2010 Legislative Session: Second Session, 39th Parliament
The following electronic version is for informational purposes only.
The printed version remains the official version.
official report of
Debates of the Legislative Assembly
Tuesday, March 23, 2010
Volume 12, Number 2
Introductions by Members
Gurdev Singh Grewal
Hon. M. de Jong
Hon. G. Campbell
Introductions by Members
Statements (Standing Order 25B)
Quesnel and District Chamber of Commerce
Brain health and Alzheimer's disease awareness
North Island protocol agreement between First Nations and local government
Fundraising auction for Haiti by Fraser Valley farmers
J. van Dongen
Elimination of racial discrimination
Ridge Meadows Chamber of Commerce
Dental program for low-income children
Hon. M. de Jong
Funding for community social services worker pension plans
Hon. C. Hansen
First Nations consultation on Enbridge oil pipeline proposal
Hon. G. Abbott
Hon. G. Campbell
Public release of budget documents
Hon. C. Hansen
Impact of harmonized sales tax on membership costs
Hon. C. Hansen
Funding for retraining programs for forest workers
Hon. M. Coell
Burnaby school district costs and funding
Hon. M. MacDiarmid
Orders of the Day
Committee of the Whole House
Bill 2 — Budget Measures Implementation Act, 2010 (continued)
Hon. S. Bond
Hon. C. Hansen
Hon. R. Coleman
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Citizens' Services (continued)
Hon. B. Stewart
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TUESDAY, MARCH 23, 2010
The House met at 1:36 p.m.
[Mr. Speaker in the chair.]
Introductions by Members
L. Reid: We're joined in the gallery today by Dr. May Tee. She was born in the Lower Mainland and currently resides in Richmond East. She received her bachelor's and her master's degrees from the University of British Columbia. On receiving her MD in 2008, she began her residency in general surgery.
She is this year's president of PAR-BC, which is the Professional Association of Residents of British Columbia, who advocate on behalf of the best training possible for the future physicians of this province.
I would ask the House to please make her welcome.
M. Mungall: Today in the House we have Dino Falcone. He's a constable with the Nelson police department. He's here with the B.C. Police Association this week, speaking with members on both sides of the House.
May the House please make him welcome.
Hon. S. Bond: We're delighted to welcome a very special person to the legislative gallery today. She is a faithful watcher of the question period process. In fact, she has told me that she actually encourages us and prays for all of us, and Lord knows, we need it. I would like us all to make very welcome Mrs. Ione Robinson, who is visiting today with Tim Schindel.
R. Cantelon: I'd like the House to welcome Ron and Connie Adamson, old friends from Nanaimo. They were supporters of the Port Theatre, and they're also celebrating their anniversary. So let's give them an anniversary welcome.
D. Barnett: Today in the House I would ask that you welcome Chief Joe Alphonse of the Tl'etinqox-t'in national government. Along with our chief, we have Juan Cereño, who is with the Tl'etinqox-t'in national government as a health director. I ask you all to welcome them here today.
GURDEV SINGH GREWAL
D. Hayer: A very prominent member of our community, Gurdev Singh Grewal, passed away last Sunday, March 21. He was 87 years old. He was a veteran of the Second World War who served in Burma with the Indian army. He was an active member of the Royal Canadian Legion in Nanaimo and Surrey-Cloverdale for over 29 years.
He was the vice-president of the Ex-Servicemen Society and provided great assistance to veterans within the Indo-Canadian community by providing them with assistance and information on pensions, employment opportunities, language services and discrimination issues.
He helped veterans acquire work throughout the greater Vancouver area. He participated in all parades and Remembrance Day ceremonies. He was very active in the community at workshops, striving to promote dialogue and dispute resolution. As a result of his lobbying effort, he succeeded in getting the city of Surrey council to establish a seniors centre in the Bear Creek community park.
Mr. Grewal was a true mentor. He made Surrey a better place to live and helped improve the quality of life for seniors and veterans. His funeral service will be held on March 27, 2010, at Five Rivers funeral home. He is survived by his wife, Surjit Kaur, three daughters, three sons-in-law, nine grandchildren and five great-grandchildren. If anybody is available, please come and join us.
I just want to thank his family and recognize all the work he did to make British Columbia, this province, a better place to live.
Hon. M. de Jong: Occasionally in this chamber we recognize birthdays — sometimes infants, sometimes the very young, frequently those amongst us — but we rarely get an opportunity to honour someone who has joined the ranks of the octogenarians in our society.
Such a person is amongst us. Though the years have passed, his backhand volley and serve have not withered. He is the longest-serving Table Officer in the British Commonwealth of Nations. He is George MacMinn, QC. On the weekend, I am told, he turned 80 years of age, and that I think is befitting a musical tribute.
I invite all members to join me in singing.
[The members sang Happy Birthday.]
Hon. G. Campbell: I can say that's the first time I've actually seen the Clerk smile in this House. I'm glad to see that, Mr. Clerk. You held the proper decorum throughout. Congratulations.
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Introductions by Members
Hon. G. Campbell: I'd also like to inform the House that I am now the proud grandfather of Sydney Roy Campbell, born just last week. He's got a brother, Jimmy Mitch, and I think it's going to be a great time for all of us. I hope we'll make him welcome.
Maybe someday he'll be the Clerk, Mr. Clerk.
(Standing Order 25B)
QUESNEL AND DISTRICT
CHAMBER OF COMMERCE
B. Simpson: This year marks the 100th anniversary of the Quesnel and District Chamber of Commerce. For the past 100 years the chamber has not only worked hard to support business growth in Quesnel; it has also played a critical role in the development of the region as a whole.
Immediately upon the founding in 1910, the chamber took on the task of attracting a doctor to Quesnel and setting up a hospital. The current hospital, G.R. Baker Memorial, is a standing testament to that first physician and a lasting legacy of the chamber's early success as a community advocate.
Five years later, in 1915, the Quesnel Cariboo Observer newspaper reported that in just one year, the chamber of commerce, then known as the board of trade, had increased police protection; obtained a promise from the government that a permanent bridge over the Fraser River would be built; employed a night watchman for the summer months; acquired the location of the fire station; regulated speed limits; enforced the pound bylaw, resulting in a cleaner and safer Quesnel; and completed a number of other projects which improved the quality of life for residents in Quesnel and the district.
If the chamber accomplished all that in one year, imagine the impact it has had over the last hundred.
In 1967 the Quesnel Board of Trade officially became the Quesnel and District Chamber of Commerce and that year was awarded Gavel of the Year for outstanding activity in all categories.
Now chamber president Darlene Osborne, her board and the chamber staff, led by manager Coralee Oakes, are rolling up their sleeves to take on the challenge of the mountain pine beetle's impact on their community. They're committed to developing a positive vision for the Quesnel region based on a realistic appraisal of the challenges confronting one of its traditional backbone industries.
For over 100 years the Quesnel and District Chamber of Commerce has provided outstanding leadership to their community. There is no doubt that they will continue to demonstrate that leadership for the next 100 years. I ask the members of this House to recognize their leadership.
BRAIN HEALTH AND
ALZHEIMER'S DISEASE AWARENESS
L. Reid: Brain Awareness Week was March 15 to 19, 2010. Brain Awareness Week continues the conversation about the latest in brain research and the importance of brain health.
I would like to dedicate my remarks today to all of those who care for individuals who suffer from Alzheimer's. The Alzheimer's Society report, the Rising Tide study, recently updated information on the prevalence of Alzheimer's and related dementias.
The significance of these numbers reinforces the need for British Columbians to learn more about healthy eating and regular exercise. They say that what is good for the heart is also good for brain.
It is also a good time to learn more about the many achievements from our own researchers at the Brain Research Centre at the University of British Columbia. Research is key to uncovering inroads to prevention and possibly discovering a treatment to delay the onset of this disease and, frankly, to reduce its impact.
For more than 25 years the society in B.C. has played an important role in the lives of people with Alzheimer's disease and other types of dementia, their families and their caregivers.
In 1981 a group of caregivers gathered to discuss the challenges of caring for a person diagnosed with Alzheimer's disease. Out of their compassion and determination, the Alzheimer Society of British Columbia was ultimately founded. Their ultimate vision is to create a world without Alzheimer's disease and related dementias. The society does exist to alleviate the personal and social consequences of Alzheimer's disease and related dementias, to promote public awareness and to search for causes and for cures.
When an individual receives a diagnosis of Alzheimer's disease, they are not the only ones who are affected. Dementia can profoundly impact the lives of those closest to the person, including caregivers, family members and friends. These individuals today reside in all our constituencies, and I believe our compassion, our outreach, needs to continue to ensure that caregivers have the support they require.
The Alzheimer Society Resource Centre helps those concerned with or facing dementia to build the knowledge, skills and confidence to maintain quality of life. Resource centres offer information, educational opportunities, support groups and the ability to speak directly with a knowledgable team member. Contacting a resource centre in your area may provide you with those supports as you go forward.
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If you're concerned with memory loss or brain health, get in touch with the Alzheimer Society of British Columbia or go to their website at www.alzheimerbc.org.
NORTH ISLAND PROTOCOL AGREEMENT
BETWEEN FIRST NATIONS
AND LOCAL GOVERNMENT
C. Trevena: Last week I and a couple of my colleagues had the honour to be in attendance at a significant event for the north Island, the signing of the north Island protocol agreement. First Nations and local governments came together to sign the document which, it's hoped, will help both to foster respect and to increase cooperation amongst the neighbouring communities.
The agreement has been a long time coming. It's the result of seven years of community-to-community fora and lengthy discussions between the Winalagalis Treaty Group and the regional district of Mount Waddington. Eight First Nations are among the signatories, along with the regional district and its municipalities.
Mutual recognition and cooperation and the maintenance and strengthening of relationships are at the core of what's being seen by all parties as a living document. It doesn't mean that all the communities will be working hand in hand on every project. Each, naturally, has its own priorities, but it will make working together easier and more natural.
The 'Namgis First Nation and the village of Alert Bay have long had a historic accord, which helps those two communities navigate their close relationships on the small island they share. This protocol will be a guide for all communities.
The signing took place during the B.C. Rural Summit, which was held in Port Hardy last week. It was marked by singing, by drumming and dancing and by the words and the presence of community elders. It's been described as "significant" and "a very proud moment."
The north Island has strong and resilient communities — First Nations who've been in the area for untold generations and those who've been moved to new homes there, towns that have seen the boom and bust and reinvention that resource dependency creates. This protocol should further strengthen all of them by helping them to work through the uncertainties and the opportunities of the future together.
FUNDRAISING AUCTION FOR HAITI
BY FRASER VALLEY FARMERS
J. van Dongen: Two weeks ago Fraser Valley farmers gathered together to support fellow Haitian farmers at this year's Make a Difference auction in Abbotsford. The auction drew donors from around the Fraser Valley, Vancouver Island and the Okanagan. While cattle were the most common donation, cattle-trucking equipment, fishing trips and food were also up for bid.
Everything at the auction was donated, including the McClary Stockyard's auction yard and services. All proceeds from the auction, $90,000 and counting, will be given to the Canadian Foodgrains Bank, which will send the donations to Haiti where they will be used to restore farming activities in the region.
Our B.C. farmers took into account that the planting season in Haiti begins in March. If planting season is missed, no food will be produced for the rest of the year, and food prices are already on the rise.
A regular supply of locally grown food is crucial for Haiti's recovery. The Make a Difference auction will give Haitian farmers the funds necessary to purchase seed, fertilizer and the tools so they can grow badly needed local food for the people of Haiti.
On behalf of all members of the Legislature, I would like to recognize and thank Clarence and Jenny Tuin for their many years of dedication in organizing the Make a Difference auction. This charity auction began in the Fraser Valley many years ago and has since spread to Vanderhoof and Williams Lake.
Thank you to Sheila and Jono Rushton of McClary auctions and their staff. A special thanks to all the generous farmers, donors, bidders and volunteers who are truly making a difference for the farmers and people of Haiti.
Thank you for this opportunity to honour the farmers of British Columbia.
H. Lali: Racial discrimination or any kind of discrimination is an ugly thing.
In 1919 in Amritsar, Punjab, the British Army opened fire and murdered nearly 1,600 unarmed men, women and children at a peaceful rally in what became known as the infamous Amritsar, or Jallianwala Bagh, massacre.
On March 21, 1960, in Sharpville township, South Africa, the police opened fire and killed 69 innocent people who were peacefully demonstrating against apartheid. Subsequent to that, the United Nations declared that March 21 would be known as International Day for the Elimination of Racial Discrimination and called on nations to commemorate that tragedy and also to work together to end racism and discrimination.
Racism leaves its ugly scars, especially on a child. I first began to witness discrimination when I was almost ten years old. I came to Canada in 1966 and couldn't figure out why so many kids in our new school were treating us Punjabi kids in a mean way, especially since we didn't do anything to deserve it. I couldn't understand why Mrs. Strukoff, my grade 2 teacher, would never let me go to
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the bathroom while all the other kids were allowed. I couldn't understand why Mr. Kiest, my grade 6 teacher, was quick to pull out the strap while other kids got away with much worse. The principal couldn't understand why I ended up in the office all the time.
Name-calling and slurs are one thing, but when people started to get physical due to your skin colour, you really had only two options. Either keep on taking it, or you fight back. You guessed it. I fought back, quite literally, and hence I would end up in the principal's office.
I have been fighting racial discrimination all my adult years through education. Today as a society, we must encourage interaction of cultures and civilizations through education and awareness-building. We must promote dialogue, mutual respect, tolerance, integration and equality of races, genders, religions, cultures and other differing ways of life. Society needs to unite to fight racism and discrimination whenever and wherever it raises its ugly head.
RIDGE MEADOWS CHAMBER OF COMMERCE
M. Dalton: This weekend Maple Ridge and Pitt Meadows also celebrated the 100th anniversary of the chamber of commerce, originally called the Port Haney Progressive Association. The name and the organization have gone through a few permutations, but its purpose has remained to advocate for issues important for the community, to promote businesses and to play a visible role in supporting community events and organizations.
Last year the Ridge Meadows Chamber of Commerce won the Chamber of the Year award. This was in recognition of the great growth it has seen. There are now nearly 700 members, up 30 percent in the past three years.
Dean Barbour is the chamber's current executive director. Along with the chamber staff and the board of directors, including current president Jeremy Bekar, they have all played instrumental roles in seeing this organization revitalized. It is one of the few chambers that is totally self-sufficient, and its frequent events are often sold out.
In the early years, it pressed for the first high school, electricity service, weekend CPR rates to Vancouver, a highway to Mission and the creation of the volunteer fire brigade. Later on, it was involved in the 1957 opening of the Maple Ridge Hospital, the Pitt River swing bridge and the Albion Ferry.
Transportation and infrastructure have remained in the forefront of its priorities. The chamber is enthusiastic about opportunities that the new Golden Ears Bridge and Pitt River Bridge present for the communities. The benefits from the bridges are just beginning to be felt.
The last 100 years have seen many stories of success, and there's every reason to believe that the years ahead will be no different for Maple Ridge, Pitt Meadows and the Ridge Meadows Chamber of Commerce.
DENTAL PROGRAM FOR
A. Dix: My question is to the Premier, and it's with respect to cuts to the Healthy Kids dental program in the recent budget. In the budget the Premier cut eligibility for low-income children eligible for this program from two to one basic cleaning every year.
In contrast, MLAs — such as the Premier and all of us — and the children of MLAs receive access every six months. In other words, the government has chosen a lower standard for low-income children than we would expect ourselves as MLAs. In fact, the coverage that the Premier and all MLAs get is every nine months.
Can the Premier explain why a lower standard of care is justifiable for low-income children in British Columbia?
Hon. M. de Jong: I'll take the question on notice for the Minister of Housing.
FUNDING FOR COMMUNITY SOCIAL
SERVICES WORKER PENSION PLANS
S. Simpson: Yesterday the Finance Minister avoided questions concerning the funding of pension plans in the social service sector. He did this by claiming there was a tentative agreement that was subject to ratification. This is simply not accurate. There is no bargaining, and there are no agreements other than the one the B.C. Liberals signed in 2006.
In March 2006 the government committed to fund the pension plan it negotiated. The affected agencies would never have ratified that agreement without such a commitment. In March of this year the B.C. Liberals broke that promise, creating a $32 million liability for these agencies over the next two years.
With no bargaining to hide behind, will the Finance Minister commit today to funding the pension plan they negotiated?
Hon. C. Hansen: This is a subject that is part of the collective bargaining process with that particular employer group and that group of unions that are involved. As I said yesterday, we will honour the commitment, but there is still work to be done at the bargaining table. I don't want to engage in that bargaining process on the floor of the Legislature.
Mr. Speaker: The member has a supplemental.
S. Simpson: Between yesterday's question period and today, I have spoken to the agencies, and I have spoken to the unions. They all tell me there is no bargaining
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going on, and there is no discussion around this. The agreement comes up March 31 — the commitment. This minister is sitting on his hands and not supporting these agencies.
On March 24, 2006, the deputy from the Ministry of Children and Family Development told these agencies in writing: "I will direct MCFD staff to work with the funded agencies to ensure that appropriate funding to reflect increased compensation negotiated in the social service sector agreement flows to agencies." On that basis, these agencies voted for the collective agreement.
In March of this year the government broke that promise and told these 200-plus groups that they would have to cut services and lay off staff to pay for this agreement.
The minister owes these groups and these workers an answer. Is he going to keep the government's promise and fund this pension plan, or should those agencies start slashing staff and slashing programs next week?
Hon. C. Hansen: As I said yesterday and said earlier, the response to his first question is that government will live up to our obligations and that these are matters that are subject to the collective bargaining process. They will be resolved, in part, at the bargaining table.
N. Simons: Earlier this month the Minister of Children and Families announced a $10 million cut to community social services agencies. They're already reeling from the lack of funding to provide programming for vulnerable children in this province.
Now we have an added cost that this government seems to be flip-flopping all over, unable to come up with a response that they think is going to satisfy anyone. Well, they're right.
As we speak, there are organizations in this province that are planning program cuts to children who are vulnerable, including children who have been sexually abused, children who've witnessed violence, youth in transition, and the list goes on.
Will this minister finally tell the people of this province and in particular those agencies what they're going to do to make sure their programs aren't going to be cut?
Hon. C. Hansen: It was a little unclear from the member's question whether he was following up on his colleague's earlier question with regard to the pension fund. As I said, we will live up to our obligations, and we will negotiate provisions in good faith between the employers' representatives and the union representatives on the basis of the collective agreement that will be, hopefully, successfully concluded at the earliest opportunity. We will be able to determine exactly how we can proceed going forward.
Mr. Speaker: The member has a supplemental.
N. Simons: To make it more clear, will the minister — anybody, any minister — make sure that no programs will be cut because of this government's inability to come up with an agreement to provide proper funding for these community social services agencies? Will he say right now whether or not his decision is going to have a negative impact by cutting programs available to children because of funding for the municipal pension plan?
Hon. C. Hansen: We have increased funding to the Ministry of Children and Families over the last few years. There is more support in the budget this year for those agencies. Until such time as the collective agreement process is concluded and we can determine exactly how the costs will be imposed…. It is not possible at this stage to determine exactly how that will be, because we owe it to the respect of the collective bargaining process to allow those issues to be determined at the bargaining table.
J. Kwan: I have a straight-up question for the Minister of Finance, and I hope that he can give a straight-up answer. Will the minister commit today to fully fund the pension plans for these community groups, and will he guarantee that as a result of the pension plans, there will be no program cuts?
Mr. Speaker: Members. Members.
Hon. C. Hansen: I can assure the member that we will fully live up to all of our obligations, including those that are finalized at the bargaining table.
Mr. Speaker: The member has a supplemental.
J. Kwan: We're not looking for weasel words. We're actually looking for a full commitment and for the minister to honour their commitment and the promise that they made, unlike what the Premier did in tearing up the HEU contracts. The government said before the election that they would fully honour the HEU collective agreement. We're now down that path again with this minister.
