut, that the IDP and its staff have a direct impact on the lives of children and youth with special needs.

Now, not only is the B.C. Association for Community Living describing this cut as devastating, five front-line consultants from the Prince Rupert area who work extensively with infant and child development, especially with first nations children, say that this cut will seriously impact families, especially in the north. They point to how families in the north rely even more on the services that the IDP program provides and how it is essential for these families.

Will the minister revisit her decision and restore funding to this vital program?

Hon. M. Polak: The provincial advisers play an intermediary role between the ministry and service providers. They do not provide direct service to children. The infant development program retains its full budget of $18 million. The supported child development program retains its budget of $57 million.

Hon. M. Polak: I find it difficult to believe that the opposition would defend the idea of maintaining two administrative positions costing us $600,000 a year that could go into direct front-line services for kids.

J. Kwan: I have a letter here, actually, from the provincial adviser, infant development program of B.C. Here's what Dana had to say.

"It is very important that MCFD and the government understand that the provincial IDP office and aboriginal supported child development provincial offices are not bureaucracies, nor are they administrative structures. They have very little, if any, administrative functions."

"The provincial IDP office provides direct services to families who call for information, to professionals who need to know where to refer a newly diagnosed baby or to access up-to-date evidence based on early childhood intervention information."

My question to the minister is this. Does this sound like administrativia to you, when you're a parent on the other side needing help for your newborn child and support of services?

Hon. M. Polak: Well, let me make it clear to the opposition member. The coordinator positions that provide referrals and the types of services to which she just referred — those are continuing. We are talking about the provincial adviser positions. They perform an intermediary role between the ministry and the service providers.

I just can't understand why the opposition would want to maintain government positions at the expense of services to kids. What is it you don't like about providing front-line services to kids?

R. Austin: A letter from the Prince George school district clearly states that contrary to what the Education Minister told this House, they were given absolutely no warning about the cancellation of facilities grants. Now the district has a $2.3 million deficit in their special purpose fund and has cancelled or suspended all school maintenance.

I'll quote from a letter between Prince George school district and the minister. "Contrary to statements made by you and representatives of your ministry, there was no forewarning that the annual facility grant, a grant that is ingrained in district operations, would be held back or, in the case of the current fiscal period, completely eliminated."

Hon. M. MacDiarmid: The Ministry of Education and our government this year have provided yet again record amounts of funding for schools — records amounts of funding.

Hon. M. MacDiarmid: In spite of the fact there are 7,000 fewer students expected this year, we are providing an extra $84 million to go to classrooms in this province.

Our government has made choices this year. Absolutely, we've made choices about how we'll do things, and our focus is on the student in the classroom.

With respect to the annual facilities grant, back in June of this year school districts — secretary-treasurers — were advised that they should go slow on their projects, that they should use reserve funding, that this was a different year. That advice did go out in June of this year.

R. Austin: A new minister but the same old message box. Let me quote again from this letter. "The complete absence of communication or communication that is vague and disingenuous implies either that your ministry does not want or know how to communicate or worse — that there is an underlying agenda to set boards up to fail in their basic mission."

The minister told this House that school boards were warned about the cancellation of facilities grants. The Prince George school district says that's not the case. How can school boards do their jobs when faced with a government that can't even get its story straight about major last-minute cuts to cash-strapped districts?

Hon. M. MacDiarmid: This is a government that this year alone is investing $447 million in new schools, in upgrades, in seismic projects. We continue to make these investments because we know how important it is.

With respect to the annual facilities grants this year, the communication did go out, and we're continuing to work hard with all of the school districts. We've made it very clear. If there are issues of health and safety for students…. In fact, we've already found ways to work with districts to provide funding through their reserves so that they can address the needs of students.

This is ongoing work. We are meeting individually and discussing with each school district as necessary. Many of the school districts were able to slow down their projects, and they're having absolutely no difficulty.

We'll continue to work with all of them, to work with Surrey, and we will continue to invest in schools in this province.

L. Krog: Public trust in the justice system is at an all-time low. After the election, five months into the fiscal year, this government and this minister cut by $310,000 the budget of the Justice Education Society. They're closing offices. They're laying off staff. They're making cuts every which way they can.

To the Minister of Education: why did she suddenly and retroactively cut the program that helps people access education and understand the law processes — essentially taking away British Columbians' rights to justice?

Hon. M. MacDiarmid: This year, as I've mentioned, we are providing record funding, but we've made a conscious decision this year.

Hon. M. MacDiarmid: In spite of what the members opposite might wish us to think, this year there is a record amount of funding going to the classroom. And when it….

Hon. M. MacDiarmid: When it came to our grants, without doubt, we did make decisions that were different this year, and our priorities were clear. We made sure that we were protecting our most vulnerable students, that we were investing, again, record amounts in early learning and literacy and that we were investing in our aboriginal students. These were good decisions in difficult economic times, and they are the choices that we made.

L. Krog: That's some record. It's a 40 percent cut. No matter how you dance around the issue, it's a 40 percent cut to that organization. It affects those who can least afford it — 15,000 ordinary students, 600 youth at risk and 1,000 aboriginal students in remote communities. Those services are being terminated.

This comes on top of the cuts the government has made to legal aid — cuts that already put an enormous strain on our justice system. I want to hear from this minister: what research does she have to show that this won't end up just costing the justice system a great deal more in the long run?

Hon. M. MacDiarmid: Challenging economic times call for leadership, and they call for decisions to be made. Our government has made a decision.

Hon. M. MacDiarmid: We are investing record amounts in classroom education this year. It is the decision our government made, and it's a decision that we all stand by.

We know very clearly what the opposition would have done. They are not governing. We know very clearly what would have happened. We know that right now British Columbians would be experiencing a much higher deficit and higher taxes. These are not choices that we would make.

Hon. M. MacDiarmid: Record investments — record investments in classrooms. record investments in students, record investments in early learning and literacy. These are the choices that we've made in these difficult times. Again, we stand by them.

J. McIntyre: I notice that we have members in the gallery from the Canadian Chamber of Commerce. I understand they're meeting. They're having their AGM in Victoria. I hope the House will make them welcome.

N. Simons: I'll try and say this eloquently. Will the House please welcome a city councillor from Powell River, Chris McNaughton, who is in the House visiting today. Welcome to the House.

Hon. M. de Jong: Following discussions with the Opposition House Leader and with leave, I would move a sessional order amendment dealing with the hours of operation for the chamber between now and the conclusion of proceedings.

The Opposition House Leader has the formal motion for the information of members. It would make the following adjustment on a sessional basis only, and that is that on Wednesday the House would sit in the afternoon from 1:30 p.m. to 7 p.m. and on Thursday from 10 a.m. till 12 noon and from 1:30 p.m. to 6 p.m.

[That effective immediately, the Standing Orders of the Legislative Assembly of British Columbia be amended as follows for the duration of the First Session of the Thirty-ninth Parliament, which commenced on August 25, 2009:

2. (1) The time for the ordinary meeting of the House shall, unless otherwise ordered, be as follows:

3. If at the hour of 6:30 p.m. on any Monday and Tuesday, 7:00 p.m. on Wednesday, and 6:00 p.m. on Thursday, the business of the day is not concluded and no other hour has been agreed on for the next sitting, the Speaker shall leave the Chair:

APPOINTMENT OF SPECIAL COMMITTEE TO
REVIEW THE FREEDOM OF INFORMATION
AND PROTECTION OF PRIVACY ACT

Hon. M. de Jong: Again with leave, I move the following motion that I have provided to the Opposition House Leader, and that is that the special committee be appointed to review the Freedom of Information and Protection of Privacy Act. That takes place statutorily, pursuant to section 80 of that act.

[That a Special Committee be appointed to review the Freedom of Information and Protection of Privacy Act (RSBC 1996 c. 165) pursuant to section 80 of that Act, and that the Special Committee so appointed shall have the powers of a Select Standing Committee and is also empowered:

(a) to appoint of their number, one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;

(b) to sit during a period in which the House is adjourned, during the recess after prorogation until the next following Session and during any sitting of the House;

(d) to conduct public consultations by any means the Committee considers appropriate, including but not limited to public meetings and electronic means;

and shall report to the House by May 31, 2010; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.

That the said Special Committee is to be composed of Mr. Cantelon (Convener), Messrs. Foster, Horne, Dalton, Sultan, and Bloy and Mme. Cadieux and Messrs. D. Routley, Lali, Gentner and Mmes. Conroy and Kwan.]

The usual powers are granted to the committee. By virtue of this motion, the committee is charged with reporting back to this House by May 31, 2010. With leave, I move that motion.

Hon. M. de Jong: With apologies, I should read into the record, pursuant to the terms of the motion, the following membership. Mr. Cantelon is convener, and it includes members Messrs. Foster, Horne, Dalton, Sultan, Bloy, Mme. Cadieux, Messrs. Routley, Lali, Gentner, and Mmes. Conroy and Kwan.

Hon. M. de Jong: I'm reminded, pursuant to my last comment, that that is D. Routley, for the record.

Hon. M. de Jong: For this afternoon, I call continued second reading debate of Bill 8, the Strata Property Amendment Act, in this chamber, and in Committee A, Committee of Supply — for the information of members, the ongoing debate on the estimates for the Ministry of Forests.

S. Fraser: In discussions on Bill 8, I'd like to comment on a few things that affect my constituency and certainly the association on Vancouver Island of strata owners and, I would suggest, all strata owners across the province.

We have a bill here that is being brought forward, which I do not believe properly addresses the issues. While it makes some attempts to do so in some circumstances, it is woefully lacking in many others.

It's unfortunate. The strata owners across the province have waited a long time for this bill. It's certainly well overdue, and the disappointment is palpable amongst the associations and owners throughout the province because there is so much missing from Bill 8.

I would like to make a few specific comments about that. A major issue neglected by Bill 8 is the large number of votes controlled by the owner-developer, if you will. That's for unsold strata units. With this lacking, developers can sort of tame strata councils, if you will, in order to evade responsibilities under the act. There's a key flaw there.

Bill 8 still does not require the disclosure of strata council minutes to a purchaser. So here we have Bill 8 coming forward now, and really, without this key information in strata council minutes, if that's not made available….. In many cases this written information would be the only indication, for instance, of a leaky-condo issue or a problem within the strata. To omit that piece of information in the bill is a massive flaw, and we don't need to poll too many British Columbians to understand that.

Although Bill 8 appears to provide for more transparency and tracking and reporting the condition of strata corporate assets, it could also be undermined if the regulations provide too many loopholes — and they do, Madam Speaker. Welcome to the chair.

Bill 8 appears to provide more transparency in tracking and reporting the condition of strata corporation assets. Again, that's undermined if the regulations provide too many loopholes, which they do.

In essence, the bill should not be premature, but it is in this case. It is not ready to bring forward after all this time and after all the waiting — patiently — by strata owners and strata associations. I know that the Vancouver Island Strata Owners Association have worked hard to try to provide meaningful input to this process. I do not see their input being respected in this act, in Bill 8.

I would note that we need a proper, open and public review of the needs and the issues dealt with in this act. I would suggest that constructive feedback from strata owners has fallen on deaf ears with this government and with the ministry. I would ask that this bill be drafted in a way that protects the public interest, that protects people — strata owners — like those who live in Little Qualicum River Estates in my constituency and many more that have come to me with concerns about the great flaws and shortcomings of the previous, existing act and now are not seeing those issues addressed appropriately.

D. Thorne: It was a little like déjà vu speaking to this act again, but I couldn't let the occasion pass without saying a few words about how disappointed I am in the fact that this bill has come back in basically the same form that it was in, in March when I last spoke to it. I can't see any substantive changes of any kind other than that it's no longer under the Minister of Finance. It's now under the Minister of Social Development.

I know that when we discussed this in March, it came to the House the day before…. Well, actually it was the day, if I'm not mistaken, that the government basically announced that we would be leaving this chamber and going out into the world of elections the following day.

When we were discussing this at the time, we were all aware that the bill was going to die on the order paper and that it wasn't going to pass. At that time, if memory serves, the minister, who would have been at that time the Minister of Finance, made some comments. I actually have a copy of some of the comments that the minister made.

One of the most important, according to the people on this side of the House and also some of the stakeholders — who up to that time had not been consulted in any meaningful way around this proposed bill — was that the minister had said that they would go out and invite further feedback from organizations rather than pushing the bill through in any kind of rushed manner — that now, with the summer, there would be time to have some consultation with other than developers and strata owners and things like that.

I couldn't let this pass today on second reading without getting up and stating in a generalized way that it's very, very disappointing that this consultation does not appear to have happened. The government was severely criticized last spring for having private and confidential consultation processes with developers, property managers, their lawyers and others, and also informed the strata associations that if they wanted to meet with the government and state their views and be part of the consultation, that would have to be done in silence — that there would be a confidentiality agreement, which most of the strata owners chose not to do.

They were expecting, when they knew this bill was going to die on the order paper, that even though the ministers have changed, the consultation would in fact take place. That was possibly even longer than six months ago. That hasn't happened. You know, there's a lot of disappointment around that.

I also wanted to just say a little bit about some of the issues that we talked about being wrong with the bill — or not necessarily being wrong with the bill. Most people support this bill even though it's very, very limited, doesn't go nearly far enough and has not had the proper consultation. I'm not aware of any of the stakeholders, including most strata councils, that would say they're opposed to the changes that are recommended in this bill. Of course any step — even a small one, if it's a step in the right direction — is to be welcomed by all of us.

However, the more or less closed-door process that was used by this government has kind of given the ordinary person living in a strata the feeling that they're not really important to the process and that they really did have very little to contribute to the legislation, even though it's affecting them and their property and for most people, I would think, probably their big financial investment. As we've discussed in this chamber many, many times, a home is often the biggest financial outlay that most of us will ever make.

I know that many, many — and in my own family as well — people that live in stratas or own strata units feel that the bill, even though it's a small step in the right direction, is a bit undemocratic. I say that — in fact, in my opinion and many others — that taints the bill, which is too bad, because when you have a positive bill, even a small one — you know, a small step in the right direction — it's nice for all of us to be happy about it and not feel that it's tainted in any way.

Some of the other aspects that are not considered in this bill are licensing standards for strata managers, for example. I was the past critic for Housing for the two years prior to this sitting. I heard from many, many owners of stratas that this is a significant issue and that the standards for licensing for strata managers need to be looked at and need to be cleared up, changed, clarified — whatever word you want to use — and could have been looked at over the summer.

I don't know of any reason…. Of course, I could be wrong. This may not be true. There may have been a reason that this bill had to come back in essentially the small form that it was in, in March — that we couldn't have added to it and made it a more significant bill. I mean, that would have meant leaving it and not putting it forward until November or possibly even the spring. Maybe that's the reason.

Maybe the government's thinking is: "Let's get this through now. It's a step in the right direction. Then we'll make a very big effort to actually go out and do some real consultation with strata owners, and we'll bring forward another bill after Christmas, adding to this bill, that moves us way forward, and we'll deal with all of the issues that keep coming up again and again."

Those issues are not going to go away. Those issues are going to remain. More and more people are moving into stratas. That is not going to change, and I think we all know that.

Again, this bill does nothing to improve the accountability of strata developers, for sure. We all know there have been many, many issues around that. The offence and penalty provisions that are needed are not dealt with in this bill, not in the way that they need to be dealt with.

These three issues are very, very important and are part of, I submit, the court system — the fact that you now have to go to the Supreme Court to deal with a lot of these issues. This bill will move us more into arbitration and mediation and even compulsory arbitration and mediation in some cases — all moves in the right direction, as I have said. But without the licensing standard, accountability of strata developers and proper offence and penalty provisions, that's only a small bite out of a big, big…. A small piece of the puzzle, so to speak.

I could talk about the many other areas that strata councils and strata owners were hoping would be dealt with in this bill, but I know there are other people waiting to speak. I would just close by saying that I hope I'm right. I said this in the spring, now with disappointment that it's come back in the same limited form.

I hope we can assure strata owners across British Columbia that this is just a first bite and that after Christmas there will be more, and more over the next year or so, where we'll finally deal with the whole problem for strata owners. As most of us are aging and probably…. You know, in the next couple of years many in this House will be moving into stratas ourselves. We'll all want to be consulted for changes too.

R. Fleming: I appreciate the chance to participate in the debate this afternoon on Bill 8, the Strata Property Amendment Act, in particular because in the capital regional district there are 20,000 homeowners who live in and enjoy owning a home of this tenure type.

It is a critically important debate that we're having today, and this legislation is critically important to modernize and amend it in the right way, because many people's family savings and their dreams of home ownership touch exactly upon this act and are governed by this legislation.

Let's be clear. Strata owners have been waiting a long time for the act to be changed. There have been a number of deficiencies brought to government's attention over a number of years, and this government has promised to review this legislation on many previous occasions. They had an opportunity to do that last fall, 2008. That was at least one opportunity, which they did not take advantage of, because, of course, we'll all recall in this place that the legislative sitting in fall 2008 was cancelled entirely.

I appreciate, in the context of this debate, that one does not get too many bites at the apple, so to speak. But I think that the Condominium Home Owners Association of British Columbia and other organizations have made the point, in the public realm, that even though they are among those most impatient at change, that have been loudest and most persistent in advocating for a number of reforms, common-sense changes to the act that have to happen — some of which are in this bill; some of which are not…. They still validate the view that it's important to get legislation changed in the right way — not in just any way but the right way — and that it be done comprehensively.

I think one of the reasons why they can't endorse passing this legislation at this time is because the consultation was not done properly. Not everybody was invited to the table by this government to give their views, to share their experiences and to advocate for certain changes that they felt were long overdue.

Of course, we have jurisprudence to guide us in our changes. We have had the court system spend considerable amounts of its time sorting out some of the common and recurring problems with the act.

Certainly, all of the guideposts are in place for us to get legislation right. But again, the consultation, which wasn't done provincewide and wasn't done in an open manner, wasn't done in public venues allowing strata owners of all types — and there are tens of thousands in this province — to participate and make their submissions known. I think that makes for weaker legislation than we ought to be debating here this afternoon.

Having said that, I think one of the things that is long overdue and that has been consistently asked for is an improved dispute resolution process in the legislation. The fact that the Supreme Court of British Columbia had been hearing cases to do with interpretation of this act in the past, I think, has been a waste of the court's time. And costs for strata corporations…. Certainly, there are other priorities in the justice system than to deal with that.

Now there are avenues proposed in this legislation that will be more cost-effective, more timely and more flexible, which will allow for arbitration and mediation proceedings to solve disputes.

I think people are aware that provincial politics can be a bear pit at times. I'm certainly aware that strata politics can be a vicious thing as well. So the fact that these things can be adjudicated in a more timely fashion at cheaper cost, resolving outstanding issues, is a good thing and, I think, is the main point in favour of the legislative amendment act that we're dealing with today.

I have to speak on behalf of the Vancouver Island Strata Owners Association in this regard, because I have met with them on a number of occasions, and I think their criticisms of Bill 8 are valid. They have pointed out some things missing in the act that could have been contemplated and that could have been accomplished.

One is to look at licensing standards for strata managers. In order to recruit and attract people to work as strata managers in buildings, it requires that there be a certain professional standard, and this legislation doesn't spell out or strengthen the licensing standards we have in that regard.

The other major thing, too — I think it's a good point, especially since we have had and experienced the sudden cancellation of the Homeowner Protection Office this summer, when certainly it has work to be done in remediating properties all over British Columbia — is that in this legislation going forward, we're still dealing with the past. People will be out of pocket, and some people will be losing their homes, because the province has failed a number of strata home owners in dealing with leaky buildings.

Moving forward, looking ahead, this legislation does not provide an accountability framework that is adequate for those developing strata condominium projects in B.C., and I think that's a problem.

Surely, with the liabilities that have been shared by municipal government, by property owners in particular, by everybody who has suffered because of building envelope failures that shouldn't have happened in B.C., then changing this legislation and how those things are dealt with — how liabilities are shared, how accountability is spelled out in legislation — should have been a priority that was better dealt with in this bill.

There are, for example, no offence and penalty provisions that are changed or added in this legislation, which could have served as a deterrent and a guidepost for how disputes around strata property management issues are dealt with. There could have been better — and this is VISOA's point of view, the Vancouver Island Strata Owners Association — conflict-of-interest provisions in this legislation that would have removed people with perceived or actual conflicts from participating in their own proceedings or overseeing their own proceedings. Strata owners are suggesting that that has missed the mark in this bill.

Also, the rights of owners to attend strata meetings and to look at issues around strata fee inequities…. It has been suggested by many of the stakeholder organizations, for whom this legislation is written and serves, that that has been missed in this amendment bill.

I can say — as an MLA in the capital region who represents an area where the vacancy rate in the rental market is below 1 percent and has hovered close to zero percent in recent years, an area that has been without the benefit of government robust family housing programs that build new rental accommodation — that there are many people who would wish to rent privately owned accommodation in strata buildings and are prohibited from doing so because of the bylaws.

In that regard, I think section 23 of this bill is particularly important because it will make it more fair for owners and owner-investors of strata units to have bylaws that are friendly to provisions that allow the rental of properties.

There are suites not far from this building in Victoria — in a rental market that is extremely tight, beyond critically low levels — that are dark at night every night, where people who are paying mortgages and fees on those properties are unable to rent because it has been deemed illegal to do so by strata bylaws.

Now, that practice could continue under this legislation, but there will be more opportunities for owner-investors and strata unit owners to have rights to rent those properties and to demand a process and an explanation by the strata property association if they are going to do that.

I think seeking clarity on that is good for potential buyers, people who are investing in condominium units. That will produce, hopefully, some more confidence in the housing market. If you compare 2009 to 2008, housing starts in this part of the world, just here on the south Island, have declined by 75 percent. We need some market signals.

We've sent a bad market signal on the harmonized sales tax. The closing costs of a unit of housing in this part of the world have just gone up thousands, if not tens of thousands, of dollars for prospective buyers. We need to give some kind of signal. I hope that this legislation, by making it easier for owner-investors and owners of strata properties to rent, will be some kind of positive signal that may mitigate other tax policy measures that government is implementing and that will dampen down demand for new housing starts.

I think that is the bulk of my remarks. There's one more point I might just address in passing, and that's around the depreciation report that is a new section of the legislation, section 15 of the bill.

The opposition members have been asking questions about why government anticipates that there is a quite long two-year lag time for the implementation of this provision. Certainly it is nothing to do with the capacity of market appraisals and those who work in real estate to be able to adjust to this in a more timely manner. They've given the confidence that they would be ready to act sooner than what government allows in this bill.

What we have been asking for in this debate is that rather than have this be spelled out by regulation later, it be part of the main legislative package that we're debating here today. That would serve the interests of transparency. It would provide some certainty now. We've already got the main stakeholders in this province saying that they don't feel adequately consulted on this legislation. They would like more details, and they would like some things that are missing from the bill to be included now, while they have the opportunity to do it.

The depreciation report section of the bill also speaks to that, I think, flawed process that should have taken place over the summer or whenever, when government has had ample opportunity to do so — a fulsome consultation period. It wasn't, and I think the legislation is weaker than it ought to be because that work wasn't done at the front end of the legislative process in drafting Bill 8, which is before the House today.

Thank you very much, Madam Speaker, for allowing me some comments this afternoon.

B. Ralston: I want to address Bill 8. There are approximately 460,000 strata properties in British Columbia. Increasingly, about 25 percent of the population, I am advised, lives in strata property. Increasingly, it's a choice that people make as to the place they live.

The Strata Property Act regulates — probably to a greater extent than municipal bylaws do in the jurisdiction in which the strata corporation might find itself — the very intimate details of how the building is run, costs to individual owners, the regulation of disputes — which, given that sometimes those disputes arise between neighbours or immediate neighbours, can be very aggravating and vexing to the parties concerned and to other people who are residents or owners in the building.

Although this may not seem like glamorous legislation, it has an effect on the lives of tens of thousands of people and on a number of disputes that inevitably arise when people live in close proximity to one another.

Now, this bill does make a couple of changes, but it falls far short of the promise that the then minister responsible, the Minister of Finance, made here in this House. Admittedly, that was prior to the election, but when this bill in very similar form came before the House, only to die on the order paper when the election was called, he did say the following.

I want to quote just so that I have the Minister of Finance, the then responsible minister, accurately:

"We should go out and invite feedback from organizations rather than pushing this bill through to a conclusion in a rushed manner.

"I certainly invite that feedback in the weeks and months to come. This is a bill that obviously will not complete all of its stages before this House rises. But it is certainly a piece of legislation that if we are re-elected as government, we are committed to bringing back into this House. We're committed to assessing the constructive feedback that comes from condo owners and strata property associations, property managers, the general public and anyone with regard to what's in the bill."

"If there are changes that are desirable, then we would consider incorporating those changes before this bill would be reintroduced."

Now again, perhaps in the kind of expansive moment that the minister was experiencing prior to the election, he made very broad and sweeping statements in the passage that I've just quoted. Unfortunately, in putting together the bill and beginning the consultation that was promised, none of that came to pass. A very narrow consultation took place. The bill is very limited in its scope. A couple of changes are made, but it's almost identical to the bill that was presented before.

Essentially, what I am told is it was very much a closed door process and relied on input, private meetings, between government officials and developers, property managers and those people invited to speak with the proposed drafters of the bill.

Now, there's certainly nothing wrong about consulting that part of the industry — indeed, it may be valuable — but the promise was made to consult much more broadly. Given the number of people that live in strata properties, given the activity of strata property owners associations, given the long list of recommendations that they have for what I think are real improvements to the legislation, that opportunity seems to have either been missed or deliberately avoided. That is certainly regrettable.

The importance, I think, for this kind of legislation is a consultation process where these individual…. They are fairly narrowly defined. They're carefully thought-out suggestions that come from many who have suggestions to make the act more workable, to resolve disputes more quickly, to address some of the inequities of finance and, indeed, the role of owner-developers, who sometimes have a disproportionate influence in the operation of strata corporations.

There are a host of reforms that have been recommended, and the government seems to have not been interested in this process to receive any of those. Certainly, they are not reflected in this legislation.

I have been, through some of the consultation I've done, particularly with the Vancouver Island Strata Owners Association, who presented a very detailed brief…. I understand it's been forwarded to the government, although it's not clear to them whether it was received or considered or just what steps might have been taken from their very detailed and carefully thought-out submissions.

I want to make some comments based on their analysis of the bill. Aside from the fact that the consultation didn't take place, they are concerned that the bill does not address the weak licensing standards for strata managers. Often conflict arises because of the conduct, sometimes considered to be…. This is certainly a minority of management companies, but where there are conflicts and where there appears to be unethical or unprofessional conduct by strata management companies, conflict arises.

The regulatory body that the complaints are made to doesn't really seem to take an interest in those kinds of complaints. It's the Real Estate Council of B.C. They licence strata managers, and they've been, in the view of this organization, unresponsive to those concerns.

The bill doesn't address the accountability of strata developers for non-compliance with the act or misrepresentations that might have been made to prospective buyers. It doesn't have any offence and penalty provisions. It's significant to note that legislation in Alberta, which we often hear from the government is to be considered when considering legislation, has offence and penalty sections. So does Ontario, where again there is a fairly well-used act, given the number of strata properties in Ontario. So there's no real deterrent to breaches of the act, no mechanism for addressing those in that way.

It doesn't define the meaning of "common property." This can be a dispute, because assessments are made on the basis of common property. Where there is an uncertain and unclear definition of common property, disputes can arise.

Bad legislation or inadequate legislation that doesn't address this problem just gives rise to disputes where a judicial interpretation is required, rather than having the drafters deal with that problem at the outset and avoiding the resort to litigation to define what should have been contemplated by the drafters in the first place.