I'd like to ask the Minister of Finance a straight-up question, and I'm looking for a straight-up answer. Will he commit today that the pension plan will not impact these organizations and the delivery of the programs? Will he commit today to fully fund the pension plans?
Hon. C. Hansen: I would not want to prejudge the outcome of the collective bargaining process and what may be agreed to between the employers and the employee
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representatives at the bargaining table. As I said before, we will fully live up to the obligations that are finalized at the bargaining table.
FIRST NATIONS CONSULTATION ON
ENBRIDGE OIL PIPELINE PROPOSAL
G. Coons: Today was a historic moment for First Nations in British Columbia and indeed across the province as dozens of nations and tribal councils from across the province joined together to oppose the Enbridge tar sands pipeline.
My question is to the Premier. Will he show respect for First Nations by standing up today and saying no to the Enbridge pipeline?
Hon. G. Abbott: I appreciate the member raising this important issue. There are extensive discussions underway already around the proposed Enbridge pipeline project. It is far from even proceeding to the intensive environmental assessment stage. We will certainly watch with interest the concerns of First Nations, but there is much to be played out in terms of process around this issue.
Mr. Speaker: The member has a supplemental.
G. Coons: That's a concern, as this minister sits here watching with interest. There's a major concern with this pipeline, and he needs to act on it.
The message from First Nations is clear. They say: "In upholding our ancestral laws, rights and responsibilities, we declare that oil tankers carrying crude oil from the Alberta tar sands will not be allowed to transit our lands and waters."
The Premier talks endlessly of his commitment to a new relationship with First Nations, and to date no First Nation in Canada and no municipality has publicly supported Enbridge's proposed pipeline. Statistics show that it's not a question of if an oil spill happens but when. It's time for this government to show they can walk the walk, not just talk the talk.
Again to the Premier: will he rise today and say no to the Enbridge tar sands pipeline?
Hon. G. Abbott: It's always interesting to listen to the opposition and some of the positions that they take. We heard the other day in the Legislature that the outcome of every environmental assessment process should be consent by all parties before any economic activity could proceed on the land base in British Columbia. Now I am hearing this member say that Enbridge should not even talk to First Nations. They shouldn't have an opportunity to explain their project. They shouldn't have an opportunity to explore the possibilities of that project with First Nations in the province.
I find this an extraordinary example of a kind of destructive paternalism on the part of the opposition — that they won't even have industry talk to First Nations. Apparently, these members are prepared to submit their judgment on this important project for important consideration by First Nations. That is an astonishing assertion and an unfortunate one, indeed, from a First Nations perspective.
R. Fleming: The minister should know that Enbridge and First Nations in British Columbia have talked and talked for six years, and First Nations have said no to the project definitively today.
The Enbridge pipeline would make an oil spill on B.C.'s pristine north coast outside the Great Bear rain forest an accident waiting to happen. That's been predicted time and time again. That's the conclusion of a recent study by 12 scientists that took five years and studied 14,000 kilometres of our coast. When a significant oil spill occurs, it could eradicate killer whales. It could exterminate 150 species of marine mammals and birds on our coast.
My question is to the Premier. It's the 21st anniversary of the Exxon Valdez spill off the Alaskan coast today. Will he stand up and reject the oil sands pipeline today?
Hon. G. Campbell: Enbridge has a proposal…
Mr. Speaker: Members.
Hon. G. Campbell: …which is going through a process. That process will include consultation with First Nations. It will include consultation with all those First Nations individually. It will include the most rigorous environmental regime there is anywhere in North America, and it potentially could include billions of dollars of investment, thousands of jobs for people across the north, particularly for First Nations, and build the capacity for First Nations that they've been asking us to build for a number of years now. All of that will be done within an environmental framework that is secure for the long-term future of British Columbia, First Nations and non–First Nations alike.
The way that you actually move to a successful conclusion of these is to include First Nations, talk to them directly, talk about the benefits that they may have, talk about their concerns and see if there is an answer. If there's an answer, it will proceed. If there is not an answer, it will not proceed.
Mr. Speaker: Member has a supplemental.
R. Fleming: Well, I think we've heard from the Premier on what comes ahead of First Nations and the
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environment, and it's Enbridge. In October a freighter ran aground in the same channel that is proposed for supertankers. The Queen of the North sank in these very waters four years ago, and Enbridge now proposes to move 525,000 barrels a day of tar sands oil — oil with three times the greenhouse gas emissions of conventional crude.
Maybe the Premier would like to hear the science on this. Environment Canada lists the Douglas Channel and the north coast interior passages as the fourth most dangerous in the world. The risk of human error, the harsh weather — those things can't ever be taken care of by the Premier's assurances that we've just heard.
Again to the Premier: will he reject this unacceptable risk to B.C.'s environment and say no to the Enbridge pipeline?
Hon. G. Campbell: Well, let me tell you this. I accept jobs for First Nations people across this province that will build the capacity they've been calling for, for generation after generation. I accept a rigorous environmental assessment process, which every major project in British Columbia and Canada must go through.
Evidently, that is unlike the opposition, who reject environmental assessment, who yesterday rejected wind power, who have rejected the benefits of reducing carbon across the province, across the environment.
This is a time to reach out to First Nations, to talk about opportunities and how we actually create economic opportunity within the framework of a sound environmental and scientific policy. That's what we intend to do, and that's how we'll build the future for First Nations in British Columbia and for all British Columbians.
Mr. Speaker: Members. Members.
D. Donaldson: Well, the fact is there are absolutely no long-lasting jobs associated with the Enbridge pipeline, and that's why the First Nations of the north are unanimously opposed to this project. Experts in the shipping and pipeline sectors say, "You move oil; you'll spill oil," and this Enbridge project will spill oil.
My question is to the Premier. Ecotourism, hunting and fishing are major economic drivers in my region. That is why 45 businesses, most of them located….
Mr. Speaker: Members. Members.
D. Donaldson: Ecotourism, hunting and fishing are major economic drivers in my region. That is why 45 businesses, most of them located in the northwest, have signed on to a declaration opposing the Enbridge pipeline.
My question is to the Premier. Will he show his commitment to sustainable local development by standing in the House today and saying no to the Enbridge tar sands pipeline?
Hon. G. Campbell: There's no question that the opposition will say no to anything — any opportunity for investment, any opportunity for jobs, any opportunity for economic development. That opposition has said no year in and year out for almost a decade and a half.
Here's what we have said quite clearly. We believe in economic and environmental assessments. We believe in wind power. We believe in new independent power projects.
To that member opposite, his constituents call our offices and come to us every single day and say: "Please provide us with jobs, encourage investment and do it with First Nations." We will work with First Nations.
Unlike the opposition, I can guarantee the member opposite this: we will work with First Nations, we will work with community leaders, and we will generate investment in jobs that meets our environmental objectives in British Columbia.
PUBLIC RELEASE OF BUDGET DOCUMENTS
B. Ralston: On April 23, 2009, in the middle of the election campaign, the Premier said publicly that the deficit would be $495 million maximum. We learned later that it was actually nearly six times that amount.
Last week, on Friday, through a freedom-of-information request, a number of documents requested at the end of May 2009 were finally released, but they were heavily censored. It does appear clear that the government, on the eve of the election period, received an updated fiscal forecast. Will the minister or the Premier commit today to release those documents to the public in an uncensored form?
Hon. C. Hansen: The member is referring to documents that were prepared for the advice of cabinet and cabinet committees. They were prepared by civil servants who provided that information on the understanding that they were cabinet documents.
Mr. Speaker: Members.
Hon. C. Hansen: I can tell the member that the documents that were prepared for the March 24 meeting were pertaining to the year-end that was actually happening seven days later. I went back and reviewed the
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original documents, and they actually pertained to the 2008-2009 fiscal year.
Mr. Speaker: The member has a supplemental.
B. Ralston: The minister clearly wants to have it both ways. He's refusing to release those documents, yet he claims to give a selective view of what they contain. Why doesn't he simply agree to release the documents? One can well understand what the B.C. Liberals have to hide and benefit from this kind of censorship, but surely the public has a right to know. What possible public purpose is served by continuing to hide these documents?
Hon. C. Hansen: We have a Freedom of Information and Privacy Act in this province. It has served this government. It actually served the NDP government in the 1990s. It is not politicians that make decisions around what gets severed or doesn't get severed in the release of information. It's actually public servants that make that decision, and they made the decision with regard to these documents in accordance with the legislation.
IMPACT OF HARMONIZED SALES TAX
ON MEMBERSHIP COSTS
M. Farnworth: Every day the people of this province are finding out just how the HST is going to impact them, from a more expensive cup of coffee to a more expensive bike if they want to buy one for their kids.
Well, today they're finding out that it's membership fees — going up by 7 percent. So all those people — and there are tens of thousands of them in British Columbia who shop at places like Costco looking for a bargain and a deal — are now finding their membership fees going up by an additional 7 percent on April 30.
Mr. Speaker: Members.
M. Farnworth: Can the Minister of Finance tell us why he punishes British Columbians who are trying to save some money so that they can pay the increase in MSP premiums and the increase in hydro rates?
Hon. C. Hansen: When you have every leading economist in Canada saying that the HST is the single biggest thing we can do to stimulate the economy and create jobs, that's good news for British Columbians. We've got one of the leading tax economists in North America, Dr. Jack Mintz, who's done a study and analysis that shows that it's going to realize an extra $11.5 billion of investment in British Columbia over the next years.
His study shows that it will result in an additional 113,000 net new jobs in British Columbia. Those are British Columbians who are going to have more money in their pockets. They're going to be able to enjoy the purchases they want to make in the province because of the fact that they're going to have jobs and be receiving that income, and that may include purchases at Costco.
FUNDING FOR RETRAINING PROGRAMS
FOR FOREST WORKERS
K. Conroy: Laid-off workers in this province are trying to retrain to get back into the workforce. However, the government has decided to cap retraining funds for laid-off workers at $4,000.
There are a number of training programs for good-paying and in-demand jobs that exceed that cap. Will the Minister of Labour lift the cap on retraining funding so that the unemployed can get retrained in good family-supporting jobs and get back to work?
Hon. M. Coell: The member mentions training. I can tell her that we've invested hundreds of millions of dollars in training in this province.
Mr. Speaker: Members.
Hon. M. Coell: We've increased training in the college in her riding. We've increased training in every college and university across this province. We've helped forestry workers get back into training programs in every part of this province, and we'll continue to do that.
Mr. Speaker: Member has a supplemental.
K. Conroy: Obviously, this minister hasn't heard about the training woes in the Kootenays, because in our area many unemployed forest workers are trying to get into new careers, like trucking. We have one of the best trucking training industries in the province, in Castlegar, and they can't get people into the course now because of the cap on training.
So we have lots of forest workers who want to retrain and become truckers, and they can't get the funding to do it. Again, will the minister — perhaps this minister, perhaps the Minister of Forests, one of the ministers…? Will someone stand up and say yes to forest workers that have lost their jobs, that want to get a new job, that want to get a job in an industry that needs workers, and say no to that cap and let people get back to work?
Hon. M. Coell: It's nice to hear the opposition talk about jobs. We've continued to invest in advanced education. The Industry Training Authority is accepting
[ Page 3551 ]
thousands and thousands of new applicants every year. All of the things that we put forward in budget after budget for increases for advanced education and training, this group voted against.
If they're going to talk about jobs, they're going to have to support some of the things we're doing to create jobs. That includes increasing training programs throughout this province.
BURNABY SCHOOL DISTRICT
COSTS AND FUNDING
K. Corrigan: The Burnaby school board is facing a $7.8 million shortfall, which means almost $8 million worth of cuts to services for kids in our district. Last week on a conference call, the secretary-treasurers of the district were told by ministry staff that they could not lessen the impact by having some cuts this year and therefore using any surplus that they had left over next year.
They were told they weren't allowed to do that and that they could only save half of it. So that means a $2½ million hit for the district of Burnaby.
To the Minister of Education: can the Minister of Education please explain why the minister will not back off and allow school boards in this province to make decisions that will cause the least impact on districts when they're making their budget decisions?
Hon. M. MacDiarmid: We are investing record amounts in education, as the member opposite is well aware.
Mr. Speaker: Members.
Hon. M. MacDiarmid: In this particular school district, enrolment is expected to be the same as it was in 2000 and 2001, and this district is expected to receive $3.5 million more in funding this year. We continue to invest in this district as we do in the other district. The per-pupil funding next year will be 33 percent higher.
We're aware that school districts are, in the province, as are all levels of government right across North America…. They are finding that these are difficult times. It is not business as usual. Our government, in spite of the challenges, in spite of the worst recession in decades, is investing in education, increasing amounts this year. We're investing in our students. We're investing in full-day kindergarten, and we're investing in Burnaby.
[End of question period.]
N. Macdonald: I rise to present 70 more petitions from residents in the Columbia Valley stating their clear commitment to seeing that stroke survivor Norm Gagatek continues to receive provincial funding for his intensive rehabilitation program in Ponoka.
Orders of the Day
Hon. M. de Jong: I call in Committee A, Committee of Supply — for the information of members, the continuing estimates of the Ministry of Citizens' Services — and in this chamber, continued committee stage debate on Bill 2, Budget Measures Implementation Act.
Committee of the Whole House
BIll 2 — BUDGET MEASURES
IMPLEMENTATION ACT, 2010
The House in Committee of the Whole (Section B) on Bill 2; L. Reid in the chair.
The committee met at 2:29 p.m.
On section 4.
D. Donaldson: Hon. Chair, thank you for suggesting that the question I had before we broke would be best put in section 4. So I'll restate it for the benefit of the minister and staff as they are making their way in.
I asked about the value of the B.C. Rail operations, and the minister provided an answer which was appreciated. My question that I'd like to pose again is….
The ideological position of this government is to sell off public assets to private entities. That's not the bent or the automatic fallback position of members on this side of the House. In fact, we're in favour of public ownership when it makes sense. But people look for consistency, and for this government's ideology it seems an inconsistent approach to be proposing this amendment around the incorporation of the B.C. Rail assets into government.
Would the minister agree that bringing B.C. Rail under the ministry is inconsistent with what they've done in the past?
Hon. S. Bond: In fact, the member opposite and I discussed earlier that the throne speech in 2009, in September, actually said that we would take a look at Crown corporations and decide how best to actually proceed. That's exactly what we did.
We did an internal review. We looked at how we could maximize the benefits for British Columbians. We have
[ Page 3552 ]
a structure in place within our ministry that would actually fit very nicely with what needs to be done with the B.C. Rail properties portfolio. So our intention is to bring it back. We will manage it within the ministry. Our goal is to maximize the benefits for British Columbians.
D. Donaldson: The internal review looking at maximizing the benefits…. Is this what the minister referred to earlier — that there was no report or no documents associated with?
Hon. S. Bond: The member's correct.
D. Donaldson: I'd like to ask a question specific to section 4, which provides that the company must make payments to the government or a government organization as directed by Treasury Board — the company being the B.C. Rail entity under what is now the B.C. Transportation Financing Authority and under the Ministry of Transportation.
What type of payments could be made? Could the minister describe the type of payments that are anticipated under this addition to section 4?
Hon. S. Bond: The type of payment and the amount would be determined by Treasury Board, as is laid out in section 4.
D. Donaldson: Well, there's not a lot of detail in section 4 about the kind of payments, but they are saying that the company must make payments. Perhaps the minister could shed some light. They had these discussions around maximizing the benefits of incorporating this Crown corporation. They must have had some discussions around the type of payments that would be anticipated that Treasury Board would be demanding.
Hon. S. Bond: The fact of the matter is there isn't a significant degree of detail, because it's a very simple process. In fact, Treasury Board manages the financial affairs of government, and this is one of the transactions that will take place. Treasury Board will determine what payments, if any, will be made and to whom they will be made.
B. Ralston: The minister spoke earlier of a financial plan for the new, reconfigured B.C. Rail within the ministry. Is it contemplated within that plan — and I appreciate that the plan is in relatively preliminary stages of development — that there will be regular transfers of revenue to the consolidated revenue fund from B.C. Rail? Is that contemplated? Obviously, Treasury Board will make that decision, but surely there must be some forward planning in terms of anticipated revenue in the next three to five years.
Hon. S. Bond: In fact, our plan will line up with the legislation that we intend to pass, and that is that it will be at the discretion of Treasury Board in terms of when, to whom and how much that would be.
B. Ralston: Well, clearly the legislation will be at the discretion of Treasury Board. I'm asking the minister if it's possible to look beyond simply the words and look at the process by which Treasury Board will exercise this discretion.
Clearly, this amendment is put in for a purpose, because I would expect there's some anticipation that there will be some opportunity for revenue. Is there a plan to do that, and is the minister in a position to give a sense of what sort of revenue might be looked at?
I understand there's a real estate portfolio. Is there a sense that the newly reconfigured corporation will be, over the years, liquidating its real estate holdings? Does it intend to become a developer of real estate and to develop industrial parks, for example, and generate revenue for the Crown in that respect?
There are a number of alternatives that one can easily imagine when looking at this legislation. The concern, I suppose, is: what kind of a source of revenue is this new reconfigured B.C. Rail going to be for the Crown in the future?
Hon. S. Bond: Yes, we do expect there to be revenue generated, even as BCRC is actually transferred to the Ministry of Transportation. In fact, we intend to build on the success of the work that they've done. Over the last number of years they've returned $1.5 billion in terms of resources to taxpayers and, in particular, $180 million in gross land sales.
There are a number of areas where we expect there to be revenue generation, including the port sub. I mentioned these this morning in the earlier questions. The port sub, and we also are looking at lease and sale of property.
I think another component for which it's difficult to speculate about the revenue generation is its link to the Asia-Pacific strategy — incredibly important infrastructure and assets.
So yes, we expect there to be revenue generation. We will be reflecting our strategic plan around that through our service plan as we transition. The final component of that is that it will be at Treasury Board's discretion as to any payments that are made and to whom and how much those payments are.
B. Ralston: Can the minister advise whether it's contemplated that the newly reconfigured B.C. Rail will be in the business of acquiring industrial land? I appreciate that there's a portfolio, the minister mentioned, of some 300 properties throughout the province. But will it be part of the specific mandate of either the port subsidiary
[ Page 3553 ]
or B.C. Rail itself to acquire real estate for the purposes of development? What place might that play in the future revenue of the newly reconfigured organization?
Hon. S. Bond: I appreciate the member opposite's question. Yes, in fact, that is possible. As we develop the plan and the thinking around our strategy, it is entirely possible. That is an option. Again, as we develop the strategic plan, that would be reflected as part of our direction and thinking in the service plan.
I think it's important to remind members that we have said earlier this morning that as we transition BCRC, it will now be a regular part of our service plan report and of how we intend to maximize benefits and look, potentially, at the acquisition of property as well.
B. Ralston: I believe that my colleague from Stikine canvassed this, at least peripherally, earlier this morning, but I just want to be sure that I understood it. The service plan that the minister speaks of is one that's in development and will be provided not in this set of estimates but for debate and concern next year. Is that correct?
Hon. S. Bond: Yes, that is correct. We did share that earlier this morning — that it would be in subsequent service plans and that it would become a regular component of our normal service plan process.
Section 4 approved.
On section 5.
B. Ralston: Section 5, I believe, amends section 4 of the Budget Transparency and Accountability Act. I believe that will call for the return of the Minister of Finance. He may have officials who wish to assist him, so perhaps we could politely wait for that, Madam Chair. I am prepared to, of course.
The Chair: Member for Surrey-Whalley continues.
B. Ralston: This proposed amendment reduces by two the number of persons appointed by the minister to sit on the Economic Forecast Council. One can well imagine a number of reasons why this might be so — perhaps the difficulty in obtaining that number of people to give their time to this sort of endeavour. Can the minister advise why this change is being advanced now?
Hon. C. Hansen: This amendment actually specifically implements one of the recommendations that came from the Budget Process Review Panel, which tabled its report in September, I believe it was. It was in recognition of the fact that we've been very fortunate to have the time and energy that the Economic Forecast Council members have contributed. But it may, in the future, get to a point where we may not be able to find a full complement of 12 individuals prepared to serve on this council.