They go on to say that greater clarity is needed in the definition of what's defined as a conflict of interest. Section 32 is expanded but doesn't really go far enough where the owner-developer is a council member and uses or may be seen to use his position to enhance his or her financial position at the expense of other strata owners.

It's a case where the owner-developer is on the strata council and may use that position to vote on matters which may be of financial benefit to that person. It's pretty clear that that is a classic definition of a conflict of interest. These amendments don't address that in a clear way, doubtlessly giving rise to further disputes and further litigation — again, which could be avoided by the careful and thoughtful attention of legislative drafters at this stage, rather than just leaving it for another time.

Section 6 fails to embed the right of an owner to attend a strata council meeting as an observer. This right can be and has been removed from the bylaws of some strata corporations.

One would think that if you're a strata owner, if you're a member of the strata corporation, you would have the basic right to attend the meetings of the council. Apparently, in some cases it can be removed, forbidding an owner from coming to the meeting where matters of a financial interest to that person would be decided. This bill doesn't address that.

It doesn't remove the requirement for a three-quarters, or 75 percent, vote of owners under section 39 to remove a management company as the management company from the strata corporation. The acts, I'm told, in Ontario and Alberta, often the touchstone for members opposite, do not have that requirement. What it does is…. It's a high hurdle to overcome to remove an incompetent or inefficient or ineffective strata management company as the company and replace it with another one that the owners so choose. That is not addressed.

Strata fee inequities are not addressed, arising from the limited options for unit entitlement available to the developer under section 246(3) when a strata plan is established. Once that's established, then a unanimous consent is required to change that allocation. That's as one might expect — usually, as a practicality, impossible to achieve.

It relies heavily on regulations, which could allow — it's not clear, and doubtlessly the critic, the member for Vancouver-Hastings, will pursue this at committee stage — for exemptions from depreciation reports and audited financial statements, two of the amendments to the act that this bill does bring before the House.

Parliamentarians and those who observe parliamentary processes have often spoken about the balance that's required between legislation, which is done openly and publicly and debated and proceeds through the House, and the power of regulation, which of course does not proceed through the House. It's done by an order-in-council — that is, the cabinet sitting in private, subject to freedom of information.

Ordinarily, cabinet confidentiality does not permit much insight into why a decision was made or what options were discussed and very little opportunity, if any, for public input. The balance between the legislation and the power that's given under the act to make regulations is of concern to those who observe these matters.

Those are some of the concerns that are expressed about the bill as it is. Given those concerns and given what I think are broad and constructive suggestions that the Legislature and indeed the 460,000 strata property owners in the province might benefit from, I think it's important that there be further consultation on this bill.

[That the motion for second reading of Bill 8, intituled Strata Property Amendment Act, 2009, be amended by deleting the word "now" and substituting therefor the words "six months hence."]

I've read and referred the House to the comments of the Minister of Finance made in March of this year about the fact that he welcomed a broad consultation. It's clear that that hasn't taken place.

Ordinarily, I don't think this would be necessary. But given the importance of this legislation and given what appear to be the many constructive suggestions, I'm firmly of the view that the House, this legislation and the minister — who's, I'm sure, in a very constructive mood when considering this bill…. I don't think it's a highly partisan issue, but certainly there's an opportunity for the House to work together and improve this bill.

By delaying the discussion of this bill for six months, the government will be able to go out, have that broad consultation, come back with a better, more comprehensive bill that will be of benefit to British Columbians who are concerned — and there are many — about these issues.

We don't have any desire to delay this inordinately. What I would say is that this is important legislation. It is legislation that we know that those in the sector are looking for.

What we've been told, though, in regard to this — and we've been told it by a number of organizations and by individuals — is that they felt they had a commitment. They had a commitment back in March. At that time this legislation — or its predecessor, Bill 12 — was introduced by the now Minister of Finance, who had responsibility for that.

On March 31 in Hansard the minister made commitments. He essentially made commitments that, by their nature, almost made this an exposure bill — a bill that allowed a discussion to go on. The minister who had responsibility for the bill at the time, the Minister of Finance, said there did need to be consultation. There did need to be broad discussion around this. The government was looking forward to getting the opinions and views of a wide range of interests, including the million-odd people who live in condominiums around this province.

That never occurred. That consultation never occurred. Because of that, we're now in a situation where we felt the need to bring forward this motion at this time to make that point.

So this is a delay that we're proposing that is unfortunate, but it's a delay that's caused by the government not keeping its promise to people who live in strata properties that in fact they would be consulted, that in fact there would be that discussion.

What we know is that while the bill contains a number of important pieces — and at the end of the day we will support the bill — the reality is this: it is a half a loaf. The bill is half a loaf.

There are a number of issues that are not addressed in the bill that those organizations, like the Vancouver Island Strata Owners Association, like the Condominium Home Owners Association, have said need clarification.

As the previous speaker, the member for Surrey-Whalley, noted, there are a number of pieces here that are dealt with through regulation and not legislation. I know that those organizations…. First of all, their preference certainly would have been that they be legislated. But equally important, they would like to have the opportunity, I know, to have a conversation with the minister or the minister's officials about what those regulations might look like when they deal with audits or deal with depreciations or deal with those other matters. That opportunity isn't here.

We've heard from those organizations. The Vancouver Island Strata Owners Association certainly commented. The Condominium Home Owners Association, which represents about 100,000 units across the province, in a release that they issued on September 22, said:

"The Condominium Home Owners Association is calling on the provincial government to conduct a public consultation prior to making any legislative changes to the Strata Property Act."

"The Condominium Home Owners Association is advocating an open public consultation process. This legislation will have a significant impact on the use and administration of strata properties once the regulations come into effect. In addition, this legislation will impact other stakeholders such as professional engineers, certified general accountants, the real estate and development industry and requires the input of each of these industries before we can move forward.

"Prior to proceeding any further, we ask that the minister slow this process down and convene public meetings provincewide that will allow strata owners and those involved in the strata industry to comment on the proposed…amendments. Those directly impacted by the legislation need the opportunity to make the appropriate submissions."

We have heard from people in the sector that they want to support this bill. They don't believe that the bill does everything that they'd like to accomplish. There are things about the legislation, because of the nature of regulation versus legislation, that are not clear. We will make every effort to go through that in committee stage and to get that clarification.

But the best way to deal with this would be to hoist the motion, as this amendment calls for. Allow people a few months to have this discussion, as was committed to by the Minister of Finance back on March 31 when he introduced Bill 12, the predecessor to this bill. Have that discussion. Have this legislation back with the amendments or changes that are deemed to make sense based on consultation with the industry and with homeowners, strata owners, and be able to pass this in the matter of a few months.

Again, it's unfortunate that that's necessary, but if the government had fulfilled the commitment they made in March and had that consultation between March and now, we wouldn't be in this situation. But the government didn't fulfil that commitment that they made to people in the sector, and as a consequence, we are where we are today.

Our desire would be that the government do what it said it was going to do — hold a public consultation, speak to people who are interested and committed in the sector, make the changes that make sense, bring back the bill where we get a whole loaf and not half a loaf. It will be a better piece of legislation for it.

Hon. R. Coleman: I'm going to respond to the member's motion — quite lengthily, perhaps.

First of all, let's be clear about something. It's been seven months since this legislation was in this House. After the legislation was introduced in the House, every single person that had made a submission to government was written and asked for more information if they wanted to submit it. That's called consultation.

Now, the members opposite don't like this piece of it, and this is interesting to me. It's a time-honoured tradition in this House — and members opposite that were around at the time will remember — that when you're doing legislation, you actually do consultation in a confidential way, because you don't put legislation out there in draft without having people sign some sort of a document of confidentiality.

There's a reason for that, hon. Members. Legislation can affect trade practices and economies of things, and that's why it's done that way. I want to be clear. The members don't want to hear the truth. That's fine.

So 19 parties provided comments to the Ministry of Finance staff on the drafting instructions to the amendments to Bill 12 as they were being developed. These included condominium associations, including the Condominium Home Owners Association; the Pacific Condominium Association; the other condominium associations; strata managers; strata properties of British Columbia; developers; the Urban Development Institute; the Real Estate Council of British Columbia; several property solicitors; and members of the general public.

It is routine for government to ask that those reviewing legislative amendments pledge to keep the material confidential. The individuals and groups above signed undertakings of confidentiality. That's how it's done when you do the draft.

Next step. The other major organization that actually represents strata properties in British Columbia, which is the Vancouver Island Strata Owners Association, was invited to be part of that consultation on the draft legislation and declined to participate in the confidential review.

The member for Victoria-Hillside, or whatever it is, was up here a minute ago complaining about the fact that the Vancouver Island condominium association never got a chance to consult. They were invited to, and they didn't, hon. Member.

I know that you guys would prefer that we delayed this legislation and went to a six-month hoist. Then all the condominiums in the next six months that come into the marketplace can all have rental restrictions on them and not be stood up and not be held up for the people who live in them. We lose more and more rental stock. That's one of the things this legislation actually fixes.

I've got a whole bunch of other comments about what these members have to say, but I can tell you what. It's so typical of the NDP — delay, delay, delay, deny, never do nothing and never get anything done. This legislation needs to go forward for people in condominiums in the province of British Columbia. We will be voting against the hoist motion.

Mr. Speaker: Hon. Members, the motion is to the amendment of Bill 8, Strata Property Amendment Act, reading as followed, by the member from Surrey-Whalley: "I move that the motion for second reading of Bill 8, Strata Property Amendment Act, 2009, be amended by deleting the word 'now' and substituting therefor the words 'six months hence.'"

YEAS — 32
S. Simpson	D. Black	Fleming
Farnworth	James	Kwan
Ralston	Popham	B. Simpson
Austin	Karagianis	Brar
Hammell	Lali	Thorne
Horgan	Bains	Dix
Mungall	Macdonald	Corrigan
Herbert	Krog	Gentner
Elmore	Donaldson	Fraser
B. Routley	Huntington	Coons
Sather		Trevena
NAYS — 45
Horne	Letnick	McCrae
Stewart	Coell	McNeil
Chong	Polak	Yamamoto
Bell	Krueger	Bennett
Stillwell	Hawes	Hogg
Thornthwaite	Hayer	Lee
Barnett	Bloy	Reid
Lekstrom	Falcon	Heed
de Jong	Hansen	Bond
MacDiarmid	Abbott	Coleman
Thomson	Yap	Cantelon
Les	Sultan	McIntyre
Rustad	Cadieux	van Dongen
Howard	Lake	Foster
Pimm	Dalton	Slater

Mr. Speaker: Seeing no further speakers, the Minister of Housing closes debate.

Hon. R. Coleman: Through to this, as I close debate, I have a number of issues I want to address on behalf of the comments made by the members opposite.

Mr. Speaker: Minister, would you just wait a couple of minutes while members….

Hon. R. Coleman: The Strata Property Act was actually passed and given its royal assent in 1998, and it took effect on July 1, 2000. It replaced the earlier Condominium Act.

Over the years this particular piece of legislation has been amended by successive governments as issues came forward, which is actually kind of routine with regard to legislation like this because rewrites are often lengthy and time-consuming and don't address the immediate issues that people may have or concerns they want to address.

Hon. R. Coleman: First of all, it significantly improves the dispute resolution process for strata corporations and strata owners. When the original act was written, I remember doing the debates with one of the members opposite back then and discussing this particular piece of legislation. There was some concern raised, as I recall — whether it was at committee stage or in a briefing — with regard to trying to put this into the courts for a group of people that have to learn to get along and try and find out how to mediate their issues over time.

There's a sense of maturity that has to come into something like the Strata Property Act and strata relationships. Over time, we did get to a point where we were spending more time, having people spend excessive dollars unnecessarily to try and settle disputes within their strata properties.

By making it go more to mediation and arbitration, it actually gives us an opportunity to start to bring back what strata corporations and strata relationships were supposed to be in the first place. That was a group of people who would have two pieces: a unit entitlement within a unit, which basically becomes what is mortgageable to them as their piece of property, and then common property and limited common property, which would be available for their use or limited use by one of the residents, depending whether it's a patio or a deck or whatever the case may be.

Strata property should be clearly stated, because one of the members opposite seemed to not understand that townhouses were actually strata properties, as well as condominiums. In actual fact, they are. There are also things like bare land stratas that actually affect strata property in British Columbia as well, which is basically strata titling just the land, and the residence on top of the land being owned by the person — the strata lot being their strata lot for that particular residence.

That was one of the objectives, as we've heard over the years from people with regard to strata properties. Consultations and discussions have taken place — and government relations meetings and meetings in ministers' offices and MLAs' offices. Submissions have been made on this particular act probably for about two or three years.

We also wanted to enhance consumer protection and increase accountability. This is a pretty key piece for a couple of reasons. For instance, I've owned three condos in the city of Victoria over the years I've been here. If I go and make an investment in a particular piece of property, I make it with the information that's in front of me today. If I go to buy a piece of property, make an offer of purchase and sale, and in that offer of purchase and sale and in the bylaws of that organization it clearly states that my unit can be rented, and I make that investment on that basis, that should not be taken away from me.

However, the act as it exists allows, by a three-quarter vote, a strata corporation to decide that it's no longer a rental building. That does two things. The first thing it does is basically grandfathers me, who might own it, until the time I sell it. Then I'm stuck. It takes a whole bunch of product out of the marketplace over time, because no longer can those units be in the rental marketplace. We end up with an issue where an investor — coming from Asia, Europe or wherever they may come from across Canada — buys a piece of property and finds out after the fact that somebody has allowed those people to change that investment.

This also allows us to do some other things for consumer protection. One of the issues some of the members may have come across in strata property and that this actually enables us to fix is this. There are strata properties in British Columbia where people have bought a townhouse, and the townhouse had an unfinished basement. By the time they bought the property, the only piece of their unit that was in the unit entitlement for the calculation of strata fees was a finished area of the building. They made the investment on that basis of unit entitlement, and that's what their strata fees would be.

Some strata councils have decided afterwards…. As development has changed and densities have changed in the building, as smaller units have come in — phased development and what have you — they've come along and said: "You know what? We want more money from you because you've now finished your basement." They didn't make their investment on the basis that that would ever be the unit entitlement. That has actually gone to court, and the courts have decided that unless we change the legislation or regulation, that can happen to somebody.

Imagine if you're a senior living in a townhouse in Langley, Surrey or a couple of other communities that I'm very familiar with, where this has happened. All of a sudden your strata fees go up by 60 or 70 percent, just because the other people in your strata decide to come and try to gouge you for the money. There's a point where there's a fundamental rule of fairness of law and a fundamental rule in the application of principles, and sometimes they don't seem to meet. That's when we have to change something to fix the problem.

Now, it's an important issue. We could sit back and wait and not do it, but a number of these are going to go to court. Millions of dollars perhaps could be spent in legal fees, where if we actually fixed the problem and get on with it, we can actually deal with that situation. We're trying to get to where we get a balance in the housing market.

I remember many years ago having debates with the member for Port Coquitlam. They were friendly debates — estimates debates. We both had one thing, I think, that we both understood, and that was that if we didn't get a balance in the marketplace for people to allow a rental of an investment property or do basement suites or have secondary ideas in housing or, in actual fact, find a way for the federal government, which hasn't happened in the number of years that we've been in this House, to allow us to have the pass-through on taxes and costs for recapture of capital gains, we were going to end up with a rental crisis in the province of British Columbia, because nobody would make the investment anymore.

That's what's starting to happen, and this legislation allows us to change it on the condominium side. On the long-term side, there are some issues with regard to taxes, etc., in housing that we need to fix. It actually provides a framework for the creation and the operation of strata developments in British Columbia.

This is so key, because there are a number of stratas — and few, by the way — where there is this discourse within their operations. They're the ones we hear about — when there are almost half a million condominium units in British Columbia serving about a million people. Most of them function well as a group of people at a board, with their rules and regulations, and some of their bylaws actually function pretty well. But there are those that have difficulties, and that's what brings us to the House to try and see if we can strengthen the guidelines or clarify it.

The one thing we should know about legislation, though, is that we can't actually legislate human behaviour. All we can lay out are the guidelines and principles that people should conduct themselves, either by statutory law or by regulation, in order to set those guidelines and how they should operate. As they do that, it's important to recognize that over time you will amend a law in order to adjust some of those issues.

Now, these amendments, contrary to what some people have said, actually have been part of consultations with a number of people — associations, strata developers, the Real Estate Council of B.C.

I've been an MLA for almost 14 years, and I don't think I've gone through a year where I haven't had at least two or three people come into my constituency office and give me papers on strata property and recommendations and ideas that I've forwarded either to a minister, the minister responsible or to a portion of government to talk about it.

As we do this, we need to improve the ways we do it. We need to lower the temperature with regards to how that relationship is built within the strata corporation. We need to make it inexpensive, efficient and fair, and that's why we're going away from the court side to small claims court, mediation and arbitration.

This act also allows us to deal with other issues that are often of concern with regard to strata properties. I know some of the members opposite had some concerns and issues, they said in second reading, about conflict-of-interest rules. We believe this improves it. I'm sure that during committee stage, this will have a discussion with the members with regard to that. But there's very little in there today with regard to conflict of interest.

My biggest concern, as I listened to some of the debates, was it seemed that members — and not all members, but a couple of members — opposite were basically saying: "The owner-developer is bad. The owner-developer sets his rules. The owner-developer is going to take away my rights." The owner-developer still is tied to unit entitlement for strata fees like everybody else.

One of the things we should remember is that at the beginning of this process, somebody who wants to expend millions of dollars to take the risk to build the condominium building in the first place, who will then make it available for sale or rent as it comes through…. Without them, we don't get the housing — period. So they're a partner in this, and they're not to be vilified as one member did with regards to one particular project in one particular community — which I still haven't received the details on or in fact remember.

But you should remember that most strata properties…. Any member here who has been in local government or around the development business or the real estate business or been a consumer will know that most of these are handled extremely professionally on the transition over, and the transition over just needs to have rules around it.

So as we do this, we have to remember something else. Somebody was talking about how the Strata Property Act should deal with how the building is built. Well, it doesn't. The Strata Property Act is about the relationship on property that is owned by individuals, unit entitlement in condominiums and the relationship of that group of people to make decisions on behalf of the whole condominium operation, plus make decisions on finances and costs.

The building standards branch, the building code, engineers, architects, planners, municipalities and building inspectors take care of the construction site. We changed the rain screening, as the members know, ten years ago in British Columbia in the building standards and code to a credit of a report done on leaky condos back in about 1999. We changed those rules so we could change the standards to react, and that wasn't done through the Strata Property Act. It was actually done through the building code. That's not unusual because that's the way it should be.

The issues as you come through this are interesting and require some clarification. The first one was one member opposite went into quite a discourse about rentals and how they were renting it or they weren't renting it —certain things — and somebody was nefarious on rentals and all this. So let's be clear. This act is not about some nefarious thing to get people to rent their properties. It's about saying that if you buy a property today, after this act is passed and you are allowed to rent it, you get to maintain that right to do so.

It's not about what we can't go back and retroactively change. It's about what we can do to actually encourage people to increase the rental stock in British Columbia. And if the members opposite aren't in favour of that, they will tell us, I'm sure, at this section during second reading.

One of the other comments which somebody said was: "You've got to do something about licensing strata property managers." Since January 1, 2006, strata property managers have had to be licensed under the Real Estate Act in British Columbia. It was a change brought a few years back. They have to be licensed. They actually report through that very professional setup that has errors and omissions, etc., through the Real Estate Act, and they report through the Real Estate Council. They have to be licensed, and that actually changed on January 1, 2006. So you don't need to put licensing in one act when you already have it covered in another.

The act itself. Having talked to the various people — including some of the people whose letters were written and read into the House today — within the last few days who have said, "Get on with this. It's the right piece of legislation. You're doing it right. That's what we're asking for," etc., I think we should have to get on with it.

We'll obviously be walking through this thing in committee stage, and hopefully we can pass the legislation in this session so that we can deal with those concerns about unit entitlement, people taking away their rights, the opportunity for someone who makes an investment in a piece of real estate in British Columbia to know that if they make that investment, they can rest assured that somebody isn't going to come along and change its economics afterwards, which I think is an absolutely terrible thing to do to anybody.

It would be like somebody coming to your home and saying: "Now, in this community, if you sell your house, you can't…." or: "You have to sell your house because you can never rent it. So we don't care if you lose money in your mortgage or your house." That's exactly what — some of this — was going on.

We need to fix that. I think it needs to be fixed as soon as possible, and I believe that. I said that in the spring when I spoke to this piece of legislation in second reading. I say it again today.

On that note, as we work forward to what the good parts of this piece of legislation are and what it's going to do that is very important within this relationship of almost 500,000 units in B.C., I move second reading.

Hon. R. Coleman: I move that the bill be referred to a Committee of the Whole House at the next sitting of the House after today.

Bill 8, Strata Property Amendment Act, 2009, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. Hansen: I call committee stage on Budget Measures Implementation Act (No. 2), 2009.

The House in Committee of the Whole (Section B) on Bill 2; C. Trevena in the chair.

S. Herbert: We were talking in the last session about section 13, which basically strikes out "…for the purposes of Tourism British Columbia" and substitutes "for the raising of revenue for the purpose of promoting tourism."

At that time I was speaking about some of my concerns about how we're moving away from performance-based funding, dedicated funding to tourism to go for the Tourism B.C., the agency which…. I must say and to read into the record again just what an award-winning organization Tourism B.C. was and continues to be, since it's not wound down completely, and about how Tourism B.C. really is a model for other communities because its funding is secure, it is dedicated and it is performance-based funding.

I think back to the session when we were talking about this before. The minister, when asked: "Is this guaranteed funding; is this dedicated funding mandatory…?" Is this mandatory, I believe, was the question. The minister wouldn't say it was mandatory in terms of the law. He would say it was an obligation.

Well, we've seen from this government before how they say, "Oh well, yes, this is an obligation," but in fact, that doesn't turn out to be the case because they change that.

I think about the gaming money, which is supposed to be dedicated to charities, but the government has found a sneaky way to take that money and put it into programs which used to be funded by taxpayer revenues. That's why I'm spending such an amount of time on this.

Since the last discussion on this, I've spoken with a number of tourism operators. They've told me that they are disappointed in the playing with semantics, as they called it, the playing with words — how it's not mandatory, but it is an obligation. As we know, obligations are different than mandatory, because if it's mandatory, you have to do that, whereas obligations…. At least you would think you have to do that, but as we've seen before, the government has many obligations which then are not followed through with because they're not legally required to and won't face a penalty if they do otherwise.

I'm wondering if the minister would give me his definition of the word "obligation" and whether that's legally obliged or if that's just a moral obligation.

Hon. K. Krueger: This is actually a repetitive question from what we covered at length the last time we spoke. The provision that is introduced — raising of revenue for the purpose of promoting tourism — is much more specific than the raising of revenue for the purposes of Tourism British Columbia.

S. Herbert: Well, I differ with the minister about his answer. He, I believe, has not answered my question, which is: is it legally obligated, or is it just morally obligated funding?

I find it troubling that he tries to say this is stronger than Tourism B.C. When the money went to Tourism B.C., they had their own dedicated board of directors, a board of directors made up of industry experts whose livelihoods depended and depend on the tourism industry.

Now what we're seeing is that the government is doing away with Tourism B.C. and replacing it with the minister and a couple of his handpicked advisers, which isn't the same as the professionals deciding how that money would be spent. Instead, it's much more open to political interference.

So again, maybe the minister can tell me why it's not possible for him to answer if this is mandatory — yes or no — under the law.

Hon. K. Krueger: The directive provisions in the Hotel Room Tax Act respecting this tax are in no way diminished by the amendment. If the members opposite are ever government — heaven forbid — they can introduce other words if they choose, but there is no legal encumbrance in the Hotel Room Tax Act presently for the revenues collected through the hotel tax. There is no statutory appropriation attached to the provision, and there is nothing changed in a negative way with this amendment. That's still the case.

S. Herbert: I'm just curious. The minister said that there is currently no legal encumbrance to the hotel room tax. Could he explain to me exactly what that means? Is it that it could be spent anywhere, but the government has chosen to spend it here?

Hon. K. Krueger: I just explained that. There's no appropriation under the existing provision or the amendment. The funds flow through the Ministry of Finance for the purposes stated.

S. Herbert: What I'm hearing from the minister is just backing up the concerns of the industry, which is that there is no legal encumbrance to how the hotel tax is spent.

The government used to say that that money went to Tourism British Columbia, where the board of Tourism British Columbia would decide where that money got spent and how best to market our province with a long-term vision so that we could plan, and the industry could plan, more than a year out.

What this government has done and the minister has done is done away with Tourism B.C., got rid of its independent board of directors and instead replaced it with himself and a couple of handpicked advisers, which to me is quite a difference in terms of how we market our province, in terms of who's calling the shots.

I know we'll get to discussion of the board of directors later versus a handpicked advisory panel, but I guess I'll turn back to my question, since the minister has refused to answer it so far. Is there a legal obligation that this money be spent on tourism — so that if it's not spent on tourism, the minister would be breaking the law?

Hon. K. Krueger: Again, that's a repetitive question. I have said repeatedly that it is a legislative obligation. That's what a legislative obligation means: a legal obligation. Legislation is law.

S. Herbert: I'm hearing two things. First, the minister says there's no legal encumbrance to how the hotel room tax is spent. But now he says that the Legislature obligates them to spend this portion on tourism. Can he justify or explain to me the two differences here?

Hon. K. Krueger: There was no specific appropriation required under the legislation as it exists today. What we are doing is imposing a legislative requirement on government that the funds will be used for tourism promotion.

So nothing has been lost, with regard to the member's concerns. In fact, arguably, it will be easier to follow the money with this arrangement, because the Ministry of Finance will be reporting the specific amounts that flow to tourism marketing under this provision.

S. Herbert: The minister stated that before there was no specific appropriation, but now there is. Wasn't it a specific appropriation in that it was going to Tourism B.C., which had a specific mandate and independence to spend it on tourism?

Hon. K. Krueger: To answer the member's question, an appropriation means a dollar amount specified. What we have, by way of tracking the expenditures that the province has made on tourism promotion over the years, is in the public accounts.

In 2005-06 it was $50.237 million; in 2006-07, $57.511 million; 2007-08, $52.433 million; 2009-10 estimate, $92.9 million because of the additional appropriation to take advantage of the Olympic opportunities; estimate for 2010-11, $55.175 million; 2011-12, estimated at $58.208 million.

When the NDP was government, the amount that was allocated was about $25 million, and that was by direction of the Treasury Board of the day or cabinet, not by legislative obligation such as the one that we are setting out. It was this government, as I mentioned to the member in our last discussion of this, that set up the revenue stream that has been funding Tourism B.C. and will continue to fund tourism promotion.

S. Herbert: That's helpful, and I thank the minister for putting those numbers on the table. I guess the big question that I have…. I understand the minister has charted out to the future here. Now, if hotel revenues were to go up and the tax brought in more, I would understand it that those revenues would flow through to tourism promotion. Or would they be used for some other purpose?

Hon. K. Krueger: Well, as I just pointed out, we've substantially more than doubled the funding that the NDP government of the '90s was providing. It's certainly our intention to continue to do so in reflection of the growth of the economy, which I certainly think is going to happen in the years ahead. Our intent is certainly to continue to flow funding for tourism promotion, using the mechanism of revenues from hotel room taxes.

S. Herbert: Now, intent and action are different, and I understand the minister says that this is his intent. Is that because it's just good will, or is that because it legally has to happen?

Hon. K. Krueger: This is getting very repetitive. It's because there is a legislative obligation.

S. Herbert: I'd like to thank the minister for sharing on this section 13. I do see that my colleague here from Victoria–Swan Lake has arrived, the former critic for Tourism and a big supporter of the sector. I wanted to make some space so that he could ask a couple of questions as well.