They felt that the objectives of the forecast council could be met with a smaller number, and the number of ten was their specific recommendation. Interestingly, just in the last few months we have actually increased the membership on the forecast council. We currently have 14. This simply establishes a minimum number for the future.
B. Ralston: Yes, I believe that on page 125 of the budget it does say that there are currently 14, and their names are set out. They all look very qualified, at least to the casual observer. I'm wondering what will be the effect of this reduction if and when this amendment is passed.
Hon. C. Hansen: I think we would continue to gain the benefit of the full membership of the Economic Forecast Council. It may be that the council will continue at 14 members. If we have a time in the future that we are not able to recruit that number, then we would be obligated, according to this legislation, as amended, to have a minimum of ten members. But in terms of the function of the council, we expect that it would continue to serve the province as it has in the last number of years.
Section 5 approved.
On section 6.
B. Ralston: The Deputy Minister of Finance in the prologue to the budget speaks of, as a way of explaining some of the changes that the minister is introducing here and in the sections that follow….
The accounting profession is being consumed by the transition, at least on the commercial side, to international financial reporting standards within GAAP. Can the minister explain briefly the implications of that, and specifically the implications of that transition for the operations of government.
Hon. C. Hansen: I think the member, from the wording of his question…. I know he is familiar with some of the dynamics that are happening in the accounting profession globally as a result of issues that developed with private corporations over the last number of years. I think his comment where he said that there are changes happening, particularly in the commercial sector, is absolutely correct.
But we now have to determine exactly what the implications are for some of these changes on public sector
[ Page 3554 ]
accounting. So we remain fully committed to keeping the province's books according to generally accepted accounting practices. But that is in a state of evolution and a state of change in terms of how that may affect public sector accounting in the future because of the changes that are taking place with regard to private sector accounting practices.
So with some of the changes that we have in this budget implementation measure, it is reflecting the reality that there are certainly pressures for change, and we are obviously analyzing them, making sure that we continue to be consistent with generally accepted accounting principles, but recognizing that what is a generally accepted accounting principle is evolving and may be changing in the future. These amendments in this legislation are in anticipation of that flexibility that may be required.
B. Ralston: Again, in his introductory letter to the budget, the Deputy Minister of Finance says: "In some respects, IFRS is a significant departure from current Canadian accounting practice, and its adoption will introduce significant volatility into government's operating statement and could materially affect the fiscal plan."
I appreciate that this transition, and explaining it, may be long and complicated, although you do have the very able comptroller general there to assist in fashioning any response. Can the minister briefly explain what the concern is that the deputy minister has expressed about significant volatility into the government's operating statement.
Hon. C. Hansen: There are probably two things I can point to in terms of that uncertainty that is in the accounting profession today as it pertains to public sector accounting.
One is with regard to how we reflect unrealized gains. If you take organizations in the provincial government reporting entities such as ICBC…. Perhaps you could take some of the post-secondary institutions as examples, where they have investment holdings that would be subject to the volatilities of the market.
Whether or not you actually take those values into consideration at the time that the gains are realized, or whether there is a market price of the day on that particular day — for example, the end of a fiscal year that has to be incorporated into the financial statements…. The net result of that, especially when you look back over the last two years, at a time of significant volatility in the value of investments, can produce huge volatility in financial reporting.
Partially connected to that are also regulated utilities, for example, and rate-based accounting that, depending on where this lands in some of the international determinations, could produce significant volatility for utilities in Canada. It's something that we are following very carefully.
We are actively involved with discussions, nationally, with the accounting profession to determine exactly what is in the best interest of the citizens of the country and of the province. We want to make sure that we reflect our books accurately and in keeping with generally accepted accounting principles, but we need to determine exactly what the new generally accepted principles would be.
B. Ralston: One can foresee that a principle of mark-to-market — in other words, have the financial statements reflect the current value of assets — might well cause volatility. But some might say: "Well, that merely reflects market value, and therefore, it's a more accurate accounting of the value of a going concern or of an organization." Is there not a danger…?
How would the minister respond to that point of view? The answer that's been given suggests that the minister, at least, in the advice he's receiving, is opposed to that position and sees it as something that will introduce uncertainty or volatility into those assessments of the value of an ongoing concern.
Hon. C. Hansen: The rules that we have been following under generally accepted accounting principles for rate-regulated accounting really provide for stability over time. In many cases — when you have utility rates that are being driven by commissions, for example — they are often required to change rates to reflect valuations.
The existing approach is to make sure that there is an effort to stabilize that over time, rather than incurring whatever may be — for example, a spike or a sudden precipitous drop that would occur on the day of a year-end. The practice in place now is to provide that stability over time to level out some of that volatility. But it's not a case of not disclosing any information with regard to the value of assets.
The current Canadian standards…. The practice that is currently there recognizes fair-value risk, but they will recognize that in notes to the financial statement rather than in the actual valuations as of the date of the year-end or the quarter.
B. Ralston: What the minister seems to be saying, in speaking of rate-based accounting, is that the closed commercial Crowns, where the revenue is largely subscriber-based…. Whether it's the Insurance Corporation of British Columbia or B.C. Hydro, it seems that these Crown corporations — or commercial Crowns, as they're sometimes called — will be the ones most likely to be affected by these accounting changes. Is that a fair summary of the advice that the minister is receiving?
[ Page 3555 ]
Hon. C. Hansen: The short answer to the member's question is yes. This would apply to ICBC, B.C. Hydro and other commercial Crowns. The shift to international financial reporting standards is currently being directed by the Canadian public service accounting standards board to take effect in 2012. The degree to which the IFRS would apply to other parts of the government reporting entity is still to be determined, and we still need to work those through.
B. Ralston: Again, to return to the note of the Deputy Finance Minister, the Deputy Finance Minister says: "While government remains committed to having its financial reporting conform to GAAP, this issue may result in government adopting alternate accounting standards from other accredited standard-setting organizations." Indeed, that is the amendment that's proposed to section 11 of the Budget Transparency and Accountability Act.
Can the minister give an example of alternate standards and guidelines that are contemplated by this amendment?
Hon. C. Hansen: When we talk about alternative standards or guidelines, there are within the accounting profession several different approaches to what constitutes generally accepted accounting principles. We are looking at these transitions that are taking place with regard to international financial reporting standards for large private companies. Part of the whole discussion that's been taking place is: are those the new GAAP, or what does constitute a new GAAP for the purposes of the province as a whole and various entities within the provincial government?
There are Canadian standards for public sector, for example. There are also Canadian standards for not-for-profits, and there are certain aspects of the provincial government that may fall into some of those other standards. There are Canadian standards for small companies. There is also a push — or certainly discussion — to look at having a common standard for public sector reporting — public sector GAAP — throughout North America and, again, common reporting standards or accounting standards for North America in the private sector applications as well.
There is no one thing that you can say is GAAP and that it has a finite definition to it. It is something that evolves. It is something that has different applications in different circumstances. What we are committing to is that we are committing to GAAP, and we are saying that we will only use an interpretation of GAAP that would be consistent with a standard or guidelines that have been adopted externally as appropriate for GAAP.
B. Ralston: Based on the minister's answer, can one, then, safely assume that this process will contemplate a period of analysis by the comptroller general and Treasury Board staff — a decision, then a recommendation and then the use of this amendment? Is that how it would work?
Hon. C. Hansen: Yes, and what this provision…. This specific section that we're talking about — section 6 — actually requires that once Treasury Board has made that determination or has made any policy changes in this area, we must disclose that publicly.
B. Ralston: Just to return, then, to B.C. Hydro and the Insurance Corporation of British Columbia, I gather that the date has been set and there's no choice about making the transition. Can the minister advise what effect, if any, given the volatility that's referred to, this might have on the regulatory capital required for the ongoing operations of these commercial Crowns?
Hon. C. Hansen: I can't give the member an answer to that question yet because this is still something that Hydro and the accounting professions are working through. But when it comes to the implementation of IFRS for B.C. Hydro and the other commercial Crowns, as I mentioned, the Canadian standards-setters have indicated that that transition should take place in 2011.
We have expressed concerns, as have other governments, about the impact. There is still the possibility that those Canadian standards-setters may look at the challenges that are going to result from that change and the volatility that would flow as a net result of it.
It may well be, although these are just possibilities, that the Canadian standards-setters may decide to retain the existing rate-regulated accounting systems in place until such time as there is more international certainty with regard to how the new accounting rules should apply to government entities, including commercial Crowns.
B. Ralston: The minister has made oblique reference to other governments. I take it that's other provincial governments. Is there a common position or a consensus position among the provinces, and where does British Columbia fall within that discussion among the provinces?
Hon. C. Hansen: Not all jurisdictions in Canada have regulated utilities and regulated commercial Crowns, but certainly all of the jurisdictions that have such entities have expressed concerns with regard to the blanket adoption of IFRS, as has been proposed by the Canadian public sector accounting standards board. We continue to have discussions with the board and with the accounting profession generally.
[ Page 3556 ]
B. Ralston: Obviously there seems to be some discretion available to the government. Can the minister advise: what is the limit of that discretion? Is there a point at which a failure to adopt would be negatively viewed by the rating agencies — in New York, for example — or is that not something that's a concern in this discussion?
Hon. C. Hansen: With regard to the rating agencies, they will look for specific information. They have templates that they provide to us with specific information that they may require for their approach to evaluating the rating for the province of British Columbia. That would continue.
Whether we were to adopt IFRS for the reporting standard or not would not, in our view, affect the work that the rating agencies do.
D. Donaldson: Welcome to the staff and the minister. In the introductory letter to the budget by the Deputy Minister of Finance, he references that the Canadian accounting profession is in the process of adopting the IFRS standards within GAAP. I'm not sure if I heard in the minister's answer yet what is the…. Does he have an idea of the IFRS timetable for implementation?
Hon. C. Hansen: IFRS is something that is being implemented internationally. It's being implemented in different ways in different countries according to the generally accepted accounting practices and the determinations of the various standards-setters within those jurisdictions.
In the case of the Canadian public sector accounting standards board, they have indicated that commercial Crown corporations in Canada should be prepared to shift to IFRS effective for all fiscal years that start after January 1 of 2011.
D. Donaldson: Thank you for that answer. These are understandably standards and procedures that many find fascinating, but trying to decipher it is our job here, and I would ask the minister: what are the implications to GAAP of the Canadian accounting profession adopting IFRS standards?
Hon. C. Hansen: I think the member's question was around what the implications are. I think probably the biggest implication is the degree to which we would see volatility in the financial results and financial statements for a point in time, as opposed to the stabilization that is implemented today to make sure that valuations are properly reflected over time but not exacerbated by what may be a particular degree of volatility at a point in time.
With regard to the switch to IFRS, the only thing that is currently sort of in the timeline to be implemented is what I mentioned with the shift for the fiscal year starting after next January 1 for the largest commercial Crowns. In British Columbia that's about seven of our commercial Crowns that would be caught in that unless there is reconsideration by the Canadian public sector accounting standards board.
Just to give the member a sense of what some of that volatility could look like and the implications of it…. Today, for example, we will go out to do valuations of the assets of a pension plan, and if a pension plan is underfunded, that can, in some circumstances, trigger an immediate change in contribution rates.
Now, if you wind up with a valuation where there is suddenly a short-term decline in asset values for that pension plan that happens on the day of that valuation, then you could actually trigger a contribution rate increase for workers that would be totally unnecessary.
So part of the debate that is going on now is how you ensure that you get an accurate reflection of the assets that an organization holds but in a way that actually ensures that you can reflect the stability of that over a period of time and not necessarily just for a point in time that the valuation may be done.
Section 6 approved.
On section 7.
D. Donaldson: Well, first, I thank the minister for that last answer. Giving a clear example really helps to provide some definition of what we're talking about here.
Section 7. There are a number of strike-outs and additions in this section regarding the Budget Transparency and Accountability Act. I'd just like to ask the minister: what's the intention of these amendments? What problem are they addressing?
Hon. C. Hansen: I think this goes back to really the degree to which there are varying interpretations as to what constitutes generally accepted accounting principles, particularly at a time when those principles are evolving and changing. What we want to ensure is that across all of the government reporting entities we have consistency in our approach.
So rather than having various bodies within the government reporting entity embarking on their own interpretation that we then have to amend and adjust in order to fit into our consolidated financial statements, we want to make sure that we can actually give direction to ensure that we have consistency in interpretation across the entire provincial government reporting entity.
Section 7 approved.
[ Page 3557 ]
On section 8.
D. Donaldson: Well, that's a nice segue. I find this section quite interesting, and it's a nice segue into consistencies, as the minister talked about.
This section allows the government to adopt different accounting practices within certain limits. In this section a few of the standards are discussed. The minister, in a previous answer, briefly touched on them. The GAAP for organizations in Canada other than senior governments. Another standard is the GAAP applicable in a jurisdiction outside of Canada. And then there's the standard GAAP for senior governments in Canada.
So my question to the minister is: what are the implications of using, potentially, three different standards within this section?
Hon. C. Hansen: Currently we have four different accounting standards that get followed and practised within the broad public sector, the government reporting entity. The four are the public sector standards, the not-for-profit standards, the rate-regulated standards, and we also have commercial standards.
Our hope, through this approach and the powers that would be given to Treasury Board to provide this direction, is that we can actually reduce the number of standards that might get utilized across the public sector. But more importantly, it's to bring consistency to how these various entities keep their books so that when we consolidate them with our books, there is one comprehensive and consistent approach.
D. Donaldson: The way I understand this section, it allows a certain leeway for Treasury Board to decide on which standard to use. Could the minister advise how Treasury Board would, in his opinion, decide on which standard to use in which circumstance?
Hon. C. Hansen: I think the short answer is that advice would come forward to Treasury Board from the comptroller general. The comptroller general, in turn, would take into consideration what the advice is that's coming from the accounting standards boards that look at these issues.
We would also look at what happens in other provinces, because not only do we want some consistency with regard to our own government reporting entity in British Columbia, but we also want to ensure that the measures we take are consistent with the approaches taken by other jurisdictions in Canada.
Also, in B.C. we've got the benefit of what's called the Accounting Policy Advisory Committee. This is a group of leading accountants in British Columbia who provide us with advice from time to time in terms of how British Columbia should be implementing and reflecting various directives that come from the various standards-setters. That is a body that's particularly invaluable to us as a ministry, and me as a minister, when it comes to particularly new areas that need to be explored for new interpretations that need to be established.
D. Donaldson: Are the minutes of the accounting advisory committee available for public scrutiny? Do they report out on a basis that would allow public transparency?
Hon. C. Hansen: This is a body that has been established to provide advice to the Minister of Finance. I don't receive written reports directly from them. I meet with them from time to time, and I certainly get the benefit of their advice.
D. Donaldson: It's interesting. We had the Minister of Transportation in here earlier, and she doesn't get written reports either. I'm glad you have good memories because there's lots of dialogue going on without any record, it seems.
My question relates back to Treasury Board — how they would make decisions on which standard to use. Thank you for your answer on that.
I think you alluded to it, but perhaps you could elucidate a bit more on what mechanisms are in place for explaining the decision of the Treasury Board about which standard to use and mechanisms to communicate so that there's a level of scrutiny and accountability and transparency.
Hon. C. Hansen: In response to the member's question, there are several mechanisms by which the accounting policies of the province are presented and disclosed. First of all, with regard to the estimates that are tabled on each budget day, there are, actually, in there…. The accounting policies that are followed by government are set out in that document. Also, in public accounts there's a full disclosure of public accounting policies, including a legislative compliance-and-accounting policy report.
Given the changes that we're making in this legislation, we can anticipate that in future presentations of public accounts there will actually be an even more extensive presentation of the accounting issues as they evolve over these coming years.
Then finally, it's the work done by the Office of the Auditor General, looking at and reporting on the accounting policies of government.
D. Donaldson: Just to make sure I got that straight, through the three mechanisms referenced by the minister, a person would be able to discover which of the four
[ Page 3558 ]
standards that the Treasury Board has at its disposal was used in applying the standards. Is that right?
Hon. C. Hansen: The short answer is yes. In addition, there is also the opportunity by the Public Accounts Committee of the Legislature to review any accounting policy issues that they may choose to do.
D. Donaldson: I'd like to go to the other side of this section 8. We've been talking about the ability of Treasury Board to have some leeway in which accounting standards it uses. It's also referenced in this section that the Treasury Board has the ability to decide which government organizations to apply the different standards to.
How does the minister see that happening? How will the Treasury Board decide which government organizations it applies which standards to?
Hon. C. Hansen: What we will be doing is taking the advice of officials with regard to what would be the most appropriate accounting standard to be applied to each organization.
It is our intent that…. We want to have as many government entities as possible reflecting public sector accounting standards. That is what the majority of government reporting entities do today. We want to see even more bodies adopt that standard, so that may come as part of that directive.
What it really boils down to is that we'll be looking at the substance and the operations of each of these organizations to determine which standard is most appropriate for that. Our overall objective is to get to as much consistency across the government reporting entity as we can achieve.
D. Donaldson: I have a final question, I believe, for this section. We have a number of standards that the Treasury Board could use, and we have a number of different government organizations that they could be applied to.
I think the minister would agree that what we're seeking is clarity so that the people in the province who are concerned about the proper accounting of how we spend the revenue in the province have a clear picture of that. When would you anticipate that that clarity would be resolved — as in having fewer standards and one, perhaps, clearer process?
Hon. C. Hansen: It's fair to say that this is an evolving process. There was certainly more certainty and more stability around what constituted generally accepted accounting principles four years ago. It's because of the events worldwide that have really triggered some of that re-evaluation as to what should constitute GAAP.
We expect that it's not going to be a process that we're going to get through, and suddenly we're going to be back to certainty and stability again. It will continue to evolve over time, and we will continue to have to modernize and re-evaluate the standards that we apply, on an ongoing basis. But it is our hope that we will get to a point of having more certainty and considerably more stability in the accounting standards within 12 months from now than we have today.
I think the critical time is going to be over this next 12 months, as we evaluate what some of the standards-setters are determining both nationally and internationally and we determine how our practices can best reflect whatever that new generally accepted accounting principle evolves into.
B. Ralston: Given the ambiguity and uncertainty that the minister has referred to, does this pose any particular personnel challenges? Obviously, it makes work for the accounting profession, but is there the range of people that are literate and proficient in understanding the various evolving standards? Or are there specifically recruitment problems that may be contemplated at some levels of government or in some of the government organizations?
Hon. C. Hansen: This is an issue that was foreseen by our comptroller general a number of years ago. Actually, about two years ago we specifically hired an expert in international accounting standards into government, into the comptroller general's office. That individual is providing invaluable advice as well as providing training for others throughout the government entity in terms of the implications of the transition to these new standards.
It's also in terms of our commercial Crowns that are being impacted and need to be ready if in fact the transition to IFRS goes ahead next year. Those commercial Crowns have already to date done a considerable amount of work to prepare for that transition for when that day may come.
Section 8 approved.
On section 9.
B. Ralston: This appears to be a routine amendment, just striking the Homeowner Protection Act from a list of designated acts under the Business Practices and Consumer Protection Act. Can the minister confirm that that's an accurate explanation — the homeowner protection? This is part of the windup of the Homeowner Protection Act?
Hon. C. Hansen: Yes, that's correct.
[ Page 3559 ]
Section 9 approved.
On section 10.
B. Ralston: I'm going to ask the minister to explain the purpose of this amendment. It appears to be a fairly technical amendment that redefines what is categorized as expenditure for the purpose of the College and Institute Act. Can the minister describe the problem that this amendment is intended to remedy?
Hon. C. Hansen: I think, like the discussions we had earlier in the broader context of the government reporting entity, that this is intended to make sure that we have consistency and stability in financial reporting.
Today there is actually a discrepancy between the practice followed by post-secondary institutions in their financial reporting and the practice followed by the government reporting entity as a whole.
When we consolidate the financial statements using the accounting principles that we apply for the GRE, we actually have to go in and convert the numbers presented to us by post-secondary institutions because they're using a different standard, different definitions.