R. Fleming: I would like to ask the minister: following July 2011 what will happen to the certainty that the tourism industry needs around revenues that have previously flowed to them independently of government, away from general revenue, to fund tourism marketing purposes for the province of B.C.?

Hon. K. Krueger: The critic introduced this member saying that he has just arrived. We have covered this ground substantially today and last debate. This amendment imposes a legislative obligation to flow these moneys for the raising of revenue for the purpose of promoting tourism.

Madam Chair, I trust we won't have to cover all the same ground again because a new member has arrived.

R. Fleming: I just wanted a simple answer from the minister on the question of what he anticipates is likely to happen when it will be up to his government to decide beyond July 2011 how hotel room taxes will be collected and remitted.

Hon. K. Krueger: Well, if the member would please read section 13…. What will happen is the raising of revenue for the purpose of promoting tourism, under this amendment.

R. Fleming: Would the minister allow a purpose of raising revenue for the promotion of tourism…? Would he allow in that definition debt-servicing of the trade and convention centre in Vancouver as an inbounds part of the definition?

I am aware that this question has been asked, but it wasn't answered definitively, so I want to give the minister a chance to do that again.

Hon. K. Krueger: It was definitively answered, and the member would know that if he had read the Hansard.

S. Herbert: Speaking of section 15, and I mentioned it earlier, I'm curious how the minister thinks a handpicked group of advisers is better than a board of directors setting the targets for tourism in this province.

Hon. K. Krueger: The Crown corporation that was known as Tourism British Columbia obviously is being dissolved, and that process will be complete April 1, 2010. In the meantime, the people who work for Tourism British Columbia — all but one — have the management structure of the ministry.

Additionally, I have committed publicly to a minister's council on tourism. At least two of the people on that council — people who have agreed to serve on it already and whose names I won't be divulging until all the members of the council are named — were members of the Tourism British Columbia board before we dissolved it.

S. Herbert: I raise this point because it's one that I've heard from many people who work in the tourism industry, from small organizations to the very biggest and from all corners of our province. They liked that they had a board of directors who was watching out for them. They liked that they had a board of directors who actually set direction and were able to be held accountable for their decisions. They liked that that board of directors was made up of their industry and actually had power. They thought that was important to the marketing of our province and to the way forward. I agreed with them, and I still do.

I think it is important in terms of marketing our province that the people who rely on that industry be the ones who are most involved.

Now, I'm very curious. I would like to know. Would the minister tell me: would his minister's council have any sort of official decision-making power, or are they advisers?

Hon. K. Krueger: Since the announcement of the changes with Tourism British Columbia, I've had a great deal of interaction with the representatives of the Council of Tourism Associations — COTA.

Our government, unlike the previous government, has its ear to the ground across the board. Nobody has to hire a lobbyist to be able to provide input to this government. Whether it's COTA, whether it's any of a whole range of people in the industry and other industries that want to express an opinion to government, they're listened to. The minister's council on tourism is going to be a group of people with a great deal of experience in the industry, and they'll be listened to closely.

When the member says that he's talked to people who liked what they had, I don't doubt that people say that. I wonder if the member asked them if they liked what his leader said at the UBCM convention about changing the tax cuts that their businesses and their industry have enjoyed or the NDP's pledge to legislatively increase the salaries of their entry-level employees.

Government doesn't always do what select groups of people want. I don't think that the tourism industry liked any of those changes at all. The fact is that, as I explained at the beginning of this debate, presented with the biggest marketing opportunity British Columbia will ever have in our lifetimes, which is through the Olympics, and the biggest challenge economically that most of us have seen in our lifetimes, which is a worldwide recession, we decided that we needed to make these changes in order to maximize the use of our resources — financial resources and human resources — to eliminate administrative overlap where it exists and to use that money, also, for marketing.

We've seen a $38.6 million lift in the September 1 update for these purposes of tourism promotion. So the proof is in the pudding. The interactions that I'm having with representatives across the board of the tourism industry are very positive.

S. Herbert: Well, I thank the minister for sharing, but as they say, sometimes there's a whole bunch of bluster — what's the quote? — but not a lot of meat, signifying nothing. I think that's the quote. I asked a very specific question. The minister decided to talk…. Well, let's start. He talked about the Olympics.

Okay, if he wants to talk about the Olympics, why would you take the axe to the industry's leader right before the Olympics? People are flabbergasted. They say: "Okay, let's destroy morale in the tourism marketing industries. Let's throw it all into confusion. Let's take it to a place where people don't know if they're coming or going." They don't know where they're going to be able to get marketing support next. They don't know why the minister has done it.

They look to the response from the minister. He says: "Uh, well, okay, it's about administrative savings." Then the reporters ask him: "Oh. Well, what are the savings?" Well, they're not really able to share how much in savings because he doesn't have the figures.

So let's just talk about the Olympics. It is a great marketing opportunity. I don't get why the government has decided to go after our marketer right before the Olympics. It doesn't make a lot of sense to me. The minister then goes on about how his government is so open and so listens. You would never have to hire a lobbyist to talk to this government.

Well, I don't know if anybody watching the news, anybody watching anything related to B.C. politics would know…. This government has seen probably more lobbyists than any government in history in B.C. You look at it, and sometimes it's former members. Sometimes it's others related to the political party.

You talk to the universities. They've hired lobbyists because the government isn't listening. You talk to Whistler. Oh, they've hired a lobbyist because the government isn't listening.

I think the minister needs to think a lot more about his remarks before he makes them, because lobbyists are one of the only things this government seems to listen to. Oh, and you talk to the arts community. They've hired a lobbyist because this minister doesn't listen to them. He knows that.

I don't understand why he would make such a claim, aside from trying to get off the fact that the question I asked cuts to the meat and really cuts through to the bone of the issue with what he's talking about here with tourism marketing in our province.

Then the government…. Oh, another distraction. The minister decides to talk about the '90s, and he talks about a previous government in the '90s. Reverting back to what I think has become almost an instinctual reflex for this government, if you ever get close to an issue — which actually hurts, because they know it's true; they know that they're actually in trouble on this issue — instead, they throw stones. They instead point the other way. "Oh. Well, you were bad. So we're not as bad, but we're still kind of bad."

Well, that's not how you move forward, I don't believe, in politics. You say, "Where do we need to go? What are the best practices?" rather than saying, "Well, you suck, and you suck, so we're not quite as sucky." Sorry, that's not good leadership for me.

So I would like to ask the minister again, and maybe this time he will give me an answer: will the minister's council be able to provide direction, be able to actually tell them, by law, what he has to do or what the ministry has to do in terms of supporting tourism marketing? Or will they just merely provide advice, which can be followed or not, based on what the minister says?

Hon. K. Krueger: What a lot of nonsense. So 146 of the people who were working for Tourism B.C. before the change are now working for government — same people, same high skill sets, same competence, same enthusiasm. There's no demoralization. These people are committed. They're working hard and hand-in-glove with the people who were already employed in the ministry. The minister's council on tourism will give the minister counsel. The minister's council on tourism will not direct the ministry.

S. Herbert: Well, I'm sorry. I don't think it is a bunch of nonsense — what we're hearing from tourism officials provincewide.

S. Herbert: I don't think it is a bunch of nonsense that we're hearing from councillors at the UBCM, saying that they're very upset about the dissolution of Tourism B.C. I don't think that's nonsense at all. I don't think the Council of Tourism Associations are speaking nonsense when they're calling for pretty much exactly what Tourism B.C. was — to have that again. That's not nonsense to me.

I know the member…. Again, he's provided the exact reason why they're upset. So maybe he thinks that it's nonsense, but I don't think it is. When they had a board of directors made up of industry officials, industry experts setting the direction….

Now we have a minister, a partisan minister — a very partisan minister, as we've seen — providing the shots, no longer hearing from the industry through their direction. They can advise him, but if he decides to do something that they think is completely ridiculous or that they don't like, the minister can do it as he will.

Now, in the old way, we would realize that this is an industry that is marketing itself. They're standing up for our province, and it's their livelihoods at stake. I take that pretty seriously. I take that more seriously than a minister who likes to bluster and likes to say things like: "Their concerns are a bunch of nonsense."

Again, can the minister tell me why it's better for him to make the decisions than a board of industry professionals?

Hon. K. Krueger: I challenge the member to read his Hansard from our last encounter and the twisted ways that he says things. It was the member's words that I referred to as nonsense.

Whether the member likes it or not, the public made a decision, for the third time, that the B.C. Liberals would form government. When the Premier appoints a minister, he certainly expects the minister to fulfil the role of leading the ministry.

I've answered the member's question. The council on tourism will provide counsel.

R. Fleming: I just wanted the minister to advise this stage of debate on how this governance model was arrived at and what the timeline is for its development. So if the minister could tell me at what time his ministry staff proposed that Tourism B.C. be wound down and no longer operated as a Crown corporation and be replaced by the minister's advisory council — the new governance model.

If you could just tell the House on which dates that was first advanced, because he mentioned that it was part of the mandate of this government. It certainly wasn't part of the election campaign. So if he could tell them when this was devised in the summer, reviewed by himself, the ministerial decision arrived upon and then the announcement made.

Hon. K. Krueger: The order-in-council was passed, enacted on August 17, 2009. The effective date for the dissolution of Tourism British Columbia is April 1, 2010.

R. Fleming: Just to follow up on that. That fills in a couple of dates on the timeline. I wonder if the minister could share with the House when he first ordered a review, an internal one, looking at the replacement of Tourism B.C. At what point in the summer that we've just had did he do that? When was the report given to him, presumably by his deputy, and what was the interim period between receipt of that advice and a decision made by himself?

Hon. K. Krueger: I think the member knows better than to ask me questions that are about matters subject to cabinet confidentiality.

The Chair: Member for Victoria–Swan Lake, bearing in mind that these issues can also be discussed later on in the bill.

R. Fleming: Did the minister consult with the industry? And are there any industry associations, destination marketing organizations or tourism organizations that were able to provide input on this new governance model that was brought in through order-in-council on August 17? And is there a single organization working within the tourism industry in B.C. that recommended and endorsed this new governance model?

Hon. K. Krueger: I've been consulting with people in the tourism industry since pretty much the day I was appointed to this position.

R. Fleming: Can the minister identify a single endorser or validator for this new governance model — somebody who represents a destination marketing organization or a tourism association? That was the question, Madam Speaker.

Hon. K. Krueger: I've repeatedly advised the critic and would suggest to the member opposite that there's more latitude in estimates debate to ask questions. This is very specific legislation, and the member is way outside.

In any event, I wouldn't name names of individuals or organizations to the members opposite. I hear horror stories of how business people were treated when the party on the opposition benches was in government. They had some very bitter experiences.

R. Fleming: I wonder if the minister could advise this House whether part of his decision which was arrived at before August 17 had the benefit of any advice from a consultant or a review that was provided to the minister that in essence, I suppose, recommended this new governance model.

B. Ralston: Just on a point of order. Is it not for the Chair to make rulings of point of order? The minister seems to decide points of order on his own, without any intervention by the Chair. Surely that can't be parliamentary.

You are here to preside, to make the rulings, to decide on whether or not the questions fall within the bounds of parliamentary propriety and not the minister on his own.

If that's simply another way of saying, "I don't want to answer the question," fair enough, but perhaps he should be candid enough to state that.

The Chair: The questions which have been surrounding section 15 deal with the new governance model, and in that I accept that we can discuss that.

Other questions have been raised which relate further to sections 16, 17 and 18. I'm assuming that they will not be asked in those sections, and so I have given some latitude there. Bearing in mind that we are talking about section 15 primarily, which is the new governance model, I would hope that we can keep our focus on that and be aware that in sections 16, 17, 18 and 19 we have the opportunity to ask more specific questions about the repeal of the Tourism Act.

R. Fleming: The question, then, to the minister is: how long did he and his ministry spend on devising this new governance model that they have now put into a bill to become law here in the House? That's the simple question here.

Hon. K. Krueger: Government has the right and the responsibility to make decisions about delivery mechanisms. We made a decision, which I have explained in detail on the record in this debate, that for the reasons that I've already outlined, we would make this change. As far as who said what and when, those are matters that are between the people involved, and I won't be putting names and dates on the record.

R. Fleming: This is a question for the minister, because this bill names the minister's council on tourism, of five to nine members, solely appointed by himself. Somebody who has incredible power within this organization now, immediately beneath the minister, is the president and CEO of Tourism B.C. — formerly independent, arm's length, selected by the industry and subject to things like international search committees to recruit that kind of talent from the industry itself.

My question to the minister is: in selecting the interim president and CEO, did the minister engage in an international search? Did he include representatives of the tourism industry or even any of the outgoing board members that he dismissed in making that appointment?

Hon. K. Krueger: Well, it was clear this member hadn't read the Hansard. Now it's clear he hasn't read the legislation. The minister's council on tourism is not referred to in the legislation. The interim CEO is the Deputy Minister of the Ministry of Tourism, Culture and the Arts. The two members of the interim board are senior employees of the Ministry of Tourism, Culture and the Arts.

R. Fleming: The question again to the minister is about the interim president and CEO. Was that person selected with the benefit of consultation and inclusion of the tourism industry? Because this minister's asked us to take a leap of faith in previous debates of sections of this bill that the industry will be consulted in the marketing plans and the administration of Tourism B.C., now under his ministry.

The Chair: Member, I don't see how this relates to section 15. If you have a question about section 15, please pose it, but I don't see how this relates to section 15.

B. Ralston: I just want to make sure I understand that the act will be changed temporarily, for one year, to allow the presentation of a budget at a later date, on March 2, to accommodate the Olympics. This amendment will then provide a mechanism to revert back to the previous schedule, as I understand this amendment. Is that correct?

R. Fleming: I wanted to ask the minister if he could advise the House on the costs of dissolution of Tourism B.C. Around August 24, when his announcement was made, he suggested that the motivation for eliminating Tourism B.C. in its current form was in anticipation, perhaps, of $100,000 of savings and efficiencies.

I wanted to ask the minister what the costs of dissolution are, mainly as a way to see what it would cost the taxpayer to restore a properly functioning, independent tourism marketing organization that is being blown up here. This is something that this government once supported when it was in opposition. It has caught everybody by surprise by doing this.

I think it's beneficial at this stage of the debate to be told what the wind-down costs are for eliminating an independent tourism marketing Crown corporation, so that they have an idea of what it might cost to restore such an entity at a later date.

Hon. K. Krueger: We expect that there will be savings in the synergies achieved by working together with the people from Tourism B.C. Again, the member doesn't appear to have read what has been said repeatedly in Hansard, which is that 146 of 147 people who were working for Tourism B.C. are now working within the ministry. Only one person left.

A severance package is being negotiated with him through the PSA, and obviously there will be a cost to that. I can't go into details, and I don't yet know the details, but we expect synergies in combining of administrative support, in combining accounting systems to sharing space wherever that is practical.

So there is really nothing quantifiable by way of cost of dissolving Tourism B.C. other than one severance package.

R. Fleming: It's pretty clear now that this measure was about political control, not savings, because the minister couldn't outline any. He repeatedly suggests that there are no changes and there are no staff reductions. That is the conclusion that was different than his message in the summer, when he was trying to sell this manoeuvre.

I want to ask him about subsection (c) of this section around the property and assets of Tourism B.C., which are being "transferred to and vested in the government" — if he could provide, at this stage of debate, information about the value and addresses and description of the assets and properties that are going to be transferred in this manner.

Hon. K. Krueger: This is a standard clause that is used when transitioning organizations in government. The principal assets are some of the six gateway centres. Some are owned by municipalities. Also, there's furniture and the like. We don't have all of that detail with us in the chamber today, but we can provide that to the member in writing.

R. Fleming: I'm just wondering if the minister could explain in accounting terms what subsection (c) will mean to the reporting entity of government in terms of its overall influence, plus or minus, on assets. Of course, there's a subsection (d) that deals with obligations, so there is going to be a balance there.

But how does it net out for the fiscal position of the province? Descriptions of what that sum would be, I think, would be helpful before any member of this House be asked to vote on this section.

Hon. K. Krueger: There is no change. These assets remain within the reporting entity.

B. Ralston: I think I understand it, but could the minister just briefly explain the purpose of this section?

Hon. C. Hansen: This reflects the fact that we have had the September Budget Update. As was the case four years ago, when the election interrupted the budget process and there was a new budget that had to be tabled, this actually sets out the legislative requirements for…. The reporting that is to be done should be reported against the September Budget Update, not against the February budget.

The Chair: If we might pause for a few minutes while the change of staff comes.

R. Fleming: I wonder if I could ask the Minister of Finance to explain the rationale for the change here in terms of making the Carbon Tax Act compliable with the new renewable fuel standards. Just briefly outline that, and then it might eliminate some questions down the road.

Hon. C. Hansen: As the member will know, there were announcements made around the exemption for biofuels as part of the renewable fuel standard. Part of that was to mandate that, first of all, biofuels would be exempt from the carbon tax and, secondly, that at least 5 percent of fuels in British Columbia would be required to have minimum levels of biofuels in their content.

In terms of administering the exemption, that became extremely complex if you were to try to ascertain what the percentage of biofuels would be in any particular litre of fuel that was sold in the province. So what these amendments accomplish is basically saying that in achieving the objectives of the renewable fuel standard, the exemption would be applied on a broader basis rather than trying to do the assessment on a litre-by-litre basis.

R. Fleming: I wonder if the minister could describe how the 5 percent renewable content was arrived at. I realize that it's referenced in other legislation, but I wonder if the minister could describe the minimum 5 percent renewable biofuel category.

Hon. C. Hansen: The 5 percent was a decision by government. It came forward on recommendations as part of the B.C. energy plan that were put forward by the Ministry of Energy, Mines and Petroleum Resources. The role of the Ministry of Finance is to implement the renewable fuel requirement regulations.

R. Fleming: I realize it's difficult to approximate, in the definition of carbon neutrality, where over the life cycle a fuel becomes carbon-neutral. In this case the amendment here is attempting to recognize the biocontent that is carbon-positive, taking carbon out of the atmosphere — plants and the photosynthesis process.

Now, that may well occur outside the province of British Columbia, but the fuel exemption is granted for fuel and the emission of carbon into B.C.'s atmosphere that is burned here. I'm wondering how the ministry arrived at this formula for the exemption.

First of all, if the minister could comment on where the biocontent and additives for the fuel will come from, maybe that would solve the question as I was posing it.

Hon. C. Hansen: In terms of the energy policy and this change to legislation, it does not matter whether it is a biofuel that is produced in British Columbia or a biofuel that's imported from another jurisdiction.

R. Fleming: Following on that logic, currently in British Columbia you can mine coal. If you were to burn that coal in British Columbia for domestic consumption, you would pay the carbon tax. But if you were to mine coal, export it, and it was released into, say, China's atmosphere, no carbon tax at all would be paid.

I'm just trying to put it on the other shoe here in terms of this biofuel standard. If you were to burn the fuel in British Columbia, but the carbon credit, if you like –– or what triggers the fuel exemption, the bio-additive –– is grown elsewhere, I'm just wondering how that reconciles in our atmosphere here in British Columbia for our jurisdiction where the carbon tax applies.

Hon. C. Hansen: The last time I checked my world geography, there was one atmosphere for the entire planet, and I think that we obviously have to look at it from that perspective.

But I think the other side of it is that by the same token, we have an increasing demand for wood pellets that come from British Columbia and that are displacing coal-generated turbines in Scandinavian countries. So in terms of the wood pellets that are exported from British Columbia, it is actually those countries that are importing our wood pellets that are using it to avoid the carbon taxes they have in those countries.

Clearly, we're at the early stages globally of developing a carbon-conscious global economy. I think through measures like the ones we have before us today and the Carbon Tax Act that we have, British Columbia is certainly doing its part and will continue to encourage other jurisdictions to do likewise.

J. Horgan: I, too, am pleased to enter into the debate on Bill 2 and particularly section 20. I did have a chance to speak with the minister off line last week or the week before about section 34 and how this illustrates some of the challenges he spoke of –– the table in schedule 1, the changes.

But again, now that he has the advantage of his staff present, I'm wondering if he could assist me in understanding what the…. We talk about revenue neutrality. What's the revenue impact of this decision to not exempt biofuels, ethanol and biodiesel?

Hon. C. Hansen: As the member probably knows, as is stated in the budget documents, we produce a chart or a table at the time of each budget that shows how much has been collected on carbon tax, how much is being provided in terms of tax reductions and other measures that provide for that revenue neutrality. As the member will probably know, in terms of the amount that we're flowing in terms of tax reductions and other measures, we have been actually exceeding the amount that we collect in carbon tax.

This change will make a very slight difference in how much we would collect in carbon tax revenue were we to tax all of this at 100 percent rather than the 95 percent. But we will still more than offset that amount with the other measures we take to achieve revenue neutrality.

J. Horgan: I thank the minister. He worked hard for that answer, and it wasn't one I was looking for.

I wanted to know if he could quantify for me the impacts on revenue from the carbon tax, not the neutrality. It was a good answer. It was a very good answer, but it wasn't the answer to the question that I wanted to ask you. That might be a better way for all of us to save face on this.

What is going to be the revenue impact on the carbon tax as a result of this change?

Hon. C. Hansen: Currently, because biofuels are exempt from the carbon tax, there is obviously no carbon tax revenue that flows from biofuels. At the same time, the actual consumption of biofuels is relatively low compared to what we will achieve by the new requirement that there be a 5 percent biofuel component to it. So if we were to continue with our existing structure, whereby gasoline and diesel were taxed at 100 percent of carbon tax, we would actually realize about $19 million a year of additional revenue compared to what we will achieve under this new measure.

J. Horgan: So then, if I understood the minister correctly, I could reverse that and say that there's a $19 million reduction in the carbon tax because of the blending of the exempted fuels with the existing fuels. I'm getting a nod, so I thank the minister for that.

And I appreciate my colleague from Swan Lake. He and I were just conferring. Is the biofuels act that was passed in the last parliament, which mandated levels by date certain, not affected at all beyond the rejigging of the tables that we'll come to in section 34 and a reduction in revenue to the Crown as a result of this blending of the exemptions and the non-exempt fuels?

Hon. C. Hansen: This does not change at all the requirement that a percentage of all gasoline and diesel fuels must be biofuel. That does not change. All that changes with the amendments before us is how the carbon tax is applied to the combustion of those fuels.

J. Horgan: I'm wondering if the minister could assist us in understanding the difference between a collector and a refiner-collector.

Hon. C. Hansen: I think maybe what I'll do is share with the member the note that I have on this. I'll just read it: "This section authorizes the director to appoint a collector to be a refiner-collector. Refiner-collectors are a special class of collectors who may sell fuel to other collectors within the class without paying security on those sales. To qualify as a refiner-collector, the collector or an entity within the collector's appropriate corporate family must own and operate a crude refinery in Canada."

J. Horgan: I do thank the minister. I listened to his second reading debate. I read his second reading debate. I've read the bill. I've listened to his note from his able staff, and I'm still no further ahead.

Again, I'm wondering if the minister could try. For those at home who are riveted to the television at this point in time, Ellen is not starting for another five minutes. Perhaps he could give us an answer as to why we need a new category of refiner-collector. What motivated this policy change to create a new class of tax collector?

Hon. C. Hansen: I'm going to try. This change of wording to provide this new class does not change the treatment. What it does is give more clarity to who is eligible for this particular class of collector. The existing exemption from security for sales between collectors that both own and operate refineries in Canada was too narrow to include all of the major oil companies doing business in British Columbia due to the complexity of their corporate structures.

The exemption continues the longstanding tax treatment of sales between eligible collectors provided under the Motor Fuel Tax Act to maintain consistency between the two acts. What it is trying to do is confirm the existing practice but give more clarity and more certainty to who is actually eligible for this provision.

I do then want to ask: if this is just clarification, then there won't be a net increase in the number of collectors, whether they be collectors or refiner-collectors. Will that number remain more or less constant?

J. Horgan: I'm wondering if the minister could assist me. The explanatory note in the bill says that this will expand "the regulation making power with respect to appeals related to exempt fuel retailer permits so that the director's decision to set or change the percentage of fuel the exempt fuel retailer may buy without paying security or the decision to refuse to change that percentage may be appealed as intended." Could he explain that clause?

Hon. C. Hansen: This change pertains to the exempt fuel retailer program that allows retail dealers on first nation reserves to purchase a percentage of their fuel without paying security. In recognition of that, a percentage of their sales will be to persons who are exempt from the tax under section 87 of the Indian Act. What this change recognizes is that there should be the same kind of appeal process that would allow for an appeal to the minister in certain circumstances as would be provided in other cases.

This is basically about making sure that the appeal powers and opportunities are consistent with other aspects of the act involving the payment of securities.

J. Horgan: I wouldn't be doing my due diligence if I let section 32 pass, particularly section 32(a)(a): "a distillate of crude oil that has a viscosity of not greater than 14 centistokes at 50°C."

I'm wondering if the minister could enlighten us on what the differentiation would be if it were 15 or 16 centistokes or 49 or 51 centigrade.

Hon. C. Hansen: When the member asked if I could explain, my first impulse was to stand up and give the honest answer of no. But with the help of staff, I now am more enlightened.

Basically, this is the industry standard that differentiates light fuel oil from heavy oil. So it is this viscosity standard that the industry uses to make that differentiation.

J. Horgan: Of course, I knew that was the right answer. Minister, well done.

But it's the differentiation, I think — for those that aren't able to follow at home with access to the Carbon Tax Act, the Motor Fuel Tax Act and now these amendments. In general terms, you're creating new classes and new measurements. Or are these just confirming in-statute measurements that are already in existence with respect to the tax?

Hon. C. Hansen: In terms of issues around the viscosity, that does not change. That is the industry standard. This change that is here before us simply recognizes the fact that renewable biofuels are now part of what could be classified as light fuel oil. But in terms of the viscosity standards, that applies to the light fuel oil definition regardless of whether it's from a fossil base or from a biofuel base.

J. Horgan: Further, in the explanatory note there's reference…. We could have touched on this in an earlier section, but I thought I'd try and do these both at the same time. It's the elimination of distinction between raw natural gas and marketable natural gas.

I'm sure you've got a note there on that question. I'm wondering if you could enlighten members of the Legislature on what the distinction is and why the change was made.

Hon. C. Hansen: Basically, raw natural gas is unprocessed gas. In British Columbia there is very little difference between raw natural gas and market natural gas, so the distinction was felt to be unnecessary. Therefore, we are simply streamlining those provisions of the legislation to reflect simply natural gas, whether it's raw or otherwise.

J. Horgan: So absent the passage of this section, there would be no impact on the carbon tax?

J. Horgan: I'm hopeful that the minister…. Again, I'm having to refer to his remarks during second reading debate, and it's specifically with respect to aviation fuel.

It may be that the table in schedule 1, or section 34, is the right place for this question, but during the debate at second reading, the minister said: "Other exemptions to the Carbon Tax Act clarify the exemption for fuel brought into British Columbia in a supply tank of a non-commercial aircraft or ship to restrict it to craft used solely for personal use. Separate rules are provided for commercial aircraft and ships to ensure that their domestic emissions are subject to carbon tax as intended."

I'm wondering if, in making those comments at second reading, the minister was referring to section 33 or 34.

Hon. C. Hansen: It was actually with regard to section 22, but with the indulgence of the Chair, I will certainly speak to it, if the member wishes.

What we had initially was a definition of a non-commercial aircraft or ship, which means an aircraft or ship that was "not used to" — so it's in the negative — "(a) transport goods for members of the public, (b) transport members of the public, or (c) provide a service to members of the public for a fee."

We felt that what would actually accomplish what was intended would be to simplify that and to say that a "non-commercial aircraft or ship" means an aircraft that is used solely for personal use.

Just as an example, it was never the intent that we would be exempting the application of the carbon tax from a corporate jet. But if you look at the previous definition, it was debatable. What we have done with this is make it very clear that that exemption applies solely for personal use.