This amendment is to ensure that we have the same amendments, the same interpretation and the same definition that are used by the post-secondary institutions in determining their expenditures and their revenues and that that is consistent with the definitions that we're using for the broader public entity.
B. Ralston: It seems, then, that there was a disagreement and that both sides weren't able to come to an amicable settlement. I don't know whether I'm reading too much into it.
What was the consequence of that disagreement in terms of reporting by colleges and universities? Was there a perception or a reality on the government side that colleges and institutes were not accurately reporting their expenditures and their revenues?
Hon. C. Hansen: To clarify my previous answer, this is actually not about their financial reporting. It's about their financial planning and their budgeting process.
For example, if you wind up using unrealized losses today, in their planning purposes, it could result in them having to reduce courses and reduce program offerings that they otherwise would not have to do if they were to use the same consistent definitions that we use in the broader provincial government entity.
B. Ralston: Is this something that the chief financial officers of the institutions requested, or is this something that Treasury Board and the comptroller general have urged upon the minister for legislative change?
Hon. C. Hansen: This is something that is coming from the provincial government, because we saw this as a looming problem that we felt needed to be addressed and to ensure the consistency in definitions.
B. Ralston: The minister has mentioned that this amendment is intended to be focused on forward planning. But I note on page 63 of the budget, in the section entitled "Expenditure management in remaining Crown agencies and the SUCH sector" — I'm going to quote just so that I'm sure that I have it accurately:
"In addition, changes are proposed to the legislation governing the post-secondary sector in order to clarify some important accounting terminology contained in the relevant acts. For example, those acts do not provide a clear definition of 'revenues' and 'expenditures' at present, which has created challenges for government financial management and reporting processes and the fiscal plan."
So it seems to be a slightly…. Well, in fact, more than slightly. It seems to be referring to the full range of financial operations of government and their relationship with these institutions — management, reporting and the fiscal plan. So would the minister care to expand upon his previous answer?
Hon. C. Hansen: In terms of the paragraph that the member quoted out of the fiscal plan, I think all three elements of those get addressed in various measures that we're taking.
But this specific section 10 addresses primarily around the ability of our fiscal management. Because of the specific language that had previously been in this act, which was not consistent with the definitions that we would use generally, this specific act needed to have this consistency, or this change, to bring it in line with the general approach in terms of our forecasting and our financial management.
It does not in itself alter how these institutions report, but it does alter how they would approach their fiscal planning.
B. Ralston: The amendment refers, at subsection (1)(b), to "endowments received by the institution." The amendment proposes to treat them other than as "revenue of the institution from other sources."
Can the minister explain why it's proposed by this amendment that endowments be given that treatment? I think I understand the explanation of the previous subparagraph, "unrealized gains or losses…." But perhaps the minister can explain why endowments are included in this subsection as well.
Hon. C. Hansen: It's because of the nature of endowments. They are not established to be spent in an operational sense but rather to earn an investment income from, and it's that investment income that would subsequently be
[ Page 3560 ]
available to the institutions. By saying that these cannot be specifically reflected as revenue, it's because they need to be reflected as assets and not revenues.
B. Ralston: I think I understand. It's a distinction that's drawn between, I suppose, revenue and capital, would be the standard way it might be expressed. Thank you for that. Those are the questions I have on this section.
Section 10 approved.
On section 11.
B. Ralston: I understand this is simply a consequential amendment that follows the one that we've just dealt with. Is that correct?
Hon. C. Hansen: Yes.
Section 11 approved.
On section 12.
B. Ralston: Can the minister explain the purpose of this amendment? It appears to be fairly inward-looking, as it refers to the Budget Transparency and Accountability Act, but perhaps the minister can quickly confirm why this amendment is necessary.
Hon. C. Hansen: This is a very technical amendment. It simply reflects the fact that throughout the Financial Administration Act, the term "government organization" is used in various places. It does not currently have a specific definition, and it was felt that that definition would be appropriate. For consistency, we have aligned this definition with the same definition as currently is presented in the Budget Transparency and Accountability Act.
Section 12 approved.
On section 13.
B. Ralston: This proposed amendment appears to give new powers to the comptroller general. It both directs the comptroller general, from the perspective of the Treasury Board, and gives the comptroller general the authority to issue directives and guidelines to government organizations.
Can the minister explain why this amendment was necessary? It would appear that there is a fairly well-established chain of command and direction within government, certainly on the financial side. So why were these, what appear to be additional powers, necessary at this time?
Hon. C. Hansen: This section is not language that currently exists. It's new. It is totally consistent with the role that the comptroller general has had up till now. But I think probably the most important distinction is that up till now that role of the comptroller general applies only to the consolidated revenue fund. What this amendment does is broaden that role to apply to the general government reporting entity.
Section 13 approved.
On section 14.
B. Ralston: The explanatory note for this section says that it "allows for recoveries from a vote to be based on funds received in previous fiscal periods." It doesn't appear to be obvious from what is available in that explanation. Can the minister explain the purpose of this section?
Hon. C. Hansen: I think the specific issue that this is addressing is when the federal government will flow money to the province for a two- or three-year program, or even longer, they will provide that funding up front. So in many cases, we've actually had transfers from the federal government with regard to multi-year programs, and they arrive right at the end of a fiscal year.
What we need to be able to do in a much more streamlined way and with better disclosure is to be able to say, "Yes, we can receive those moneys, and they are for future years," so that the accounting principles that would apply would, in fact, reflect the fact that these disbursements would go out over a number of years.
[C. Trevena in the chair.]
B. Ralston: Madam Chair, welcome to the chair.
I think I understand that explanation. I'm looking at the amendment: "(i) the actual credits or recoveries…in accordance…as revenue of the government for the fiscal year to which the appropriation relates." This is to authorize the Treasury Board, then, to allocate to either the current fiscal year or a series of future fiscal years.
How far forward does accounting practice permit that kind of designation of a future fiscal year to be made without running afoul of the Auditor General? I think I understand the principle that the minister has enunciated. I'm wondering: what's the outer limit of the power that's being conferred here upon Treasury Board?
Hon. C. Hansen: That would be determined by the agreement that would be struck with, in the example we used earlier, the federal government or whoever was the organization transferring those funds. The federal government transfers in recent years would be an example of that.
[ Page 3561 ]
I think the examples that come to mind in recent years have been anywhere up to about…. I think five years would probably be the longest. But that would be determined by the comptroller general, who would look at what the appropriate accounting treatment would be given the nature of the agreement.
B. Ralston: I suppose there is a very traditional concern that one has when looking at balance sheets — that the power to shift from either expenditure or revenue from one year to another can lead to an inaccurate or even a distorted view of the financial state of affairs for a given fiscal year. Certainly governments and, indeed, private companies or public companies are sometimes accused of using that kind of sleight of hand.
What is the check on that power that's being given here to transfer revenue, either forward or backward, in a manner that might be more congenial to a government — say, a government trying to avoid a deficit or reduce the size of a deficit or to increase revenue in a subsequent fiscal year for other purposes? What's the check on that?
How can the public feel assured that what's being reported is indeed an accurate state of affairs for a given fiscal year rather than the product of a series of fiscal shuffles?
Hon. C. Hansen: What this amendment will do is actually allow for better disclosure, specifically when we have these kinds of transfers coming from, say, the federal government. The timing and the value of these can be explicitly set out in estimates, which would be an improvement over the disclosure that we have today.
In terms of the check on it or the…. I think there are a couple of things. First of all, it would have to follow accounting standards in terms of how this would be implemented. That would be determined by the comptroller general and would have to pass the approval of the comptroller general in how this was presented.
Ultimately, I think that there's always the power of the Auditor General to review how those accounting standards were applied as well with regard to these particular multi-year funds.
B. Ralston: The example that comes to my mind is the change in the expenditure for security costs at the Olympics. The minister will remember that the federal government contributed further funds and there was an offsetting reduction of the province's commitment to joint capital projects in future years. Would this amendment increase the transparency of that sort of accounting decision?
Hon. C. Hansen: This amendment would not affect the example that the member refers to. What happened in that case is that we gave up the right to a future transfer of funds from the federal government with regard to capital projects.
I will add that we have had an ongoing look at that particular issue, and there is still discussion in terms of what the appropriate accounting treatment of that agreement with the federal government is. There is still more work that is being done on the agreement that he refers to.
B. Ralston: I'll look forward to that update because it certainly was, at the very least, a creative solution.
The amendment also refers to estimated credits or recoveries set out in the details. How do recoveries factor into the treatment here? In the minister's example, he talked about a transfer of a flow of federal funds and then allocating it in different fiscal years. What's the impact that's contemplated here by a reference to credits and recoveries?
Hon. C. Hansen: What this would pertain to is where…. For example, if the province is undertaking to deliver a program on behalf of the federal government over a number of years and instead of the federal government saying that they will transfer X number of dollars to be allocated in each of the coming years, they may, for example, say that they will transfer a certain amount of funding per participant. The participants in the program could vary.
We could do estimates as to what the uptake of that program would be, but we wouldn't, with any certainty, be able to put into the spending estimates an appropriation for the amount that would be spent.
What this says is that if a program, for example, is more successful than was originally estimated, and there is more money that flows from the federal government to the province with regard to covering the costs of that program, then we would have the legislative authority to actually spend the additional amount that the federal government would transfer in without coming back for a special appropriation in the House.
B. Ralston: I think the minister made me believe that I understood that explanation, so I want to thank him for that. Then, that's really the only further question I have on that section.
Section 14 approved.
On section 15.
B. Ralston: I think the amendment here is very straightforward. I just want the minister to confirm that it strikes out "as defined in the Budget Transparency and Accountability Act." Is that correct?
[ Page 3562 ]
Hon. C. Hansen: This is simply a very minor consequential amendment as a result of us putting the definition into the definitions section. It is no longer required in this particular clause.
Sections 15 to 19 inclusive approved.
On section 20.
B. Ralston: This begins a series of amendments which relate to the transfer of the Homeowner Protection Office to B.C. Housing. I also may be assisted here by my colleague from Vancouver-Hastings, who's the critic in this area.
Can the minister briefly set out…? I'm not sure whether it's going to be the Minister of Finance or the Minister of Housing and Social Development who will be taking these questions, but could the minister who chooses to answer — the appropriate one — explain briefly what's contemplated here and why?
Hon. R. Coleman: Madam Chair, maybe we could take about a three-minute recess while I get my staff here.
The Chair: Committee will recess while staff are brought in.
The committee recessed from 4:06 p.m. to 4:11 p.m.
[C. Trevena in the chair.]
Hon. R. Coleman: Maybe just before we start, I'll introduce the staff that I have with me. I have Shayne Ramsay, who is the president and CEO of B.C. Housing and the Homeowner Protection Office. I have Jeff Vasey. Jeff is the executive director of the building, safety and policy branch. And Tracy Green, who is the manager of liaison and safety policy, is behind me.
S. Simpson: There are a lot of issues related to homeowner protection changes and the role that B.C. Housing will play. We'll deal with most of those in estimates, when we get to the estimates for the ministry, at that time.
Dealing very specifically with the changes that are reflected in Bill 2. This section repeals definitions of the advisory council, the director of research and education, the office and the program. Could the minister maybe just tell us a little bit about what the role of the advisory council is currently that will be repealed by this?
Hon. R. Coleman: Later on in one of the sections we actually identify this. Basically, the provincial advisory council is being replaced by the Industry and Consumer Advisory Council. The HPO is dissolved, effective April 1, 2010, and administration of the residential builder regulatory system is transferred to B.C. Housing.
The reconstruction program stopped accepting applications for financial assistance on July 31. It continues the reconstruction loan portfolio in this section. The advisory council and its purposes are established in section 10.2, and there are no other references to it in the act.
S. Simpson: The exclusion of the advisory council…. I believe the minister referenced a body that will replace some or all of the functions of the advisory council. Could the minister tell us: are there functions currently practised by the advisory council of the Homeowner Protection Office that will not be covered by this new body?
Hon. R. Coleman: I'm going to jump forward to section 27's description, which is a technical description of the technical amendment in section 20. Basically, the provincial advisory council today gives advice on builder licensing and compliance enforcement, builder registry, mandatory new-home warranties, owner-builder authorization, and research and education. The new council will do exactly the same thing. The difference will be that the new council will be adding consumers to the advisory council.
S. Simpson: Moving on, section 20 also, in terms of the repeal definitions, repeals the definition of the director of research and education. Could the minister tell us essentially what the role of the director of research and education is in the current HPO at this time?
Hon. R. Coleman: Again, I'm going to bounce forward to another section which actually deals with this. The last one, we bounced forward to section 25. This one, I'll bounce forward to sections 28 and 29 and try and give the member the explanation from there because those are the sections that deal with the member's question. I know that's not the normal practice with regards to whether we…. But whatever we deal with in the section, if later on…. I don't have a problem with that.
Basically, the Homeowner Protection Act, section 11, establishes that the CEO of the Homeowner Protection Office must establish a division for research and education and appoint a director. Then it goes on, under section 12, to establish the purposes of the division within the company, which would no longer exist, and then section 13, an advisory council on homeowner protection.
Basically, what the amendments are doing is repealing those sections to reflect that B.C. Housing has an established organizational structure already that also includes a research and education department. It amends section 12 to establish the responsibility that B.C. Housing will
[ Page 3563 ]
have with respect to research and education to residential construction for the purposes of the Homeowner Protection Act. Then it also establishes a new advisory council.
The reason for the amendment is that the research and education respecting residential construction is one of the key purposes of the act established in subsection 2(1). This section now focuses on the research and education responsibility that B.C. Housing will have under the Homeowner Protection Act versus having a separate Crown corporation, a separate entity. Being folded in, there's no need to have the language in and around the specific sections of divisions within a company that no longer exists.
S. Simpson: I certainly have no problem with the minister kind of bouncing to other sections in order to clarify these things so that we understand them better. With this — and I guess if we're bouncing around a little bit, I'll just reference….
I know that in other sections it talks about — in things like section 24 — how B.C. Housing must designate employees as compliance officers, as a registrar, etc. It doesn't make that requirement around research and education, though I know there is a section that talks about the function. I'm not sure whether this is the place for this question. If not, I will ask it someplace else.
Is there an increase in the budget of B.C. Housing to cover off these functions, or are they taking people and budget from what is the HPO office and folding it into B.C. Housing so that they have increased resources or capacity to fulfil these responsibilities?
Hon. R. Coleman: The Homeowner Protection Office has always been funded by licensing fees. That doesn't change. There are no additional dollars that are required by B.C. Housing because the fees will continue to do that for the compliance, licensing and research and education. The licensing fees will still come in and be applied the same way they were under the HPO.
S. Simpson: Currently, there's a line item, presumably in the HPO office, for research and education purposes, and X amount of dollars are spent by that office presently, up until this legislation is enacted. Can we expect a comparable or greater amount of dollars to be spent by B.C. Housing in relation to research and education as it affects home construction and the functions here?
Hon. R. Coleman: It always depends on how many licences a year, but we would anticipate — because of not having the duplication of the same amount of administration and management, because we're bringing this into B.C. Housing — that we would actually have more dollars to invest in the infrastructure of research and development with regards to building code and building environment.
At the same time, we're also working on the built environment with our building standards branch, which would also be working with B.C. Housing, so that we're not duplicating as we try and improve on the built environment. There's no reduction. We actually think there will be more money that will be available to go into research.
S. Simpson: I appreciate the minister's confidence that there will be more money. Could the minister tell us: what is the budget for research and education currently in the HPO? What is the budget that B.C. Housing anticipates once they have full responsibility for this?
Hon. R. Coleman: I don't want to throw this into difficulty for the member opposite, but that's more of an estimates question. We don't have that information here today. I mean, we're dealing with section 20, which deals with the change in the bill.
We're happy to get the information for the member. We don't have it at our fingertips at the moment.
S. Simpson: I would appreciate that information. We will explore those questions further when we get to the estimates process. With that, I have no more questions that relate directly to section 20.
Section 20 approved.
On section 21.
S. Simpson: Section 21, if I understand this properly, is essentially the section that begins to remove the responsibilities around the reconstruction loan program. Could the minister explain whether that's correct, or what the purpose here on section 21 is?
Hon. R. Coleman: This is a technical amendment to the act. The previous section read that the purpose of the act is "the administration of the reconstruction loan portfolio, as defined in section 24.1." It's changed to be just the administration of the portfolio rather than the loan program, and the reason for that is because there's no longer a loan program. That disappears.
Basically, the reconstruction program stopped accepting applications on July 31. That portfolio now represents outstanding loan and interest subsidies approved by the Homeowner Protection Office under the reconstruction program.
We're renaming it to the portfolio because what happens now is that the loan portfolio will not stay with the Minister of Housing and Social Development. It will now be managed by the Ministry of Finance, because we're
[ Page 3564 ]
not, basically, the manager of loans for the province of British Columbia, so that will go to Ministry of Finance. Basically, that section sets out the requirements for administering the reconstruction of that loan portfolio.
S. Simpson: Could the minister tell us: what is the current size of that portfolio in terms of value dollars?
Hon. R. Coleman: Again, that's more of an estimates question, but we know that there are about 2,500 outstanding loans that are managed under the program. The actual dollar value we'll have to get for you.
S. Simpson: We'll get that specific dollar number at a later time. That's not a problem. When I read section 21, the change, it says: "…the administration of the reconstruction loan portfolio, as defined in section 24.1…." Am I to understand…? The minister says the responsibility for the loan portfolio essentially moves over to Finance, where these kinds of matters rest, as a rule. That administrative function, though, continues…. B.C. Housing continues to administer that on behalf of the government, on behalf of Finance as well? Is that correct?
Hon. R. Coleman: Just so we're clear, the change in the act is changing the word "program" to the word "portfolio." That's all the change is in the section, and that is because there is no longer a program.
The portfolio. Finance will administer the loans to maturity, and they will also do all the functions relative to the administration that go with the loan portfolio — to Finance as well.
S. Simpson: Just so I'm clear, all the responsibilities, then — and the minister can…. All the responsibilities related to the reconstruction loans…. There's no program, but there's an existing portfolio. Everything responsible for that, the administration of that and all those functions, will now be removed from B.C. Housing and will sit solely with the Ministry of Finance. B.C. Housing, as the agent for these services, will have no role in relation to that anymore. Is that correct?
Hon. R. Coleman: Essentially yes, with one hiccup, one exception, and that is upon the receipt of warranty, which is also administered through the licensing program that B.C. Housing has, there's a collection of a $750 levy for the loan portfolio. That money will still be collected by B.C. Housing but transferred directly to the Ministry of Finance. Section 25 speaks to that further on in this discussion.
S. Simpson: One last question, and this may not be answerable. This may be a matter for Finance estimates or the estimates of the minister at a later time.
I know the minister said that he had roughly about 2,500 properties, I think, that were still under the program currently. Does the minister have an estimate of when the obligations around those properties are anticipated to be fulfilled and there to essentially be no more portfolio?
Hon. R. Coleman: There are sections — sections 30-plus — that deal with Finance's obligation in this. Actually, you could probably ask those questions of Finance at that time. The estimate is between seven and ten years that they will all be dealt with going forward, so somewhere around 2020 this whole thing should sunset.
Section 21 approved.
On section 22.
S. Simpson: Section 22 covers what was the Homeowner Protection Office, a description of the office and a number of the functions that relate to that. Part 2 talks about the purposes of the office, which were: "(a) to license residential builders and other persons required to be licensed under this Act, (b) to carry out research and education respecting residential construction in British Columbia, and (c) to administer the program."
On the first of those matters, "to license residential builders and other persons required to be licensed" under the act, could the minister tell us how that licensing will occur now and under whose responsibility that will occur?
Hon. R. Coleman: The licensing will now be done by B.C. Housing.
S. Simpson: Having B.C. Housing take this responsibility on, will this require B.C. Housing to take on functions that it currently doesn't apply? If so, what is the expectation of the staffing or the resource obligations for that? Maybe we'll just wrap all these questions up. Does that come out of the $750 fee?