J. Horgan: I think that's exactly what I wanted to hear. But there is an exemption for personal use. If I were to leave Langford international airport and fly to Blaine and fill up and come back, the fuel in that storage tank would be exempt. But if I flew down in the member for Juan de Fuca corporate jet, the fuel would not be exempt. Is that what the minister said?

If I went down on my own just for a day of shopping, filled up my tank and flew back, that fuel is exempt? If I went down for business purposes or on a corporate jet that I was writing off for whatever reason, that fuel is subject to the tax?

Hon. C. Hansen: I'm glad to hear that the member for Juan de Fuca has a personal jet. I know he's….

It's much the same application as a motor vehicle. If you take your personal motor vehicle down to the U.S. and fill up with gas, and you're coming back, we're not going to measure how much gas is in the tank and apply a carbon tax to it. In much the same way, if he is flying on a corporate jet down to Washington State and back, that is going to be assessed, and a carbon tax is going to be assessed based on the fuel that is brought back into Canada.

If he was flying down to the U.S. in his personal aircraft, if it was strictly personal use…. I guess the difference would be that if he went down on a personal trip, using a corporate aircraft, then there would be lots of other issues that tax auditors would want to talk to him about in terms of a taxable benefit that he would be receiving from the use of a corporate aircraft for personal purposes.

What this is meant to capture is simply the personal use of a private aircraft that an individual might own.

J. Horgan: Thank you for indulging me on this back-pedalling, but I think this is an important point. It's an issue that I certainly heard on the doorstep during the election campaign — not about my use of my corporate jet. It was the implementation of the carbon tax with respect to aviation fuel pending on whether the flight originated and terminated within the boundaries of British Columbia or whether it originated south of the border or some other jurisdiction with a dropping-off, picking-up point in Vancouver and going beyond that.

I'm wondering if this was in any way attempting to clarify concerns that British Columbians had about the uneven implementation of the carbon tax on aviation fuel as it pertained to domestic flights versus international flights.

Hon. C. Hansen: The purpose of this is really just to make sure that the definitions and the application of the tax are clear. I think that what we do with this amendment is actually to, on one hand, simplify it, but also to make it much clearer and much easier to administer.

J. Horgan: It didn't really get to where I wanted to go, but I'm ten sections away from where it was anyway. I'll just it try one more time, and hopefully the minister with his staff will be able to help me.

A concern has been raised with me as critic with respect to the implementation of the carbon tax on aviation fuel for flights that did not originate in British Columbia. A flight from Calgary to Vancouver — at what point is the carbon tax imposed on that flight? If there's no fill-up in Vancouver, is there no carbon tax? Or do they go back to Calgary, fill up and then fly back again?

If they spend the whole day going back and forth between Vancouver and Calgary, ten flights in a day, if there's no fill-up in Vancouver, there's no carbon tax. Is that correct?

Hon. C. Hansen: That would be correct. We do not have jurisdiction that would actually apply to flights that are going outside of the province of British Columbia or coming in. That would be the federal government. Therefore, we've extended the tax to the extent of our jurisdiction and our ability to do so.

J. Horgan: Then that brings me back to the language in that section and your references at second reading, which are that you're trying with this amendment to extend to the greatest extent possible the province's ability to tax the use of that aviation fuel — if its destination is somewhere else and the return point is British Columbia.

So you're not dipping tanks to see, if I go down on my jet, whether I'm using fuel or I'm purchasing it and coming back and forth. You're trying to extend it, to the greatest extent possible, to capture non-commercial, commercial and corporate at the same time. That's the intent of the section?

J. Horgan: This is the interesting part, for those who have a copy of the bill. This is the challenge the minister had, and I listened, as I said, carefully to his comments. I read them again, and we had a discussion off line.

Just for the record, could the minister again confirm that with respect to blended fuels, the attempt here with this table is to best reflect the actual impact of the fuel in terms of its GHGs and tax it accordingly?

Hon. C. Hansen: I know that when the member referenced this earlier, he referenced the fact that he and I had had a conversation a week and a half ago. He thought that now that I had the benefit of a staff here, I might be able to give him an answer that actually reflects that I might know what I'm talking about — right?

If the member looks at what the tax rate is for the carbon tax on gasoline and light fuel oil, what this change does is reflect the fact that 5 percent of gasoline and 5 percent of light fuel oil must be a biofuel.

Therefore, instead of having what is currently the case — biofuels being 100 percent exempt and fossil-based fuels being 100 percent taxable under the carbon tax — this is to reflect the fact that 95 percent of that fuel will be fossil-based. Therefore, it is 95 percent of the previous tax rate that will be applied in each — the gasoline category and the light fuel category.

J. Horgan: I appreciate that. That was as good an answer as I got last time. So staff, you weren't needed for that one. You did a good job getting him ready for that.

On the table or the chart that is provided in section 34, item 2 and item 6 are the two that the minister referred to. Those are the two that are requiring a blended percentage by January 1, 2010.

I'm wondering, with respect to some of the other fuels on the list…. I see that for naphtha there's no change. I see that in all other categories there's no change. Is there any intention to see about blending in any other way? Obviously, jet fuel is a bit tougher. But has there been discussion within the ministry and within the Ministry of Energy and Mines to see what we can do about using peanut oil on WestJet flights?

Hon. C. Hansen: In terms of the gasoline and the light fuel oil, that is technically sound for the blending to be done. It may be that in the future, there might be some of these other fuels that could be blended with biofuels as well. We would have to deal with that when the time comes, but the opportunities that we have today for blending with biofuels involve only gasoline and light fuel oil on a commercial basis.

B. Ralston: I understand this measure will cost approximately $173 million a year. I'm wondering if the minister could just advise: what's the anticipated takeup by single taxpayers? The other category is taxpayers claiming a spouse or equivalent to spousal credit. So how many individual taxpayers? How many in the other category?

Hon. C. Hansen: There are about two million British Columbia tax-filers that will benefit from this measure. About 200,000 of those would be considered as equivalent to the spousal category.

B. Ralston: As I understand this section, it sets the exemption at $11,000 exactly for this year, and then the ordinary indexing would start the following tax year. Is that correct?

B. Ralston: This is the flow-through mining tax credit. Can the minister give an idea of the number of individual tax-filers who are anticipated or projected to benefit from this particular program?

Hon. C. Hansen: I do not have that information with us here in the chamber, but I will get that information for the member and provide it to him.

B. Ralston: This is increasing the amount of the basic training tax credit for an eligible employer. I'm wondering, again, if the minister could give some idea of present takeup of the program as it exists now and then of the anticipated takeup with the proposed increase in this section.

Hon. C. Hansen: In terms of apprentices, to date, including returns processed up till July 31 of 2009, there are 11,720 claims that have been processed for individual apprentices. For the employer side, it is 2,105.

I would also like the answer in terms of cost to the treasury. I'm told that when the credit was first introduced in 2007, the anticipated cost was $30 million a year. I believe the takeup was such that it was only $20 million a year by the 2008-09 fiscal year. I'm wondering if there has been any analysis done as to why the takeup was less than anticipated. Any thoughts the minister might have about, given the increase, whether there'll be increased takeup?

Hon. C. Hansen: Certainly in terms of the individual apprentices, that is actually hitting our targets that we had anticipated when the program rolled out. In terms of the corporate side, it has not ramped up as fast as we would have anticipated. But we also have to keep in mind that corporations are typically, first of all, filing 12 months a year. They're also filing much later, so we actually see the applications for those tax credits coming through quite a bit later than they would come through for individuals.

B. Ralston: I understand that the amounts are higher for first nations apprentices. Do you have any statistics on the takeup in that category?

Hon. C. Hansen: It is true — what the member says. The takeup is higher for first nations. I don't have that breakout with me today.

J. Horgan: Now, Minister, we're at the portion of the act where we're amending the Motor Fuel Tax Act, section 1, "Definitions." I did want to go through this just to ensure that the bulk of the changes to the Motor Fuel Act are consequential amendments as a result of changes to the carbon tax. Just stop me at any point if you think there's something I need to know.

On repealing the definition of "alcohol based fuel" with "biofuel," is there any rationale beyond a clearer definition?

Hon. C. Hansen: This basically reflects the fact that if a fuel is at least 85 percent ethanol, it is in fact a gasoline. That is reflected elsewhere. This basically just clarifies the definition in terms of biofuel. So it is for clarity, but there's no substantive change.

J. Horgan: Well, in the definitions section of the Motor Fuel Tax Act, we have "alcohol based fuels" as a single definition, and now we're adding "biodiesel" and "hydrogenated-derived renewable diesel fuel" and "methanol based" as well as "renewable diesel fuel." Are those additions to the definitions?

Hon. C. Hansen: These changes are to reflect what is now becoming commonly used in terms of terminologies but also to reflect some of the new fuels that are coming onto the market today. This is really a case of just trying to make sure that the legislation is kept as modern as possible.

J. Horgan: That makes good sense to me, with the exception of one of the definitions. The definition of "coloured fuel" is amended by deleting the reference to alcohol-based fuel and replacing it with references to methanol-based fuel and fuel that is 85 percent ethanol.

There isn't, as I could find, a reasonable definition of coloured fuel in the previous act. Oh, there it is. Okay. It speaks to dyed fuels that are usually sold to those that are using it for farming purposes and so on. I don't see why an amendment would be required there.

Hon. C. Hansen: Earlier what we did was delete the definition for alcohol-based fuel. So now we've got to change this sentence that references alcohol-based fuel, because there is no longer a definition for it. What we had done previously is provide for…. This actually adds clarity that it is the methanol-based fuels that would apply in this case. The purpose of this change is really to reflect the fact that we're eliminating the reference to alcohol-based fuel in the act.

J. Horgan: Well, again, if we're deleting references in the Motor Fuel Tax Act that make reference as follows: "'coloured fuel' means (a) fuel dyed in accordance with the regulations, and…(c) alcohol based," I understand the alcohol-based component. That's changed in the Motor Fuel Tax Act because it's been changed elsewhere. But where is the reference to fuel dyed? Does that remain? Under the existing act, "'coloured fuel' means…." Does the (a) still apply?

J. Horgan: So the (c) is the amendment, just for clarity. The fuel remains coloured, and the (c) is to further explain what "alcohol based" is.

J. Horgan: I'm assuming that these are consequential amendments to clarify the "collector" and the "refiner collector" that we talked about in earlier sections?

J. Horgan: I don't believe that this would be a consequential amendment. Again, under the definitions in the section's explanatory notes, section 49 is an amendment to former section 37 that says: "…provides that a registered consumer certificate issued under the Act may be suspended or cancelled if the person does not provide a collection bond as required by the director." I'm wondering why it is that we're only now coming to a point where we would suspend or cancel a certificate without a bond?

Hon. C. Hansen: The previous provision that was there was that the certificate could be revoked "if the registered consumer refuses or neglects to comply with (i) a provision of this Act or the regulations."

It was felt that that should be adequate in terms of being able to revoke a certificate if the depositing of a bond was not provided. But there have been some questions that have come up whether or not that provision is solid enough, so just for greater certainty, this amendment is being added to make it absolutely clear that a certificate can be revoked in these circumstances.

J. Horgan: So the sections that we've just reviewed are pertaining to collection, and now we're at the point where there's a consequence. Perhaps the minister can also, as we move from 49 to 50, 51 and 52, where there is an appeal right restored….

I know, hon. Chair, you want to go through these one at a time, but I just want to foreshadow for the minister that these four sections, 50 through 52…. I'm sure they're housekeeping, but I'm concerned that we have….

I've been here five years now, and there's been no attempt to amend the Motor Fuel Tax Act. I don't recall it being amended anytime in the past ten years, so what was the rationale for this? Was there a case that led staff to recommend this change? Is there a precedent or a hole that you want to close with this?

Hon. C. Hansen: These amendments flow, basically, from the introduction of the carbon tax and the Carbon Tax Act. We wanted to make sure there was consistency in the wording in the Carbon Tax Act and the Motor Fuel Tax Act, so many of these amendments that are in these sections are housekeeping, to the extent that we are trying to make sure there are parallel powers and parallel opportunities for appeal in the two pieces of legislation.

Basically, these are issues that have come up, I guess, really, with a new light being focused on this area as a result of the introduction of the carbon tax, and it was felt that these new powers to ensure compliance and provide for appeal were appropriate to be introduced. But they are primarily housekeeping.

J. Horgan: That's a reasonable response from the minister in terms of consequence. I assume that when we get to section 52 — and I apologize to the Chair — we're restoring a right to appeal.

If we're imposing new consequences and also reaffirming a right to appeal…. I don't know. When was that right to appeal lost? Or is it that the shining of light, as the minister suggests, on this area of tax policy as a result of the carbon tax is just an opportunity to affirm rights to users and affirm consequences on behalf of the Crown?

Hon. C. Hansen: In 2008 what changed was the manner in which restricted collectors were appointed. In doing so, the appeal rights were eliminated. We felt it was appropriate that those appeal rights be in place, and therefore, we want to make it clear with these changes that those appeal rights are in fact there.

J. Horgan: I thank the minister for following the bouncing ball with me today. You've opened up an obvious question. In 2008 how were these rights to appeal removed?

Hon. C. Hansen: The appeal right that existed previously applied to a collector who was someone who was producing or importing fuel. What happened in 2008 was the distinction between those who imported or manufactured fuel versus those who were relabelling fuel. In the process of those amendments, we left those who were relabelling fuel without an appeal mechanism. What this does is actually makes certain that the appeal mechanism is there for all of the above.

J. Horgan: Again, in the explanatory notes, section 56 amends section 71 of the Motor Fuel Act, and it says, as follows: "expands regulation making powers with respect to appeals related to exempt fuel retailer permits and with respect to alternative motor fuel."

Hon. C. Hansen: This parallels exactly the provisions that we amended earlier in the Carbon Tax Act as well. This, again, is to allow for the exempt fuel retailer program, which allows retail dealers on first nations reserves to purchase a percentage of their fuel without paying security, in recognition that only a percentage of their sales would be subject to that tax.