Hon. R. Coleman: Most of the existing staff of the HPO have been transferred to B.C. Housing to become employees of B.C. Housing as a division within B.C. Housing. The cost of that division will come out of the licensing fees, which on first licensing is $600 and on renewal is $500 a year for a licensed builder in B.C.
The $750 levy for the reconstruction loan program will stay in existence until such time as the loan program is extinguished. That's what it was put in place for — to pay down that loan program and manage it.
S. Simpson: I appreciate that, and I'll get back to that.
If I could just get a clarification from the minister on his answer, which I'm not sure is specifically this section.
[ Page 3565 ]
I believe the minister said the $750 fee will remain in place until the portfolio is extinguished, until it's done. Is it the expectation of the minister, then, that at the time the portfolio is done, the fee is done?
Hon. R. Coleman: Yes. Once the portfolio and its costs are extinguished, the fee would disappear.
S. Simpson: The second of the purposes of the office is to carry out research and education respecting residential construction in British Columbia. To the minister: is that function also to essentially be paid out of the $600 and $500 assessments that the minister spoke about earlier that will pay for the licensing, or does it come from a different source?
Hon. R. Coleman: Yes, status quo. That's exactly correct. That's what will fund that as well.
S. Simpson: I want to follow up a little bit on this purpose again, the research and education respecting residential construction in British Columbia. We know there's a lot of discussion over the last couple of years around innovation — construction innovation, green buildings, new ways to build that are more energy-efficient, etc.
Is it the expectation now that B.C. Housing, if it has taken this function on, will have particular responsibilities or be paying attention to those new technologies as part of the responsibilities of this function?
Hon. R. Coleman: Just so the member understands, they will perform a function in an integrated manner with the building standards branch and other aspects of government, whether it be the Fire Code, and those sorts of things. The research and education respecting residential construction in B.C., although it's one of the key purposes of this, will also be integrated with the other key purposes as we build into the built environment.
As we go forward, we need to deal not only with what exists in residential construction but also in multifamily and other areas of commercial construction with regards to the management of water, sewer, electricity — those functions. Those are actually with the building standards branch.
The reason for actually bringing this together is to make sure it's integrated so that we're not doing two things at once. Basically, the research and development will integrate the changes to the building code going forward so that it's always integrated across government in one ministry.
S. Simpson: I think I understand that. We're going to bring it all together, and that makes some good sense.
Where will that rest when it comes together? Will it rest with B.C. Housing under their responsibilities? Will it rest someplace else? Who's going to have the responsibility for what was the function of (2)(b), which is now being repealed under Bill 2? Is that function going someplace else, or are other things coming to B.C. Housing on that function?
Hon. R. Coleman: I'll try and answer the question for the member as it is laid out in section 29. Basically, B.C. Housing is responsible for the following: to establish and maintain "expertise in building science, especially as it applies to British Columbia and the British Columbia Building Code;" to "conduct research into cost effective building techniques, processes and materials appropriate for use in British Columbia." Those are the functions, and some other stuff, that the Homeowner Protection Office will be doing.
But the B.C. building code itself is the responsibility of the building standards branch. The building standards branch will take advice from the research and work of B.C. Housing, which will formulate our future designs or changes that may be required under the building code. That's always been the case.
The two agencies have actually — even when one was the Homeowner Protection Office — worked well together as far as sharing that information and trying to have one coordinated response with regards to future building opportunities and stuff with regards to the code in B.C.
At the same time, we have a lot of expertise at B.C. Housing on the different renovations and expertise on building that we're doing and products. Coordinating that with the Homeowner Protection Office function along with the coordinated effort with regards to the building standards branch and the code are how we will actually drive the next agenda, which I described earlier, which is really dealing with the built environment for the future of buildings and housing in B.C.
S. Simpson: I'll get into that a little bit further when we get farther on in the bill.
Just one last question in relation to this section. Under "Board" functions, is it a fair assumption that those functions will essentially become the responsibility now of the board of B.C. Housing?
Hon. R. Coleman: Yes.
Sections 22 and 23 approved.
On section 24.
S. Simpson: This applies to some of the functions under that. Section 24 says: "For the purposes of this Act, BC Housing must (a) designate an employee as the registrar, and (b) designate one or more employees as compliance officers."
[ Page 3566 ]
Could the minister tell us, currently, how many compliance officers there are in the Homeowner Protection Office?
Hon. R. Coleman: About five or six.
S. Simpson: I should have probably been more specific — that that would be five or six. The minister could maybe just clarify in the answer to this next question that those are FTEs — five or six FTEs? And is the expectation that there will be an equivalent number of compliance officers brought in to provide these functions under B.C. Housing?
Hon. R. Coleman: The reason I say "five to six" is because that's what I'm told it is, approximately. Of course, it's more like an estimates question. But in reality for the member, the question is: is the same number of people coming over from Homeowner Protection Office? Is it still being the same number of people in the positions before and after? The answer to that would be yes.
Section 24 approved.
On section 25.
S. Simpson: I think I know the answer to this. Is this just a change of terminology and, essentially, "assessments" to "fees"? This is the $750, and it just changes the terminology but doesn't essentially change the reality of the dollar?
Hon. R. Coleman: That's correct.
S. Simpson: Just on section 25(b), which repeals subsections (2) and (3) on the collection of fees and then puts in place replacement information. Could the minister tell us essentially what the differences are between the new wording and the old wording?
Hon. R. Coleman: I'm not sure which portion of the fees the member was asking about, so I'm going to do both.
The section allows for B.C. Housing to be the recipient of the licensing fees now and also the recipient of the reconstruction levy, but it also recognizes that the fee established under section 20, more commonly known as a reconstruction levy, will continue to be collected by the registrar at the same time as certain licence fees come due. Since this fee supports the ongoing administration of the reconstruction loan program, it will be transferred to the Ministry of Finance for that purpose. It identifies that the fees are the same.
Now, if somebody's going to write a cheque for their licensing fee, they would write it to B.C. Housing, rather than to Homeowner Protection Office, because that Crown will no longer exist — the same thing with the reconstruction fee. It also identifies that those fees are transferred to Finance for the reconstruction loan program — the reconstruction loan portfolio now.
S. Simpson: Hon. Chair, I think that I'm good for 25.
Section 25 approved.
On section 26.
S. Simpson: Section 26 creates section 10.1, which seems to lay out in some more detail the responsibilities around residential builders, how they pay and what happens in the instances should they not pay their appropriate fees as prescribed under the section.
Could the minister tell me…? The remedy is here. It's my understanding that if fees are not paid, then the registrar, presumably, who's here, would have the ability to lift the licence of the builder in the province.
Hon. R. Coleman: That's correct. If they don't pay their fee, we can take their licence.
S. Simpson: If you have the situation where you have a builder, they're delinquent in their fees and then the government takes action to deal with this, to either suspend or to impose some restrictions, what might that include? Because I think the registrar…. It says here: "…may be cause for the registrar to refuse to issue or renew, or to suspend, cancel or impose restrictions on, the licence of a residential builder."
I understand suspension of the licence or cancellation of the licence. What kind of restrictions did the minister have in mind? I understand the other ones. They're pretty clear-cut. You cancel it or you suspend it. The restriction is a little less clear. What kind of restrictions might we be looking at?
Hon. R. Coleman: It might be something like: we would impose additional oversight on behalf of the warranty company with regards to a particular builder that there were a lot of complaints about or something like that, whereas they're actually paying their licence fee, but there may be other issues around the particular builder.
It is something that we would like to, frankly, improve on as we deal with the warranty program going forward, to just be able to have that ability or use that ability in the future. These provisions, by the way, are the same, basically, as they were in the previous act. There's no real change here.
S. Simpson: Under 10.1(3), it says: "If the registrar is satisfied that the new home for which a residential
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builder paid a fee prescribed under section 26 (1) will not be constructed, the registrar may refund to the residential builder the amount of the fee and any interest paid on the fee."
Could the minister tell us why the choice of the word "may" versus "shall" or "must"? Assuming that…. And this acknowledges that under section 4 it says if there's outstanding money owed to the Crown, obviously, it might be taken for that purpose. Why else would it be "may" and not "shall"?
Hon. R. Coleman: My experience with legislation is that "may" and "shall...." "May" gives you some flexibility within the law when you're dealing with legislation, and that's why it's usually written in that term.
This does allow, though, that we may refund the construction levy fee of a new multi-unit development, for instance, on which fees were paid but it was not built. So you wouldn't take the reconstruction loan fee and use it if the building wasn't built. If they didn't go ahead, then we would be able to refund the fee.
S. Simpson: Now, if I understand, this is related to the fee on a new home. That's presumably the $750 that we're talking about here. So the builder is going to build a new home and writes the cheque to the Ministry of Finance for $750 in order to get the appropriate approvals to build this home. A month later, for whatever reason, the home's not going ahead, and this says "may." So what conditions might exist that would result in this person not getting a refund of their $750 cheque?
Hon. R. Coleman: It's hard to speculate, but it could be a situation where a building gets partially built and then goes into receivership. At that point in time, you'd want to do an assessment on whether you should be refunding the reconstruction. I don't want to speculate on specific cases, but it does at least allow some flexibility to look at the circumstances in some regards where you would want to continue to hold the levy.
Section 26 approved.
On section 27.
S. Simpson: Section 27, essentially, is the creation of the Industry and Consumer Advisory Council which, as the minister pointed out earlier, replaces the advisory council that was put in the earlier definitions as a body.
The advisory council is essentially appointed by the chief executive officer of B.C. Housing. It doesn't reference in here, I don't think — I might have missed it, but I don't think I did — in terms of numbers of members of the advisory council. So I take it that it's a number that is at the discretion of the chief executive officer.
Could the minister tell us why there wasn't a number established for the advisory council?
Hon. R. Coleman: Because this is how it was before. This doesn't change, as far as the number. The advisory council was made up of a little over 20 members in the past. The section does outline that the participants have to be from the residential construction industry, including architects, engineers, owners, representatives of local government. The only change here is adding some consumers to the advisory council.
The actual way it's set up and how many members, the decision of how many members…. Actually, this is just a section that was established in the original act set down in 1990-whatever-it-was.
S. Simpson: We all learn things as we grow older. We try.
The selection of participants, and it lists…. It says that the CEO will appoint the members, but it does give us a bit of an outline as to where they may come from: "(a) participants from the residential construction industry, including architects and engineers, (b) owners, and (c) representatives of local government."
Is there any expectation — maybe the question is better put this way — as to whether those groups get to specifically put forward names for this body, or is it totally at the discretion of the CEO?
Hon. R. Coleman: Just so that we're clear, the chief executive officer of the HPO has always appointed this group and has always basically asked sectors for representatives that they would like to put forward to be on the advisory council, and that wouldn't change. We'd continue to do that, and we'd probably have an advisory council in and around the same numbers as we've had in the past.
So in this case, we're actually continuing what has been done for a number of years, with the exception of adding some consumers to the advisory council.
S. Simpson: The section that explains the makeup of the advisory council and how chairs and vice-chairs get designated is silent on the question of transparency and, in particular, whether minutes of meetings or other reports prepared by the advisory council will be public information. Could the minister tell us why it's silent on that and whether you expect that information to be public?
Hon. R. Coleman: However they've operated in the past, they will continue to operate in the future. This section doesn't change anything. We'll just continue along that way. I can check with regards to the publication of minutes for the member, but I'm not aware of how that was done. This is really an advisory council for
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the body to go back to the CEO with stuff for industry and that sort of thing to actually try and improve the operations.
I don't think there's any issue around what they might give advice on, so I don't know why there would be issue otherwise. So I can check into that for the member.
S. Simpson: I'd appreciate if the minister could do that, because if we get down to 10.2(5), it says: "The purpose of the Industry and Consumer Advisory Council is to provide advice to BC Housing and the chief executive officer on all matters coming within their areas of responsibility under this Act."
The reason I look forward to some sense of the transparency of that advice is that, should we at some point in the future have some points of disagreement about decisions that B.C. Housing makes in this area, it may prove important or instructive to be able to look at the advice that the council gave to the CEO and to B.C. Housing in making those decisions.
I'm not aware, either, of what the current practice is at the HPO, so I would look forward to getting that information. We'll either get it now, or we'll get it in estimates. I'll leave it at that for that section.
Sections 27 and 28 approved.
On section 29.
S. Simpson: Section 29 is the section that outlines or provides some more detail around the research and education function that will now exist under the auspices of B.C. Housing. I guess it takes me back a little bit.
I hope I'm not revisiting things that we talked about earlier, but when I read through what B.C. Housing is responsible for in research, it talks about "establishing and maintaining expertise in building science, especially as it applies to British Columbia and the British Columbia Building Code." Maybe we'll just start with that one.
Is it the minister's expectation in building science...? It comes back to the green buildings question and all those matters that I know are on the minister's agenda as well as the government's agenda. Is it now the responsibility of B.C. Housing to be the source of expertise around those building and construction matters as they relate to new efficiencies and new ways to build?
Hon. R. Coleman: As I said earlier, not by itself. That's why we want to integrate this across government.
To the member's earlier questions with regards to industry and its input to the advisory council, my experience, having been the minister and also the critic in this field over the last 14 years, is that this industry never hesitates to give its advice, usually in a public forum, without ever having to worry about having been to some committee.
They actually feed into government and opposition on a regular basis and into industry, whether it be architects, engineers, builders or building representative organizations and those sorts of things. The member is probably well aware of that.
The provision. Basically, B.C. Housing will be part of the group that will, with the Homeowner Protection Office on the research side, come back with recommendations that would be integrated into the overall built environment as we apply the building code. The code is the responsibility of the building and safety standards branch within the Ministry of Housing and Social Development.
The HPO is a partner with us in looking at technical changes and improvements to the code and to the built environment as we integrate this thing into a level that we can actually drive, frankly, a more streamlined agenda and affordability in housing in the future.
S. Simpson: These responsibilities, the research and education responsibilities, as laid out in 12 here. There are a number of them. There is this question around building science, effective building techniques and processes, cooperation with other organizations in establishing best practices, consumer education and "other research and education functions consistent with this Act."
I know that the decision of this legislation, I think…. And I look forward to the minister's clarification on this. The decision was made to remove a director of research and education and put in its place a research and education function that isn't necessarily attached to an individual who carries a title.
Could the minister tell us: is it his expectation that the fulfilment of these responsibilities under B.C. Housing is going to be partly done internally by B.C. Housing officials and staff who will perform some of this function, and will part of it be contracted — research and education that the corporation will go outside to purchase? Is that the expectation?
Hon. R. Coleman: All the existing research and education people at the Homeowner Protection Office are coming over. Because we already have an existing structure, we don't believe we need to just identify something by title. That doesn't actually bring results in by itself.
Most of the research side of the work that the Homeowner Protection Office has done over the years has been in relationship to third-party research. It could be BCIT. It could be someone like Forintek, through UBC. I don't know if we do anything with them, but I know that in some other aspects we do. It can be with some of the homebuilder organizations or architects and engineers.
We have built that integrated relationship with them already on R and E because those are the folks that
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are in the field with the education and the expertise, so we actually do fund relationships with them with regard to that. A lot of it is in a third-party relationship or a second-party relationship with us that then feeds into the Homeowner Protection Office, feeds into the building standards branch, feeds into the built environment as we look at code changes and new ways of building and those sorts of things so that products can be tested.
It is not realistically possible to have an agency like the Homeowner Protection out doing product testing. Product testing can be done by CSA. It can be done by other Canadian standards types of measurements. It can be done by North American and European standards measurements.
All of those things have to be coordinated back into a built environment. This relationship is really where we do actually contract to those levels of expertise to give us feedback on product and services that are to improve the built environment.
Sections 29 to 31 inclusive approved.
On section 32.
S. Simpson: Section 32 of this essentially takes what was the loan program — the reconstruction program, as it was called — and essentially rewrites that section. I think I understand what this is.
So can the minister just clarify that what this section essentially does is take what was a reconstruction program, removes those aspects of it that would allow for new applications and that, and just creates a definition or a section that allows for existing residences or properties within the portfolio to be able to be finalized and completed here?
Hon. C. Hansen: That is correct.
Section 32 approved.
On section 33.
S. Simpson: Section 33 is the section, I believe, that sort of puts in place the fee — what was the assessment and is now essentially the portfolio fee. That fee was, I believe, $750 per new property. Does this section have any material differences to it other than changing, essentially, the name to a fee from an assessment and still saying that those moneys will come forward as they did in the past for new construction?
Hon. C. Hansen: The only material change is the sections that pertain to default, and that is now reflected in a different section of the act.
Section 33 approved.
On section 34.
S. Simpson: We'd had some conversation about this earlier, in relation to other things, with the movement of the portfolio from Housing and Social Development and the HPO over to Finance.
It says here, "The Minister of Finance or BC Housing as agent for the Minister of Finance may approve an application for a reassessment of financial assistance," etc., as long as certain conditions are met.
Is it the expectation that, in fact, the kind of on-the-ground assessments, valuations — any of that work that might lead to reassessment — will be the responsibility of B.C. Housing to do and then advise the Ministry of Finance as to the appropriateness based on the legislation, then for Finance to approve, or not, any applications for reassessment?
Hon. C. Hansen: This would apply to a very small number of cases where there is a file in process, where there may be a need for a reassessment to be done on the extent of the damage or the extent of the loan. B.C. Housing would provide advice to the Ministry of Finance, and we would be responsible for administering what the amendments may be to that particular file.
Sections 34 to 40 inclusive approved.
On section 41.
B. Ralston: This section, or this proposed amendment, refers back to an earlier discussion that we had about the onset of the international financial reporting standards. This appears to be a consequential amendment under the Hydro and Power Authority Act that would be in line with the previous amendments that we discussed which would authorize and direct the Treasury Board and the comptroller general to direct B.C. Hydro and the B.C. Transmission Corporation to acquire with alternate accounting standards. Is that correct?
Hon. C. Hansen: Yes.
Section 41 approved.
On section 42.
B. Ralston: This proposed amendment begins a new series of amendments that relate to the Insurance Corporation Act. The first amendment proposed in section 42 refers to the MCT guideline.
It gives as a definition: "the Guideline for Minimum Capital Test (MCT) for Federally Regulated Property
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and Casualty Insurance Companies…." That guideline is in the form that…. I found it on the Office of the Superintendent of Financial Institutions Canada website. It's called a draft guideline. It's dated March 2010.
Will the minister confirm that this is a guideline intended to deal with federally regulated property and casualty insurance companies and that the guideline being referred to is a draft guideline? At least that appears to be the most current version that I was able to locate.
Hon. C. Hansen: There is an existing guideline that is in place. It was established in March of 2008. As the definition states, this may be amended or replaced from time to time. Until such time as the draft guideline, as posted, is finalized and formalized, the March 2008 guideline would be the one that we would be using.
B. Ralston: This applies to federally regulated property and casualty insurance companies. Can the minister confirm whether or not the Insurance Corporation of British Columbia is a federally regulated property or casualty insurance company?
Hon. C. Hansen: The answer is no. ICBC is not federally regulated. Otherwise, this whole application of the MCT guideline would be automatic. We have chosen to use this guideline as the standard by which the ICBC optional insurance would be administered.
B. Ralston: Well, I'd like to pursue that a bit further, because what the minister is saying is that this is a voluntary assumption of an obligation to follow these guidelines and the new draft guideline that's coming out.
Yet the minister said in Hansard on March 4: "It's not the government's role to determine what the cash reserves should be. It's not the ICBC board's role to determine what the cash reserves should be. These are actually dictated by international standards within the insurance community."
The minister seemed to suggest by that response in question period that there was, by the choice of the word "dictated," an obligation on the part of ICBC to follow those standards. Would he agree that perhaps that was somewhat inaccurately phrased?
Hon. C. Hansen: I think if the member took that interpretation, that was certainly not the interpretation that was intended. What the ICBC act actually states is that the board of ICBC and the corporation have to follow established practices. This federally established MCT guideline is one of those practices. For certainty, we are actually, in the legislation, dictating that this is the MCT guideline that ICBC should be following in the future in terms of meeting its obligations.
B. Ralston: Just in further pursuit of these minimum capital guidelines, ICBC's compliance with those is voluntary. The minister referred to a guideline dated in 2008.
As the minister, I'm sure, is aware, since the global financial crisis the Bank for International Settlements, Basel II and the international insurance organizations are reviewing the capital adequacy required in regulation for insurance companies. It would seem that a standard that's set in 2008 might not be the one to follow, but that seems to be the one that the minister is advocating and that was followed in deciding to withdraw cash reserves from ICBC over the next three fiscal years.
In Canadian Underwriter magazine it says that the OSFI, the Office of the Superintendent of Financial Institutions, is focusing on capital adequacy measures, and they are particularly citing including property and casualty insurers as a key focus. They started work on their minimum capital test in 2008, and they have decided that they are going to look at post-implementation issues associated with the Basel II capital accord and the transition to international financial reporting standards.
It would seem to me, given the financial crisis, the transition to new Basel II capital standards, the transition by OSFI and a focus on the capital adequacy of those companies, that by relying on what I think it would be almost certainly agreed universally in the industry may well be an outmoded capital standard, the minister may have dictated to ICBC the extraction from ICBC's capital reserves capital in excess of what prudent regulators are now advising. Would the minister care to comment on that?
Hon. C. Hansen: As I noted, this wording actually allows for the guideline to change over time. The draft guideline that has been posted on the website does apparently reflect the discussions that the member alluded to that have been taking place internationally. If that new guideline is adopted, then this allows for that transition to the new guideline from the March 2008 one.
I think the other thing that's important to underscore is that we have not, as government, mandated how much ICBC is to transfer in excess capital. What we have done is we have estimated how much that would be over the coming three years, given what we anticipate to be the minimum capital test. If the minimum capital test were to change as a result of the adoption of new guidelines, then we would alter our estimate and our calculation of the amount that ICBC would transfer to the province based on that new guideline.
B. Ralston: Well, the minister says that there's been an estimate provided of the minimum capital test. I'm
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wondering if the minister can confirm whether or not the report prepared by the property and casualty MCT advisory committee entitled Key Principles for the Future Direction of the Canadian Regulatory Capital Framework for Property and Casualty Insurance, dated January 2010, was taken into consideration in the decision to arrive at this estimated minimum capital.
Certainly, the changes that are proposed…. Here there are key stakeholders developing a new capital adequacy regime which is responsive to the financial crisis that we've just gone through and would perhaps result in a more conservative estimation of regulatory capital that's necessary for the ongoing operations of an insurance company in the insurance lines that ICBC is in.
In setting or making those estimates of regulatory capital, did the minister or those acting on his behalf take into requirement the changing regulatory landscape of the property and casualty interest, even if these guidelines are only voluntary as they apply to ICBC?
Hon. C. Hansen: In calculating the estimates — and again, I underscore that these are estimates in terms of what the excess capital is that ICBC would have on its operational side — we have based that on what we know, and that is the existing guideline established in March of 2008.
As I mentioned before, if that minimum capital test guideline were to change as a result of the adoption of new guidelines, then the actual amounts that would be transferred from that excess capital would change, based on that new information.
B. Ralston: The minister also said in Hansard on March 4, 2010, in response to questions directed by myself: "The reserves that the ICBC had on the optional coverage were far in excess of what those national and international standards would require." Can the minister advise what he meant by "international standards"?
Hon. C. Hansen: I think the primary measure that we utilize is the national guidelines, the national test that would be there. That establishment of a minimum capital test for Canada, which is what we reflect and which we are planning to utilize, is certainly consistent with approaches taken internationally.
B. Ralston: I found it odd, upon review and some research, that the minister would refer to an international standard, since according to the joint forum of the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the International Association of Insurance Supervisors, which undertook a review of the differentiated nature and scope of financial regulation and issued a report in January 2010:
"A uniform minimum global capital standard does not exist for the securities and insurance sectors. The BCBS's core principles alone incorporate the requirement for a uniform risk-based capital standard to reduce competitive inequalities across countries and to safeguard financial stability. IOSCO and IAIS expect supervisors to promulgate capital requirements, but they do not have a single global capital standard for their respective sectors."
The minister's reference to an international standard — and, I think, suggesting that there was some compulsion or obligation or necessity for that to be followed — would appear to be at variance with what the international regulator of the Bank for International Settlements recognizes — that it does not exist in a uniform fashion.
Would the minister….? I notice in his answer that he seemed to retreat substantially from the reference to international standards. Does he wish to further reconsider or qualify his answer given on March 4 to the House?
Hon. C. Hansen: No.
B. Ralston: Just to be clear, then, in this proposed amendment, section 45, "capital available" and "capital required" mean what is described in the MCT guideline. It doesn't specify which year or which version of the MCT guideline is being referred to. The minister has referred to the 2008 MCT guideline, and it is voluntary. ICBC has agreed, I suppose, to voluntarily adhere to that guideline. Can the minister confirm that that's what he is referring to?
He refers to that definition as incorporating future change, yet there is no definition, unless I've missed it, of the MCT guideline. It's simply referred to in that fashion in that particular proposed amendment. Can the minister confirm that the words that he has used to describe the guideline, that what he means by MCT guideline is the 2008 guideline? Can he describe what the process will be of moving to a new guideline when it is promulgated?
The Canadian Underwriter says that they expect that OSFI's objective on IFRS and other issues "is to issue final guidelines, advisories and reporting returns to the industry by mid-2010." Very shortly there will be a new guideline, it looks like.
Hon. C. Hansen: Just to repeat what I said earlier, this section 42, the definition for MCT guideline, is pretty explicit. I'll read it for the benefit of the member: "…means the Guideline for Minimum Capital Test…for Federally Regulated Property and Casualty Insurance Companies issued by the Office of the Superintendent of Financial Institutions Canada as that guideline is amended or replaced from time to time."
I think it's pretty clear. As it stands today, that is the guideline from March of 2008. The moment at which
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they adopt a new guideline, that is the new guideline that would be applicable.
B. Ralston: Can the minister advise whether his officials, either in the Treasury Board or in the ministry more broadly, have examined the impact of the draft guideline of March 2010 upon the calculations or the estimates of excess regulatory capital that are discussed in the ICBC service plan?
[L. Reid in the chair.]
Hon. C. Hansen: The estimates that we have reflected actually come from ICBC — so the calculations in terms of what that excess of capital would be, given the March 2008 guidelines. Those calculations come from ICBC.
I don't know this for certain, but I would be surprised if officials within ICBC were not tracking some of the discussions around the MCT guidelines and the draft proposals that are there. I'm sure that when those are finalized, they will again do new estimates to provide to us as to what that excess capital would be.
B. Ralston: Can the minister confirm, then, that there is no mechanism in the Treasury Board to analyze information such as the calculation or estimates of the minimum capital required by ICBC, that there's no calculation or review of that or staff that have that kind of expertise within the Treasury Board or the comptroller general's office, that what ICBC advances to the ministry is simply accepted at face value?
Hon. C. Hansen: First of all, initially, the estimates would be done by actuaries in ICBC. When it comes time to do the actual calculations, again, that would be done by the actuaries in ICBC and reviewed by an independent outside actuary. Based on the due diligence that would go into that process, we would accept the calculations on that basis.
B. Ralston: Just so I understand the process. The minister has stressed in his public comments on this issue that the extraction of what he terms "an excess cash reserve" is going to be used to offset government borrowing and therefore will be a savings to the taxpayers. Obviously, this has an impact on the overall budget, at least on the capital plan.
Can the minister advise, then: the independent actuary who assesses the calculations of ICBC — is that someone hired by the Ministry of Finance? Is that someone hired by the comptroller general? How does that process work?
We're obviously dealing with very, very big numbers here — over $800 million — and a single shift of even less than a percent can mean millions of dollars, I would think. Obviously, these calculations are fairly important. They're part of what the minister has termed "the borrowing requirement." Can the minister advise, then, how this process works?
Hon. C. Hansen: The independent auditor would be selected by ICBC and would perform that responsibility in accordance with federal guidelines. That, in turn, would be subject to review by the auditors for ICBC.
B. Ralston: I note in the guideline that the superintendent — and this is the reference to the superintendent of financial institutions, the federal regulator — "may, on a case-by-case basis, establish, in consultation with an institution, an alternate supervisory target level based on an institution's risk profile."
Obviously, that gives a fair degree of discretion. ICBC is only conforming voluntarily to these guidelines. How would the minister describe ICBC's risk profile, and would there be an opportunity, even within the voluntary assumption of these guidelines, to set a different level than the strict MCT guideline that appears to have been followed in calculating the minimum capital test in this particular case?
Hon. C. Hansen: I'm advised that these powers of the superintendent would really come into play in the case of a new insurance corporation that is being established and that it would be highly unlikely that there…. Well, we can't anticipate a circumstance whereby these particular powers of the superintendent would become applicable to ICBC.
B. Ralston: Just to continue, as I understand the proposed new section 26 of the Insurance Corporation Act, the MCT guidelines would apply only to the optional insurance business of the corporation. As I read through, particularly the definition of management target, optional capital available and optional capital required, those definitions appear to refer only to the optional side.
Can the minister confirm, then, or not? Do the MCT guidelines not apply to the other side of ICBC's business, the mandatory insurance side?
Hon. C. Hansen: The member is correct. This requirement to follow the federal MCT guideline applies only to the optional coverage. When it comes to the basic insurance coverage, that is the minimum capital requirement as established by the B.C. Utilities Commission. Of course, on the basic side, ICBC is subject to the B.C. Utilities Commission's directions.
B. Ralston: I thank the minister for that response. Given that the MCT guidelines are only voluntary in the sense that ICBC is assuming them voluntarily, with
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this legislation that will direct them, is there any particular reason why the B.C. Utilities Commission was not invited to regulate the optional side? Is there some regulatory or jurisdictional barrier to that?
Hon. C. Hansen: First of all, to the member's specific point, the optional insurance provided by ICBC is operating in a competitive environment. It is the marketplace that they need to take into consideration in establishing their rates.
In the case of the basic insurance, it is operating in a monopolistic environment where everybody who has a motor vehicle that they operate in British Columbia and who's a resident of British Columbia must have, by law, basic insurance coverage provided by ICBC. Therefore, it is entirely appropriate that we set up a structure — and in this case, it's the B.C. Utilities Commission — to determine what their minimum capital requirements are and to determine what their rates would be.
B. Ralston: I thank the minister for that response.
Well, perhaps I'm not understanding the role of the Utilities Commission. If it is only to deal with utilities that are in a monopolistic environment, then one would not understand why independent power projects are dealt with by the Utilities Commission when we have the assurance of the government that that is a competitive environment. I'm not quite following the minister's logic in that respect, and perhaps he can clarify his remarks.
The minister has mentioned that ICBC will be obliged, when this amendment passes, to follow the minimum capital requirements of a federal regulator but is not obliged and is not expected to by law. Is there expected to be any contact between OSFI and the optional side of the Insurance Corporation of British Columbia? Or are they merely emulating at a distance the guidelines and having no contact with the regulator federally, since it would appear that the federal regulator has no jurisdiction over them?
Is it a remote, I suppose, tracking of the federal guideline, or is there anticipated to be any contact between OSFI and ICBC even if only on a courtesy basis?
Hon. C. Hansen: Well, first of all, I'm not sure what the member might mean when he talks about whether or not there is contact with OSFI. What we are saying by applying this MCT guideline is that we are following the MCT guideline that has been established, as set out in this provision, but it does not in turn lead to OSFI having regulatory powers over ICBC. It is simply that in legislation, we are mandating ICBC to follow that guideline.
B. Ralston: Can the minister then confirm that ICBC's competitors on the optional side are federally regulated insurance companies and that they're obliged to follow the OSFI minimum capital requirements? Is that the reason why the government has chosen to implement this minimum capital guideline, even though OSFI has no jurisdiction over ICBC?
Hon. C. Hansen: The short answer is yes. Those private insurers that are competing with ICBC on the optional coverage side would be subject to OSFI. Therefore, it is entirely appropriate that in order to ensure that that level playing field is there, ICBC should follow the same guidelines.
B. Ralston: Can the minister describe how this proposed legislative change has been received by the private insurers in the optional field?
Hon. C. Hansen: I have not had any discussions with any representatives of the private insurance industry on this matter, and to the best of my knowledge, there has been no communication to my office on it.
B. Ralston: I think it's well known that the private automobile insurers have lobbied over many years to make further entries into the automobile insurance market here in British Columbia. I have certainly been lobbied here in the Legislature by representatives of the private insurance insurers or private automobile insurance insurers on the days when they come over to Victoria. Can the minister confirm that their representations have played a part in making this legislative change?
Hon. C. Hansen: No. In fact, the opposite is true. The answer is no.
B. Ralston: That answer is a little bit Delphic, if I can put it that way. Perhaps the minister could clarify what he means by "the opposite is true."
Hon. C. Hansen: How much more clear can you have than no? But if the member would like me to elaborate, I will elaborate. If he is implying that somehow the private insurance industry came to us asking us to make this change, that is not true. I have never received any such representations.
B. Ralston: Can the minister then explain, beyond helping the government meet its financial plan in some very tough budget years, how these proposed minimum capital requirements for the optional side are good for British Columbians and for those who insure their automobiles here in the province?
Hon. C. Hansen: It is obviously no secret that we are out borrowing more funds than we have had to in
[ Page 3574 ]
previous years, partly because of the very significant infrastructure build and accelerated capital projects that we're engaged in, in every corner of the province. Those need to be funded, and they get funded by issuing bonds and incurring debt to the province.
We are also in a couple of years of deficit, from the operating budget side, and that too has to be funded.
So to the extent that we have agencies within the government entity that are sitting on excess capital…. For us to be able to access that excess capital reduces the requirement for us to go out to markets and borrow money. Therefore, that is a savings to the taxpayers in terms of what we would otherwise be paying out in interest costs.
B. Ralston: Well, the minister has described what he calls surplus capital in the optional side of ICBC's business, yet this legislation makes it mandatory for that to be transferred over, and it gives a calculus for deciding that amount.
Why was this legislation necessary when one would think that ordinary good relations between the board of ICBC, the management of ICBC and Treasury Board — and open discussion — would make the need for legislation superfluous? I'm wondering why the minister has chosen to advance this agenda using legislation rather than by frank discussion and the concurrence of all sides.
Hon. C. Hansen: The provisions that were in the Insurance Corporation Act previously actually do allow for the Insurance Corporation to transfer funds to the province. Many of those provisions actually go back 35 years, to when the Insurance Act was first established.
What this provision does is it sets more specificity to it to determine exactly rather than having it as an ad hoc calculation in terms of what would constitute excess capital. This actually puts a framework in place that gives certainty to that and ensures that that level playing field with private sector corporations in the optional field is maintained.
B. Ralston: Well, just as the minimum capital test is a guideline in its impact on ICBC, why couldn't this have been dealt with by administrative guidelines rather than through the legally much more robust form of legislation, making it mandatory for the board and the management to hand over the money?
I detect a disagreement between the board and management of ICBC and Treasury Board and the minister. Can the minister confirm that?
Hon. C. Hansen: I think there are two things. First of all, this provides more certainty to ICBC. It also provides for an objectivity in how that calculation is done. This isn't coming up with a number of excess capital that somehow a determination of Treasury Board or the board of directors…. This actually establishes a calculation by which the value of that excess capital is determined.
B. Ralston: Why was it never thought necessary to do that until this year, in a particularly tough and challenging budget year?
Hon. C. Hansen: The question with regard to the excess capital on the optional side has been under discussion for a couple of years now, but I think what we have seen over this last period of time is that the excess capital grew considerably, particularly because of their successes on their investment side.
It was determined that given the fact that we are now into the markets borrowing funds at a greater degree than we had in the past, it becomes all that much more obvious, I think, that there is a benefit to the taxpayer by transferring this excess capital to reduce the province's borrowing requirements.
B. Ralston: Did the minister consider, in drafting this legislation, the option of allowing ICBC to return dividends to individual policyholders on the optional side — in other words, reduce the cost of their insurance, even if only marginally, over several years?
Hon. C. Hansen: The answer is that we looked at all options in terms of how this excess capital might be dealt with. We felt, at the end of the day, that the most appropriate action to take was to ensure that this excess capital should be used for the benefit of all British Columbians, because it is, in effect, all British Columbians that are in essence the shareholders of ICBC.
It is all British Columbians that should benefit. They do so by the fact that we are reducing the cost of our debt and our interest cost, and that results in more funds being available for the health care and the education and the other programs that all British Columbians enjoy.
B. Ralston: Can the minister say whether the option that's being pursued in this legislation…? I just want to confirm this. If the minimum-capital-test guideline changes, the amount of the capital that's transferred from ICBC to the government may change.
What contingency plans has the minister built in for the prospect that the capital requirement may be different and therefore lead to less surplus being available? Obviously, that would have an impact on the proposed surplus that the minister plans to extract for the purposes that he's described.
What's the contingency plan to deal with that, should the MCT guideline be changed? Clearly, it's under dis-
[ Page 3575 ]
cussion and may well be different, given the recent financial turmoil in global markets.
Hon. C. Hansen: If the MCT guideline were to change, then obviously that would have an impact on the calculation of how much excess capital might be available for transfer to the province. Whether that goes up or goes down would impact the amount that we would have to borrow to cover our other responsibilities. So if we wind up with more that is being transferred than we have estimated, then that will reduce our borrowing requirements. If we wind up with less, then we would have to increase our borrowing requirements.
B. Ralston: The minister has described my question very accurately. I suppose I'm asking: what is the contingency should that take place, particularly if less capital is available and will impact upon the borrowing?
Has that been contemplated as a real contingency in the capital plan and the numbers that are set out in the ICBC service plan?
Hon. C. Hansen: We have contingencies built into the fiscal plan, both on the capital side and on the operating side. In the case of the capital budget, if we had less dollars that were being transferred from ICBC, we would have the choice of going out and borrowing more than we had otherwise anticipated to cover those requirements.
That would have an impact, obviously, on the cost of servicing the debt. On the other hand, we would also have the option of not tapping into the capital contingency as much as we otherwise would in order to reduce the borrowing requirements of the province.
Also, in terms of the volatility of the interest on the debt, that's driven by a whole bunch of factors, not just what may or may not be transferred from ICBC. It will be driven by interest rates. It will be driven by the timing and maturity of our existing bonds. We have flexibility within the fiscal plan to deal with those possible changes.
B. Ralston: Earlier I posed a question to the minister which he didn't answer, so I do want to ask it again. Was there a difference of opinion between the ICBC board and management and the Treasury Board and the minister about whether it was necessary to bring in legislation to accomplish this purpose? Would he care to comment?
Obviously, the legislation is there, and I expect the corporation, both management and board, will comply with it. I sense that there was a difference of opinion and that it was resolved by bringing in this legislation. Would the minister care to comment?
Hon. C. Hansen: We proposed the legislative changes. There was no disagreement from ICBC. In fact, they participated with us in the drafting of the bill that is before us today.
Section 42 approved.
On section 43.
B. Ralston: This amends section 8.4 of the Insurance Corporation Act. This appears to give the Lieutenant-Governor-in-Council — that is, the cabinet — the power to direct the setting of reserves that the corporation considers desirable.
Can the minister explain that in conjunction with his earlier reference to the setting of reserves on the mandatory side, if I can put it that way, by the Utilities Commission? I don't understand how this particular section fits with that regulatory environment.
Hon. C. Hansen: What this provision provides for…. It does not impact on the calculation of how much would be excess capital. What it does is allows for the Lieutenant-Governor-in-Council to establish the schedule by which funds that are determined to be in excess would be transferred to the consolidated revenue fund.
B. Ralston: The minister has made reference in his remarks to the proposed legislation setting a less arbitrary standard in the sense that there is a reference point, being the minimum capital guidelines. I'm wondering if this authorizes the cabinet to set that schedule without reference to the minimum-capital-test guidelines. Or is that in conjunction with those guidelines?
Hon. C. Hansen: In conjunction with.