J. Horgan: I thank the minister for that answer. Now, this is specific to first nations reserves. Is that correct?

J. Horgan: So then there is an appeal period that's retroactive to September 2, the date the budget was tabled, provided it's made before December 31, 2009. What steps are the ministry or government officials taking to inform those on reserve who may have an opportunity to appeal, that that right exists for the next couple of months?

Hon. C. Hansen: We have contact information for all of the first nations reserves that are retailing gas or fuels on reserve. We're quite confident that a notice has already gone out. If not, it would be going out very soon, but we're pretty sure it already has.

J. Horgan: Obviously the staff would be able to do that in short order, but if there is a reserve or a seller who is not informed of the rights that are provided in this section, is there any recourse for those individuals or those sellers after December 31, 2009?

Hon. C. Hansen: This provision does not negate the opportunity for appeal after December 31. All it does is it says that this can be retroactive to September 2 if the regulation is made prior to December 31 of this year. But the opportunity to appeal that this provides for is going forward and does not expire.

B. Ralston: This section amends the Social Service Tax Act to clarify tax treatment of leased tangible personal property. Did this arise as a result of an internal review or litigation? I'm just wondering what was the reason and the purpose of this amendment.

B. Ralston: This section makes changes to the Pharmacists, Pharmacy Operations and Drug Scheduling Act, now repealed, to a reference to the Pharmacy Operations and Drug Scheduling Act. Again, can the minister explain what is the purpose of this section and the amendments contained therein?

Hon. C. Hansen: This is a consequential amendment. There were amendments to the act that changed the title of the act. Therefore, we felt it was more appropriate, rather than naming the specific act, that we would provide for drugs or vaccines to be exempt, as prescribed by regulation.

Hon. C. Hansen: I move that the committee rise and report the bill complete without amendment.

Bill 2, Budget Measures Implementation Act (No. 2), 2009, reported complete without amendment, read a third time and passed.

Hon. G. Abbott: I call committee stage debate on Bill 5, intituled Finance Statutes Amendment Act, 2009.

The House in Committee of the Whole (Section B) on Bill 5; L. Reid in the chair.

B. Ralston: Section 1 amends section 399.2 of the Business Corporations Act, and that appears to be a section that's directed to the power of the Lieutenant-Governor-in-Council concerning regulations. This subsection would be repealing section (2)(h) and makes reference to "in respect of foreign entities from a designated province" and, in this section (iii), "in respect of foreign entities from a designated province that are registered as extraprovincial companies."

Can the minister, then, explain the purpose of this amendment to the regulation powers?

Hon. C. Hansen: This change is to reflect the relationship that we have with the province of Alberta, where we are establishing a common business incorporation procedure where if you're registered in one province, you would be automatically registered as a company in the other province.

In addition to that, any necessary filings, whether it's changes towards a director, or annual reports…. If they are filed in one province, they would be deemed to be filed in the other province.

So this particular amendment — that is, to section 399.2 — is basically a consequence of some of those. This is needed to ensure regulatory consistency with the other provisions and also to ensure that there is consistency with what's in place in the province of Alberta. The reason it doesn't identify Alberta specifically is that we believe there are other provinces in the future that may wish to sign on to this common business incorporation model.

B. Ralston: The minister has spoken of the desire to have a legislative parity between the two provinces in respect of these provisions. Has the province of Alberta already passed the enabling legislation that matches this, or is that to come following passage here?

Hon. C. Hansen: I'm not sure exactly where Alberta is in their changes. In some cases, we are making changes to be consistent with what Alberta already has in place. In other cases, they would be changing legislation to bring theirs in line with what we have, depending on who has the more appropriate provisions. In some cases, both provinces are changing their requirements. But I don't have the information as to exactly where Alberta is in this particular measure that's in this section.

B. Ralston: The reference that's made in this section is to "foreign entities." Is that a broad term that applies to any measure of business enterprise or cooperative enterprise? The formulation is quite specific, and it's distinguished from "extraprovincial company" in the same phrase. I'm just wondering: what is the definition of a foreign entity in this section?

Hon. C. Hansen: It would be my understanding that it would be a company that would be based neither in British Columbia nor, in this case, Alberta, but in fact would be registered as an extraprovincial company within the other province. In the context of the B.C.–Alberta agreement, in this case, it would be Alberta.

The province makes money from the corporate registry in the sense that when you register a company, you have to pay a fee. How does that work in terms of revenue? If registration is in one province, it automatically has you registered in a second province. Is there a revenue-sharing agreement, or does it just depend which province you choose to make the initial application in, and then that determines who gets the revenue?

Is there any agreement, just to follow that up, on parity in terms of fees in order to, I suppose, dissuade people from heading to the jurisdiction where the fee is less?

Hon. C. Hansen: There is an effort to try to ensure that there is consistency between the two jurisdictions with regard to fees. It's my understanding that the province in which the application is made is the province that would collect and retain the fee.

B. Ralston: I appreciate that. That's probably easier for administrative convenience.

Is it thought that there will be any significant revenue impact, given…? Relative preferences of corporate lawyers, I suppose, would be the determining factor. Is there any anticipated revenue loss over what's received now for this kind of service?

Hon. C. Hansen: There would be some revenue impact, but we anticipate it would be minimal. What this will facilitate is greater flexibility on the part of companies registered in one jurisdiction to actually do business in the other jurisdiction. We anticipate that this will lead to increased interprovincial activity rather than simply….

We expect that the size of the number of companies that will want to operate in the other jurisdiction will increase significantly over what is currently happening and that the revenue impact, therefore, would be quite minimal.

B. Ralston: Obviously, this follows the broader legislative scheme. Can the minister advise if there's an actual demand for it, or is it simply expected that if these provisions are enacted, there will be a response, but there's no assessment at this stage of what the likely demand might be for this?

Hon. C. Hansen: Certainly, it's there anecdotally. Particularly if you visit some of the communities on the B.C.–Alberta border, the ease at which those companies can actually do business in the other province would be greatly enhanced by this. It reduces the amount of paperwork; it reduces costs. In many cases, you will wind up with B.C. companies.

I have received some stories anecdotally of companies that would love to be able to bid on a tender, for example, at the municipal level in Alberta. Yet they realize that in order to do so, they would have to go through all of the extra paperwork and cost and time it would take to register in the other province.

This actually simplifies it. If they're registered in British Columbia, they have the ability to do business in Alberta without having a separate and additional company registration requirement.

B. Ralston: Is there any impact in terms of provincial corporate income tax or small business income tax based on the choice to register in one jurisdiction or in another?

Hon. C. Hansen: No. Nothing would change in that regard. If a company is doing business in the other province, they would be subject to all of the taxes that would be imposed by the other province.

B. Ralston: These are amendments to what's called the Business Number Act. The present section 5 is to be repealed and a new one substituted. The changes appear to be minor. Perhaps the minister could just explain what the Business Number Act does and why this amendment is necessary to section 5.

Hon. C. Hansen: The amendment is very minor. The current wording of this section is: "If a business entity provides a public body with information under a designated enactment, the public body may require," etc. What this does is it simply adds a subsection (b), so it will add "or supplies or intends to supply goods or services to a public body."

Basically, it is quite minor. I'll read the explanation for the amendment, if that might help the member. "If a business entity supplies or intends to supply goods or services to a public body, this section provides the minister with the authority to collect a business information number to authenticate the identity of the business through the business number database prior to entering into a supplier contract with them."

So I guess the most important part is the fact that this company supplies or intends to supply goods or services to a public body.

B. Ralston: Who maintains the Business Number Act registry? I think I took the minister to be saying that. Is that something maintained by the Ministry of Finance?

B. Ralston: The addition of "or intends to" presumably means that the information can then…. It creates an obligation to supply this information in advance of making a sale to a public body, whereas previously, without that phrase, you'd only be able to, I think, collect it legally after the sale had been completed. Is that the purpose of it?

Hon. C. Hansen: That's correct. So this would actually allow us to collect a business number or to require a business number to be submitted as part of, say, a tendering process rather than waiting until the contract has actually been granted and the company providing those goods and services has been accepted as a supplier and starts the process of supplying goods or services. This actually allows us to collect that number in advance of that.

B. Ralston: Then is this part of the further due diligence in terms of a review of a prospective supplier to the purchasing? I don't know whether it's the purchasing commission or an individual ministry that wants to buy a service or goods from a supplier. Is that the purpose, then — to just make the due diligence that much easier?

Hon. C. Hansen: Yes. Essentially, the Business Number Act is meant to simplify in terms of a variety of supplier information that was gathered in the past. This allows for simplification of that. It would, with this provision, actually give the ability for government systems to be able to identify if this company had previously been a supplier, for example, before a decision is made to let a particular contract.

B. Ralston: I take it by the reference to business number that that's a unique number, obviously, within the government database and would be readily identifiable and, therefore, would facilitate not only the making of the contract but tracking payments, tracking collection and any other aspects of the contract that were to be administered along the way. Is that a fair summary?

B. Ralston: This is a proposed amendment to the Cooperative Association Act, and it seems to be similar to the proposed amendment that was in section 1 under the Business Corporations Act because there are similar references to extraprovincial corporations from a designated province. So is that expanding the powers of this act to authorize similar regulations? Is that correct?

Hon. C. Hansen: Yes. That's correct. It's for consistency between the two acts.

B. Ralston: Looking at section 9, this is an amendment to the Financial Institutions Act. It amends the definition of "insurance business," as I understand it. Can the minister explain the reason for that amendment?

Hon. C. Hansen: If I can share with the member the reasons for this amendment. It says that the words "the business of" in the definition of "insurance business" are removed because that language is not consistent with the 1998 amendment to the definition to capture insurance offered on a non-profit basis.

The wording also causes difficulties in enforcement because the regulator must not only prove that insurance activities are taking place but that the persons are in the business of providing the activities, which may be difficult in some circumstances. This also allows us to be consistent with the wording of legislation in Alberta as well.

B. Ralston: The minister knows, of course, that there's a new insurance act before the House, which we will probably deal with in due course. Are these definitions then consistent with the new insurance act, or is there any necessity that they be consistent?

B. Ralston: These amendments also make reference to the insurance of risks in British Columbia by insurers outside the province. Can the minister explain what's required of insurers outside the province that this amendment might help facilitate?

Hon. C. Hansen: This subsection (5) that is being added is to address concerns about regulatory gaps that may exist. Changes to the federal Insurance Companies Act, which have been enacted but are not yet in force, will narrow federal requirements. Our concern is that this may allow some companies that insure risk in British Columbia to withdraw from both federal and British Columbia regulation.

The change means that insurers insuring a risk or peril in British Columbia will be required to obtain a business authorization under the FIA unless an exemption is available. Again, this exists in line with similar requirements they have in Alberta.

B. Ralston: So is it meant, then, to capture the operations of federally chartered insurance companies that would be insuring risks in British Columbia? I would be surprised if that was a regulatory gap. Surely that had been contemplated before.

Hon. C. Hansen: This is where you would have a company that is based outside of British Columbia and operating outside of British Columbia, but they are insuring a risk in British Columbia. So what this does is make it clear that those companies must require a business authorization under FIA.

B. Ralston: This might be one of those cases where an example is helpful. Insuring a risk suggests to me that…. It's implying that the contract of insurance is drawn and executed in another province, that all the business operations concerning the contract of insurance are executed in another jurisdiction, yet the risk is located in business operations — say you have a mine or something like that.

You're running a mine, and you're insuring against a collapse of the mine or a death or injury on the mine site. The head office of the company is in Toronto. The office of the insurance company is in Toronto. The office of the insurer is in Toronto. The entire transaction takes place in Ontario, yet the risk is located here. Is that the kind of circumstance that this is designed to deal with?

Hon. C. Hansen: Yes. That's probably not a bad example. There has been a case, actually, that triggered this change. It wasn't involving the mining industry. But certainly, this amendment is not being brought forward in abstract. There have been actual incidents in British Columbia that we felt needed to be addressed.

B. Ralston: I don't want to pursue this much longer, but I'm just interested in…. The minister, in the initial explanation that was provided, spoke of a regulatory gap that might arise by changes in, I think it was, the federal insurance act. I'm still not clear what that gap might be, so I'm wondering if the minister could perhaps offer that explanation again or perhaps offer it in a different way.

Hon. C. Hansen: What the changes in the federal legislation will do is narrow the federal requirements. Once that is enacted, we would need provisions in our own legislation to deal with circumstances like this, because the existing federal provisions are much broader and would actually allow for us to deal with circumstances where an external company is insuring risk within the province of British Columbia. Given that the federal act may no longer provide us with that vehicle, we felt it was important for us to have our own legislative provisions.

B. Ralston: Perhaps again, then…. Just to follow that briefly, can the minister then explain why the federal jurisdiction would be retreating or receding and requiring provincial legislative intervention? It doesn't seem a terribly efficient way to operate.

If the federal government has occupied the field, and they're retreating, then necessitating a chain of similar amendments in the provinces across the country doesn't seem very efficient as a form of federal-provincial cooperation as a way to proceed. Can the minister offer any comment on that?

Hon. C. Hansen: I don't think the federal government would define it quite the same way the member has, in that the legislative changes that they are making they feel, obviously, are appropriate for their jurisdiction. That has consequences for us and perhaps creates a gap that we feel needs to be filled. These amendments would fill that.

B. Ralston: This section amends section 76 of the Financial Institutions Act, and it refers to those carrying on the insurance business. Can the minister explain the repeal of paragraph (c) and the proposed amendments (c), (d) and (e)?

Hon. C. Hansen: Again, this change is triggered by changes to the federal Insurance Corporation Act. With those changes it is expected that there will be more insurers which seek to offer insurance in Canada without being licensed. These proposed amendments, therefore, establish a framework in which insurance may be provided by unlicensed insurers through properly licensed insurance agents.

Hon. C. Hansen: Noting the hour, I move that the committee rise, report progress and ask leave to sit again.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

Committee of Supply (Section A), having reported progress, was granted leave to sit again.

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