B. Ralston: Given what the minister said, can the minister then point to that part of the amendment that makes that clear? Is it the word "regulations," or is it the reference to section 26? I'm not clear how the minister arrives at that interpretation.
Hon. C. Hansen: In the new wording proposed for section 26 that the member will find when we get there under section 45 of this bill, it actually says explicitly that "the payment must not result in the ratio of the corporation's optional capital available to the corporation's optional capital required falling below the ratio that is the management target."
In other words, it is the application of this regulation that we're discussing, and the ability of the Lieutenant-Governor-in-Council cannot exceed what would be determined by that capital requirement.
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B. Ralston: Well, perhaps we'll deal with section 45 when we get to it. But the minister, then, is equating in his answer the term "management target" and the term "MCT" — minimum capital test — "guideline." Is that what the minister says this section means? Is that how he proposes that that be interpreted?
Hon. C. Hansen: The MCT guideline tells you how to determine the management target. But I also draw the member's attention again to section 45, which we'll get to, which sets out a specific definition for management target.
Sections 43 and 44 approved.
On section 45.
B. Ralston: Since we were discussing it, the answer to the question is…. It appears that the MCT guideline in the management target definition that's set out there is only one aspect of the management target. It appears to have another…. There's a section (b) that speaks of a "margin, determined by the corporation's actuary." Would the minister agree that it wouldn't be strictly accurate to equate the MCT guideline and the management target?
Hon. C. Hansen: The MCT guideline actually requires the corporation to take into account the risk profile. The MCT guideline is the basis for the calculation, as I indicated in my previous answer. But the MCT guideline itself requires that the corporation take into consideration their risk profile in establishing a management target.
B. Ralston: Can the minister advise, since we did speak earlier this afternoon — it seems a long time ago now — about the impact of the international financial reporting standards upon the Insurance Corporation of British Columbia? Can the minister explain how the international financial reporting standards might impact on the calculation of the minimum capital test and the management target?
Hon. C. Hansen: The IFRS, and the direction internationally that IFRS appears to be going, was certainly taken into consideration in the drafting of the new draft guideline that the member referred to earlier. That new guideline would determine how, once it's implemented and if it's implemented…. It would be reflected in the calculation of the surplus capital in the future. Therefore, IFRS would have that impact on potentially changing how those calculations would be done.
Section 45 approved.
On section 46.
B. Ralston: I'd ask the minister to explain the legal mechanism that's being developed here. It would appear to be authorizing the Lieutenant-Governor-in-Council — that is, the cabinet — to issue directives to the B.C. Utilities Commission regulating and fixing rates, and there are a number of other powers that this would grant to the cabinet.
Can the minister confirm that that is indeed the effect of this — to give the cabinet authority to give directions to the B.C. Utilities Commission, much in the manner that directions are given to B.C. Hydro, for example?
Hon. C. Hansen: This particular provision, actually, allows us to reference the MCT guideline in future orders-in-council that may be approved by the Lieutenant-Governor-in-Council. What this does is avoids having to rewrite the definition in each order-in-council or issue a new order-in-council if the federal guideline is amended from time to time.
Section 46 approved.
On section 47.
B. Ralston: This is an amendment to the Land Title Act, and it appears to be a consequential amendment as part of the transfer of the Homeowner Protection Office to B.C. Housing.
I'm not sure that I need the other minister. I think this is a relatively straightforward question. These are simply transitional provisions that are moving in association with the change that's contemplated.
Hon. C. Hansen: The answer is yes.
Section 47 approved.
On section 48.
B. Ralston: This is a section that may be of interest, certainly, to members of the Legislature, given that it deals with their pay.
Some questions have arisen about what the effect of this will be when these…. The legislation contemplates freezing increases in compensation for two years, but questions have arisen about what the effect will be when, if it does — certainly, it's contemplated by this amendment — the freeze comes off in two years. Will all the increases be caught up? Or will there actually be two years at zero, and then the cost-of-living increase would follow thereafter?
Can the minister explain what's contemplated here? Because certainly, there is some public interest in this issue.
[ Page 3577 ]
Hon. C. Hansen: This will mean that cost-of-living increases will not apply for the coming two fiscal years. Then once those two years have been completed, cost of living for that previous year would apply. In other words, there is no catch-up. The increases that are forgone during this two-year period are forgone forever.
Sections 48 to 58 inclusive approved.
Hon. C. Hansen: That is the completion of part 1, which is the non-tax provisions of Bill 2.
Noting the hour, I move that the committee rise, report progress and ask leave to sit again.
The committee rose at 6:23 p.m.
The House resumed; Mr. Speaker in the chair.
Committee of the Whole (Section B), having reported progress, was granted leave to sit again.
Committee of Supply (Section A), having reported resolutions, was granted leave to sit again.
Hon. B. Penner moved adjournment of the House.
Mr. Speaker: This House stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 6:24 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF
The House in Committee of Supply (Section A); H. Bloy in the chair.
The committee met at 2:33 p.m.
On Vote 21: ministry operations, $45,063,000 (continued).
The Chair: Just before we start, the Chair doesn't direct, but it's my understanding that the estimates will complete in approximately two hours because there are additional staff waiting.
D. Routley: I think some of that depends on the answers that we receive from the minister, but our intention is to at least loosely comply to that.
The Chair: That's fine.
D. Routley: Earlier we were discussing the Public Service Agency, and the last question was around reductions in executive pay or executive positions. The B.C. Liberal government no longer reports a breakdown of full-time-equivalents, FTEs, in the spring budget.
In September this minister said: "One of the reasons why that information wasn't included in the budget is that we're working on taking a more corporate approach in terms of the way that we look at workforce adjustment. Our plan is to publish a corporate HR plan this November, and those numbers will be included as part of the plan with adjustments as required."
I have a copy of something that recently appeared on the website called Being the Best 4.0, a corporate HR plan. Is Being the Best 4.0 the plan that the minister referred to in the last estimates?
Hon. B. Stewart: Just to confirm that, yes, the corporate HR plan is the one that you referred to. It was decided that because we were still working on that, we would still work corporately, but we were not finished in terms of the transition arrangements that we've been working on corporately. As such, they weren't included in that November plan.
D. Routley: Well, in the first place, Being the Best 4.0, if it is what the minister was referring to, was late in coming. The minister did promise a full breakdown of the FTEs — that they would be released in November. That hasn't happened.
Being the Best 4.0 — I'll be generous — is a very slight document. There is very little information. It's a very general and rather empty document in terms of what we had expected based on what the minister had promised. Is there another report available that could provide a full breakdown of the FTEs?
Hon. B. Stewart: Being the Best 4.0, as the corporate HR plan, is the overlying or overarching plan. But I want to just reinforce the fact that the Public Service Agency and the public service employees have been recognized recently this fall, as a matter of fact, as now being one of the top 100 employers in Canada. Our plans, leadership, workforce plans are regarded as the best in the country.
The substance of the individual plans has been left with the individual ministries, and each ministry has its
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own workforce plan that fits into its capital plan. Each of those is provided two staff through an Internet access, and there's a great deal of analysis and information in there about each of the individual ministries.
D. Routley: I think we'll leave the review of the quality of employment to others. This is a question about full-time-equivalents.
In the last estimates the minister promised to have a full breakdown by November. That hasn't been produced. What is the purpose of Being the Best 4.0, and how much did it cost to produce?
Hon. B. Stewart: The cost of the corporate HR plan is something that is not individually broken out because of the fact that it's done by three or four different people that report to the deputy of Citizens' Services. But one of the reasons that some of these numbers are not as certain is that we've been….
The member opposite may be well aware of the fact that even though we announced a reduction back in February of 2009 of up to 5 percent, and we had given notices, they've been significantly mitigated by the fact that we've been able to manage that through attrition.
And just so you know, there are about 1,600 employees within the public service that turn over through attrition and retirement annually. We've been fortunate to be able to use that to our advantage. So these numbers are in flux. We know the numbers we announced in February and the ones in September as well as the workforce adjustment in January, and those are all clearly available.
D. Routley: Well, what was promised in November was a full breakdown by ministry of FTEs, and that hasn't been delivered. I'd like to know how it is possible that every B.C. government before this one was able to regularly supply a full breakdown of FTEs, ministry by ministry, along with other budgeting information.
This government makes claims on management expertise, and yet what we see in this ministry is a falling down in the function of the ministry and a falling down in terms of reporting. I would like to know why it is impossible for the minister to stand here today and tell me and the people of B.C. through this venue exactly what the full-time-equivalent breakdown is, ministry by ministry.
Hon. B. Stewart: When we say that we're managing our workforce corporately, it means that we're thinking of our employees as one group of employees for all the ministries, and they share in that pool of employees.
As I've previously stated, we have an attrition and retirement rate of about 1,600. The workforce adjustments that we announced back in February of '09, to be less than 5 percent of the total workforce at that time, are being treated corporately. When we do start the process of doing that, the whole business of trying to find out where these people will end up and what positions are available comes into play.
In the past, and it's what you're referring to, the individual ministries kind of treated their employees as individual ministry employees. We are now treating them as one corporate workforce. That's the reason we don't have that number — as well as the fact that it's in flux while we're going through workforce adjustment, as you know. We've announced the numbers that we started with. Also, we work through that process to try to mitigate and make certain that we minimize that, but it's part of the overall notice period.
D. Routley: Well, the minister and the government can think of the employees any way they wish, but what previous governments have been able to do is actually tell the people how many people were employed by each ministry. If the government is making demands for budget cuts ministry by ministry, if the government is as intent on managing each ministry through this comprehensive approach, it seems to me that they would be more likely able to tell us how many full-time-equivalents there are, ministry by ministry.
That was the commitment of this minister. In fact, the minister indicated that each fall there would be a report produced on the full-time-equivalent staffing of each ministry. That would mean one this past November, which wasn't produced, and one this coming November. Will the minister commit to such reporting in the future?
Hon. B. Stewart: This change that we've moved to in managing our human resources corporately doesn't allow us that ability to report out while we're in this state of adjustments, as we've talked about.
You know, it's been stated clearly by the Minister of Finance about the difficult economic times. In terms of the freefall that we've been in for such a long period and the fact that we seem to have reached, hopefully, the bottom of that, we're trying to stabilize all of those numbers within ministries.
Again, we go back to the corporate entity, and as you probably well know, we started with somewhere over 30,000 employees. We've stated that we're managing within the 5 percent that was made clear in the budget of February 2009. The adjustments we've made are just over 1 percent.
Frankly, I'm not quite certain how this helps you understand the estimates, because most of the FTEs are a budgeted number. They represent 1,827 hours. They're a budgetary number, and there are lots of people that are not necessarily a full-time-equivalent. They're a portion of an equivalent. That is also a number that gets
[ Page 3579 ]
skewed by that. It's an FTE equivalent that we work on for budgeting purposes.
D. Routley: Thank you for the answer, I guess, which was an explanation of what a full-time-equivalent is. I'm aware of that. What I wanted to know is whether there would be a reporting. It's sad that there won't be, and a bad comparison to previous governments, which were able always to provide that kind of accounting.
Moving on to the public affairs bureau. At a time when the B.C. Liberal government is making drastic cuts to services — and those were titled in the news release as protecting services — for people with disabilities, charities, school playgrounds, school grants of all kinds, gaming grants to charities, funding for environmental and arts groups of all kinds, the B.C. Liberal government has given the public affairs bureau a spending boost of 2.5 percent.
Can the minister explain how such an increase could be justified in light of these other, I would say, mean-spirited cuts to people who are vulnerable?
Hon. B. Stewart: I would be happy to explain that anomaly in terms of the budget estimates.
First of all, I go back to the previous answer in talking about the challenges that every ministry, every department in government has faced. One of the things we've had to accommodate is the fact that the landscape has meant that we all have to do with less.
In Shared Services B.C. we were paying for resources in the public affairs bureau that were reviewed by the head of the public affairs bureau, and those services were returned with the idea that they would not be charged for them.
In the business of going back and restating the 2009-2010 budget, those savings did not get added back in, and so they've been added back in for the recognized savings that they contributed in the 2009-10 year. That's where that anomaly comes from.
D. Routley: Well, also going back to the previous question, all of these answers should provide British Columbians with an answer or an impression of how the cuts to services, how the cuts to budgets of ministries affect services to real people.
On the one hand we look at full-time-equivalents that can't be reported out ministry by ministry, so people have no idea how the reduced funding and the challenges that the minister speaks of will translate into challenges in their lives in terms of obtaining the services they depend on.
At the same time we hear of a spending increase in the arm of government that is basically spinning the message of government to those same people. That's why that's an important distinction to be made.
In August the government sent out a news release to advertise the fact that they had cut eight public affairs bureau positions. Since the September budget the government has hired 12 more people into the public affairs bureau, but there's no news release on that. Why was there money for 12 new public affairs bureau positions while the government was cutting essential services to people with disabilities, groups that I've mentioned like environmental groups, social groups serving people, and arts and culture groups?
Hon. B. Stewart: To the member opposite: I'm talking corporately about Citizens' Services here, and I'm sure that you have the numbers available to you. Like, there's no more money coming into Citizens' Services for increases for staff and, as well, within the public affairs bureau. The budgets have stayed the same or been reduced.
The reduction in Citizens' Services just over the last year, which was a reduction from the previous year, is $46.4 million, about 7 percent of our budget. Within the public affairs bureau — and we talked to you — this number is the same as what it was the last time we talked about this. We had reduced our FTE count by 26 positions to a total of 197, which is where it stays. The increase in the hiring would either be through attrition or replacement of staff.
D. Routley: Well, in the previous estimates in September we raised the fact that the public affairs bureau had always been a stand-alone vote and that it was a stand-alone budget item. Now it's just one more program area within the ministry. Under questioning in the last estimates the minister admitted what his deputies had communicated to us in a briefing — that this was in order to facilitate the moving of moneys from one part of the ministry to another, which was not previously possible.
We're seeing money moved into the public affairs bureau, and this is, according to the government's own revised estimates numbers of last year, an increase of 2.5 percent. At a time when we see deep cuts in things like B.C. Stats and other areas of the ministry, does the minister think it's justifiable to be shifting money into the advertising functions of the government?
Hon. B. Stewart: I'm happy to try to shed some light and clarity on this particular issue. First of all, just to be clear, we have moved away from $1,000 votes and single votes for the entire Ministry of Citizens' Services.
That has been driven primarily by Shared Services B.C. because we took back money that was being expended in all ministries and all departments we provided services for. The reason for that is transparency and so that we can actually manage to a budget. That idea of moving funds is
[ Page 3580 ]
something that we wanted to avoid, and that's the reason that it's all totally, inclusively, in Shared Services B.C.
If you look at Shared Services B.C., which I know is not the question, there are consistently targets for lower expenditures in Shared Services, and that's going to be accomplished in managing that budget tightly. It was decided at that time that we should make certain that the other areas would also have their separate votes back, and the public affairs bureau is not any different.
The amount that you're referring to, I believe, is the transfer of $2.325 million from Shared Services that was taken away from the public affairs bureau, and that is in the restated amounts. That also is where the $641,000, which was the savings that they had built up in 2009-10…. They had added it back in, so it appeared that there was an adjustment or an increase in the public affairs bureau.
The bottom line is that the public affairs bureau has the same budget as last year. It has a 12 percent reduction in its workforce from '08-09. The reality is that there have been no new additional hires in that area. I think that should answer your questions.
D. Routley: The advertising costs, STOB 67 costs, in the public affairs bureau for '10-11 are static at $4.077 million. It's the same as it was in the September budget. However, the total STOB 67 advertising across government is up to over $19 million for 2010-2011. This is a tripling of advertising costs. This is not for statutory public health, public interest notification, public health campaigns and the like.
Where and why has more money been found, at a time of deep cuts to services for people, for straight political advertising by this government?
Hon. B. Stewart: I can't answer for the other ministries' STOB 67 budgets, you know. You'll have an opportunity as the opposition to ask each one of them to explain that. But I can tell you that STOB 67 in the public affairs bureau is $4.077 million, and that remains unchanged.
D. Routley: Well, the government has centralized a number of costs — IT, accommodations, etc. In the Ministry of Citizens' Services we've seen this centralization of services, but at the same time we're seeing a decentralizing of advertising costs in the different ministries.
What's the basis for centralizing costs into the Ministry of Citizens' Services when at the same time advertising is not being centralized in the public affairs bureau?
Hon. B. Stewart: Historically, these advertising costs have never been consolidated. One of the things that…. An example of where there might be a STOB 67 expense is in a place like tourism. We don't manage that as the public affairs bureau.
Public affairs is there for statutory posting as well as advertising, which might be things such as unexpected health issues, such as H1N1; the forest fire campfire ban; and things like that. That's the advertising budget that's in the public affairs bureau.
D. Routley: We see this effort to centralize costs in the ministry of all sorts of services in government, but not advertising. Why is the government less interested in cracking down on costs in advertising versus other costs in government?
It's clear: on the one hand we're seeing a centralization of services and costs in this ministry — all sorts of services. But when it comes to advertising and promoting, there's $19 million that was not for advertising where not to go in a forest fire or where to get an H1N1 vaccine. This is representing, in our opinion, straight political advertising. Why isn't it centralized in the PAB?
Hon. B. Stewart: Just maybe to provide some clarity, first of all, I want to reiterate. You just said something about political advertising. I don't think that an epidemic or pandemic such as H1N1 would be characterized or seen as something that should be politicized.
We spent over a million dollars back in the spring of 2009 when it first cropped up. We had another round of budgeting in that — a very difficult-to-forecast, unprecedented example of where a couple of million dollars in advertising was needed for something that was purely not political.
I will tell you, just on STOB 67, the budget for public information campaigns and publications has increased by $12.113 million, or 74 percent — from $6.95 million in the 2009-10 budget to $19.063 million. This is largely attributable to the return of Tourism B.C. to government and a small decrease in the officers of the Legislature.
D. Routley: Okay, the minister has accounted for about a million, maybe two million in advertising for H1N1 — certainly not political advertisement. But endless advertisements about being the best place to work, live and play and reinforcements of the B.C. Liberal message through that advertising — that's what we're calling political advertising. Clearly, a lot of that is being carried out with this function.
What role is the public affairs bureau carrying out in working with ministries in their advertising budgets? What is the budget for the coordinating role that the public affairs bureau plays in helping ministries coordinate those campaigns?
Hon. B. Stewart: I just wanted to…. The public affairs bureau's role is to be the coordinator behind these
[ Page 3581 ]
individual issues that come up. We talked about the H1N1. Forest fires — the fire season last year took a significant amount of effort. You might well remember that there was a provincial campaign on banning forest fires.
They're the coordinator between the ministry, the agency of record — which is often an outside advertising agency that will actually do the work — and our own small internal group that will direct the marketing efforts for the provincial government within the public affairs bureau.
D. Routley: Most of the advertising that the minister has referred to is, in fact, STOB 68 advertising. STOB 67 is the non-public side of the budget, so it doesn't in any way explain this huge increase in STOB 67 advertising.
What kinds of advertising expenditures have been moved out of the public affairs bureau? What STOB 67 expenditures have remained inside the public affairs bureau?
Hon. B. Stewart: Just to be clear, STOB 67 does include the forest fire advertising, as well as the H1N1 campaigns. STOB 68, which is the statutory advertising, includes statutory advertising, road closures and things that we're obligated under legislation to print and publish. That information will be available in Public Accounts, which is coming up, and you'll be able to get a full accounting of STOB 68.
D. Routley: What is the advertising budget this year for Citizens' Services itself, and how does this compare to the September budget and the February pre-election budget?
Hon. B. Stewart: There are no additional moneys for STOB 67 in Citizens' Services. The entire budget is in the public affairs bureau.
D. Routley: Well, I guess that answers where it is, but how much is it? How much is the budget for Citizens' Services advertising, what does it pay for, and how many contracts has it bought?
Hon. B. Stewart: Just to be clear, the money for advertising within Citizens' Services is wholly within the public affairs bureau. That amount is $4.077 million. The budget remains unchanged from the previous year.
D. Routley: What campaigns is the minister planning?
Hon. B. Stewart: You know, it's difficult to presuppose what type of issues we may have coming up. But I can tell you that in the past, as in the last year, we used it for the pandemic situation, for H1N1; and for forest fire, campfire bans and the likes of that. So that's what that money is there for. It comes out, and is available to everybody, in the Public Accounts.
D. Routley: Who is the advertising agency of record for the ministry? What campaigns are they currently contracted to do?
Hon. B. Stewart: The agency of record for Citizens' Services is a company called TBWA out of Vancouver. As far as the programs and projects we're working on for this year, we can never really predict exactly what programs. Currently there's nothing that has been finalized. At this point in time we don't have any ability to give you the answer in terms of what programs are slated for this upcoming year.
D. Routley: I wonder if the minister could tell me if any plans have been made or if any budgeting has been made for advertising regarding the HST.
Hon. B. Stewart: There are some communications being worked on in terms of making certain that citizens of British Columbia have the opportunity to understand what the benefits of the HST mean to them, but at the present time we haven't planned to use advertising specifically for that.
D. Routley: Well, it might be refreshing to hear exactly what those plans are. There was certainly no money spent on advertising it prior to the May election. There was certainly no effort to communicate those great benefits to the people of B.C.
In fact, I think for ten years the Premier campaigned against the HST, and letters were written to various sectors indicating that it wasn't on the radar and that it definitely wouldn't be a part of the government's agenda. Yet here we have the HST. So perhaps it's understandable that there wouldn't be any planning around the advertising of the benefits either.
We've seen this minister's mishandling of the Legion issue. We've seen the minister step into a problem and make it worse by offering three different positions in one day on the situation that those Legion members faced regarding their lease.
With over 200 public affairs bureau or communications people working for government, the government still is mishandling the communication of its agenda.
People throughout the province are enduring cuts to services. Grants to organizations throughout this province are being cut. As the minister responsible for the public affairs bureau and for the communications of government, the minister should be well aware that the media and the people of the province are frustrated by a
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lack of a comprehensive understanding of where those cuts are occurring.
The government has refused to issue a complete list of where the grants are being cut and where they're being restored. I think that it really calls into question the ability of the public affairs bureau to fulfil its mandate — which is to communicate government's agenda in a transparent way.
So can the minister assure us that this myriad of cuts will be communicated in a comprehensive way, that PAB will fulfil its duty and communicate the government's agenda in a transparent way to British Columbians by providing a full list of what grants have been cut and what services are being cut?
Hon. B. Stewart: I think that probably the best way to perhaps answer this is that the role of the public affairs bureau within government and the ministries is to communicate when changes are made or when programs are coming out. They need to make certain that people understand and that they do get messaging.
You can tell from the releases for many of the changes that have been going on — whether it be changes to programs, increases in funding — that those are handled through the people that help those ministries from the public affairs bureau and, as such, I can only really speak to changes within Citizens' Services, not about the overall government ministries.
D. Routley: Well, this minister is responsible for overseeing the public affairs bureau. This ministry is supposedly in control somewhat of what occurs within the public affairs bureau, so why is this minister not setting the direction that government cuts and grant cancellations be presented to the public through a complete and comprehensive list?
Hon. B. Stewart: It isn't the role of the public affairs bureau to be directing ministries to make these declarations. We are there to work with them, to support them in making certain that it's communicated in a clear, concise and effective manner.
D. Routley: The final sentence is essentially my understanding of the mandate of the public affairs bureau, and that is to communicate government decisions and policies in a transparent manner. It's hardly transparent when the media and all the groups who are affected cannot get a list of what cuts have been made, what grants have been cancelled.
It seems like a simple thing. Politically embarrassing to this government maybe, and perhaps that would explain the reluctance to provide such a list, but it seems like the mandate of the public affairs bureau, to communicate the mandate of government in a transparent way, could only be achieved by producing such a list, a comprehensive list of which grants have been cut throughout the province.
We have lists from previous years of which grants were approved. How can it be that the government, this ministry and the public affairs bureau is unable to produce a list of which grants have been cut?
Hon. B. Stewart: You know, that's just not the way that the ministries work. We know that we have a grant called connecting communities, and we're hopeful that we're going to be able to make an announcement soon about the ongoing funding of that. That's all I can comment on at this point.
D. Routley: Well, it's certainly not the way this government works, and that would be to be transparent and open about what its actions are, how they affect people. That could only possibly be achieved by a full and comprehensive list of the grants. But again, that would be terribly embarrassing, and the media would then be able to publish exactly the cumulative impact of the cuts that have been made, so I would say that that is indeed the reason that that list is not being presented.
I have a list of all the grants of two years ago that were approved provincewide. I'm contacting each body in my constituency that received a grant to find out whether or not they've been denied this year. I have to do that individually because this government, this minister and this public affairs bureau have failed the people of B.C. At a time when people in this province who are vulnerable are having their services cut by the denial of these grants, this government is failing to be transparent and open. We have to trace that down organization by organization, and we will.
Every day there are hallway transcriptions made of everything that NDP MLAs say to the media, every discussion that occurs in the hallway after question period or any other time we're speaking to the media. Those transcriptions are being made by public affairs bureau employees. These are public servants. Why is this overtly partisan job being conducted by staff who are supposedly non-partisan rather than by B.C. Liberal caucus staff members?
Hon. B. Stewart: This question is one that was answered in the fall estimates, and as such I don't know whether we're…. Nothing has changed, and we don't have a different answer today than we did in September.
D. Routley: That was an entirely unsatisfactory answer in September, as that answer is today. What is the purpose of this transcription — of public affairs bureau staffers transcribing everything that NDP MLAs say in the hallways? Where do these transcriptions get sent?
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Can the minister assure that they are in no way shared with or destined for the B.C. Liberal caucus? And how can we have verification of that?
Hon. B. Stewart: These transcriptions, as you're talking about. The public affairs bureau only works for the ministries. As such, it is part of their role to make certain that the ministers and the ministries have the ability to respond in a timely and appropriate manner. That information is used exclusively by the ministries and not shared with caucus at all.
D. Routley: Well, are these transcriptions stored? Are they archived? Are they in any way retrievable by the Liberal caucus?
Hon. B. Stewart: Those records are stored. They are not, as I mentioned, shared with caucus, but they are a document that is stored as a government record.
D. Routley: We have photos that are posted on the B.C. government website that were taken by the public affairs bureau staff. They're of the Solicitor General with the Team India luge captain and others celebrating the Chinese New Year recently. It just seems like pictures of ministers celebrating would be more suitable for a B.C. Liberal caucus website than on the government website.
Again, I would ask why public affairs bureau staffers are playing a role in posting that type of photo rather than staff from the B.C. Liberal caucus.
Hon. B. Stewart: It's completely appropriate that the public affairs bureau makes certain that they are following what the ministers are doing and, as such, are posting photographs of activities where they are involved and engaged in the community. That's part of their responsibilities as being part of the executive council.
D. Routley: The public affairs bureau distributes news releases produced by one side of the House but not the other. Does the public affairs bureau consider the B.C. Liberal caucus a wing of government?
Hon. B. Stewart: The public affairs bureau works for the government, and it works for the individual ministries. It doesn't work for the caucus. As such, that suggestion that they're distributing information for the Liberal caucus is inaccurate.
D. Routley: With that, I'd like to move to some problems that we perceive in terms of outsourcing contracts with Shared Services B.C. I'm backtracking a bit here based on information that I've received overnight.
I've heard about a current trend with regards to the government's Shared Services B.C. contracts in which the managers who are the last ones in government to have expertise over the contracts are being let go. I have heard of two directors, for example, recently let go — director Steve Banks and director Graham Appleton, whose work was outsourced to IBM some time ago.
Is the minister concerned that having no managers left in government with high-level knowledge over the IBM contract will leave a significant gap in the government's ability to oversee and negotiate service delivery with IBM in an effective way? If the last managers who manage those services within government are gone, who has the insight to be able to ensure that we are getting full value for our money from these IBM contracts?
Hon. B. Stewart: In the alternative service delivery contracts, those are the responsibility of Assistant Deputy Minister Wayne Jensen. He individually makes certain that there are people familiar with these files that would be staying on with Shared Services B.C.
D. Routley: People within government have communicated to me an unease with this approach — that, in fact, the last people with expertise when it comes to the services that are being delivered under these contracts are now being let go. How can the minister have confidence that there is an effective use of taxpayers' dollars, that these contracts won't be used to milk the taxpayer if those people in government who were able to adequately judge the performance are no longer there?
It seems to me that one person overseeing all of these contracts cannot possibly have the insight required, that sort of historical reference that these directors brought to overseeing those contracts.
Hon. B. Stewart: These contracts are extremely important to government. The way that they're written and crafted takes time. It's thoughtful. It's made certain that there's a legal obligation of responsibility on both sides.
There hasn't been any attempt to change the government's position. The same deputy minister that's been responsible for alternative service delivery contracts is the same ADM that's responsible today for them. They have clear performance objectives and metrics built right into the contracts, and there's a leadership team in place to take care of this.
D. Routley: Well, I anticipated that the minister would offer in his answers assurances that, in fact, of course, there is no problem. So I guess there's no problem, but the people who I've spoken to have indicated that there may be a problem, that in fact, people with that historical perspective and context, able to judge whether full value is being achieved, are gone, particularly in this case — those two directors who had the insight to be able to judge whether the IBM contracts are being ful-
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filled on the ground in a real way, regardless of how the contracts are written.
It would be surprising to me to hear that the minister assumes that because a contract is written a certain way, therefore it will be followed. Even if the metrics of the contract are achieved, it takes a historical reference, a perspective, to be able to make a true judgment on whether the services are being provided inadequately. According to those who I have spoken to, that capacity is being lost. Is there any plan to replace those two directors?
Hon. B. Stewart: This is a sizable contract, the one you referred to — the contract with IBM. It's for an over ten-year period of over $300 million. Under this agreement, workstation and support services are delivered to more than 31,000 employees with 21 different ministries as well as the broader public sector agencies and Crown corps.
We don't put that much risk with one or two individuals. We make certain that there's a leadership team in place. They work on it together, and regardless of how these individuals feel, the government is confident in the reorganization within Shared Services B.C. — that we can do things differently and concentrate on saving dollars for the taxpayers of British Columbia and try to reduce the deficit that you're well aware of.
D. Routley: I'd like to backtrack a couple of questions to the public affairs bureau, if the minister will pardon this revision of the question, because I think the answer didn't really suit the question I was attempting to ask, and that is that the public affairs bureau is distributing press releases from one side of the House — our side. I think that question assumed that I meant the B.C. Liberal side. The public affairs bureau is distributing our news releases, news releases of environmental organizations, anything of that nature. We know because we receive them.
Is it inappropriate in the minister's mind that the public affairs bureau is providing this service, and in that sense, does the public affairs bureau consider the B.C. Liberal caucus to be a wing of government and someone to whom they should direct that distribution?
Hon. B. Stewart: I think again I go back to the public affairs bureau's role. It's to make certain that the ministers and the ministries are as well informed as possible about actions that are going on that they may have to respond to or be prepared for in terms of having the right information.
It's my understanding that we provide media monitoring and access to Today's News Online to the opposition as well as the government caucus, and we do end up posting the NDP caucus notes on there for the ministers' and ministries' benefit. That's the reason that they're posted there.
D. Routley: Well, it seems that some of what the minister describes resides on the side of the line that is appropriately non-partisan — the provision of news collection through Today's News Online to all members of the House. But providing the Liberal ministers and ministries, the cabinet and the Liberal caucus with the NDP news releases and other functions of that nature would more appropriately be carried out by staffers of the B.C. Liberal caucus and not public servants.
One of the contracting issues that we're experiencing in the province is our problems with EDS Advanced Solutions. This is the corporation that was contracted to carry out the MSP billings for the government. Citizens have reported spending hours on hold, only to be disconnected. One individual reported trying for 33 days to reach someone from EDS. They've also had bills sent to them as late as 42 months or, in one case, eight years after one woman had deceased.
As the B.C. Liberal government is ultimately responsible for the success and service provision of such outsourcing companies as EDS, and as it is the government, not the corporation, that is accountable to B.C. citizens, can the minister explain what steps have been taken towards fixing this problem?
Hon. B. Stewart: The contract you're referring to is not managed by Citizens' Services, and as such, I don't have any information to provide you on that question.
D. Routley: With these kinds of problems with the outsourcing contracts, how can British Columbians have any confidence in these contracts and the government's ability to deliver services?
In the absence of routine disclosure of contracts, such as the EDS contract, how can people possibly have any confidence that these services are accountable? And why are those contracts shielded from FOI by this government? Will the minister commit to opening up these contracts to FOI immediately?
Hon. B. Stewart: Just to talk about this particular contract. One of the things about people that are in private business is a certain amount of privacy around how they build and price things. That's one of the things that I know is something that seems foreign, but the reality is that in a lot of these contracts there are a lot of competitors. How they decide to price and how they price certain components may expose them to the fact that their competitors in the next round of bidding and whatever would have that necessary advantage.
The provincial privacy experts and lawyers have had an active role in writing and reviewing the privacy sections
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of the alternative service delivery contracts to ensure that they comply with the Freedom of Information and Protection of Privacy Act.
All employees of that private sector partner are required to sign non-disclosure agreements and have access only to the information they need to perform their duties.
Each of the alternative service delivery contracts is signed with extensive and strict provisions that complement and exceed the privacy standards set out by the province's Freedom of Information and Protection of Privacy Act guidelines.
D. Routley: In the case of the IBM contract…. I'll just offer some summary comments now to my portion of the Citizens' Services estimates, and then my colleague from Yale-Lillooet will take over with the multiculturalism aspects of the ministry.
What the minister has offered is unsatisfactory to a taxpayer. The IBM contract, for example, was FOI'd by the Freedom of Information and Privacy Association of B.C. They recently held a five-year birthday for that request. It took five years to get anything, and it's highly censored when they have gotten it.
Essentially, British Columbians consider that a public dollar is a public dollar is a public dollar, and when public dollars are paying for a service inside government or outside, taxpayers expect accountability. The government's broadening of the exemptions under FOI has exempted British Columbians from a clear view, a transparent view of what their tax dollars are paying for.
They have also served to help with the off-balance-sheet accounting that these contracts may represent — the obligations that even one of the Liberal members on the Finance Committee referred to as a high level of risk that should be further and more clearly reported.
So going back to my opening comments — freedom of information, privacy protection — on both ends of the scale the minister and the ministry's performance and the government's performance have made an oxymoron of those concepts.
On the side of freedom of information, we are told on the committee reviewing the act that we have seen the development of a sophisticated culture of avoidance to disclosure. On the personal privacy and protection of privacy side of the act, we see a culture of denial, of failure to uphold the responsibility government has to individuals.
Obviously, the people affected by a privacy breach stand to suffer extreme harm through those breaches — personal, financial, social. If the minister and the government take that responsibility seriously, they'll act to tighten their performance. What we're seeing instead is a broadening of the government's information-gathering capacity without adequate assurances that privacy is going to be protected.
When it comes to these issues, democracy is at stake. James Madison, fourth President of the United States — considered to be the author of the U.S. constitution — said that "a popular government without popular information or the means of acquiring it is but a prelude to a farce or tragedy or both." I would say that that's what we're witnessing. The freedom-of-information commissioner said that the historical record is at risk because of the failure of this government to adequately provide accountable access to the record of its actions.
So I would implore and beg this minister to do whatever he can within his cabinet and within his party to correct this course, to return the B.C. government and the province of British Columbia to a place where we can say with pride that we lead other jurisdictions in terms of accountability. And we're not there. We're not there.
It's clear that the act has not withstood the test of time — that time, in fact, has withered its effectiveness, that practice has diminished its effectiveness. So I would ask this minister after these estimates to go into his cabinet and do what he can to increase the effectiveness of our democracy by increasing citizens' and groups' access to information.
It's what people expect of us. I know the minister believes that. I know that he personally would endorse that, so I would ask him to do whatever he can, take whatever action he can to correct this government's abysmal record when it comes to freedom of information and privacy protection.
H. Lali: I guess we begin the multiculturalism, the Public Service Agency, part of the estimates for the Ministry of Citizens' Services.
[D. Horne in the chair.]
Just for the minister's benefit, and staff, we'll look at the STOBs first, STOBs and salaries there; move on to accreditation of foreign degrees; if anybody's making a note, Public Service Agency; and then, of course, human rights and anti-racism; tendering of contracts; ESL; HST, in terms of multiculturalism and how it affects multiculturalism; the Olympics; and then gaming grants as related to the ministry for multiculturalism.
I want to start off by recognizing the minister's staff, the senior staff, the staff in the minister's office. I also want to recognize the folks who work in the ministry and folks that are in the entire provincial public service. These folks do a fantastic job every day, every week, every month, and all the years that they're here, especially the senior staff that are sitting with the minister, some in the gallery, who obviously have been committed to the public service over a long period of time. Long after politicians come and go, they'll still be here.
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So I want to thank the staff and also want to make sure that I recognize the hard work that individuals do on behalf of the government, the province and the people of British Columbia. I thank you for that.
I just want to start off by looking at STOB 50, at the multiculturalism portfolio there. There is a decrease of 17.28 percent on the base salaries. That's minus, I think, $56,000. Then of course, correspondingly, the employee benefits — so minus $12,000, which is actually a total of minus 15.38 percent. So a total of $68,000 that has been cut there, and that's 16.92 percent.
I'd like to ask the minister if he could give some details as to what actually took place with those two STOBS and what was actually cut in terms of salaries. Were there people that were actually just moved to another ministry?
Hon. B. Stewart: I just first want to thank the member for Nanaimo–North Cowichan for his interesting and detailed remarks that he made. I just want to think that we appreciate his questions, but we do have some differences in views occasionally — or often. Needless to say, I just want to tell him how much I appreciate his contributions to these estimates.
For the benefit of the member for Fraser-Nicola, I'd like to just take a moment here to introduce the staff. I have Deputy Minister Kim Henderson, from Citizens' Services, on my right; Lynda Tarras, the head of the Public Service Agency, on my left; Ron Norman, the head of the public affairs bureau, behind me; and Brad Grundy, who is the EFO for Citizens' Services; and Bette-Jo Hughes, who is responsible for Service B.C. but also has the responsibility for multiculturalism.
In answer to your question about the STOBs and the changes, first of all, I want to assure that you there has been no change in our commitment to multiculturalism. This government takes that matter extremely seriously. I know from last estimates that we may disagree on that, but I want to assure you that we are working tirelessly. The people at the multicultural and inclusive communities office — the staff, the Multicultural Advisory Council — take this seriously.
The budget change that you're seeing, that you're referring to, is the fact that we have a federal government supplement that has been added back in. We've been able to reduce our costs, but there have been no changes to staff in the multicultural and inclusive community office.
H. Lali: I want to thank the minister for that.
STOB 59 is centralized management support services. That's gone. It's $47,000 there. For professional services there's an increase of $68,000, which is about 90 percent.
Could the minister explain what happened with centralized management support services? Did they go to a different ministry? For professional services, the addition there — what exactly is it for?
Hon. B. Stewart: First off, in answer to your question about STOB 59, the centralized cost, one of the things that we've discussed here today is the change that's happened within Shared Services B.C. and the way that the budgeting has worked. In all cases of government, shared services have been taken back out of the individual ministries and consolidated under a single budgetary vote for Shared Services B.C.
In that particular case, STOB 59, the $47,000 you see is actually restated as being zero. That's where the money that was allocated in last year's budget has been taken back, and it's restated as being a nil balance.
On the professional fees, the increase, we're just waiting for an answer on that, and I'll get that answer for you as soon as I have it.
H. Lali: Okay, I would like to thank the minister. I guess we'll wait for the answer, so I'll move on from there to the accreditation of foreign degrees. Could the minister explain what positive steps have taken place since the last time…? I guess I didn't get a chance to actually talk about the accreditation of foreign degrees in the fall session because of the limitations of time.
From when the minister had taken over from a previous minister, I was wondering if he could inform this House what positive changes have taken place to make sure that the thousands of people that we have — tens of thousands in Canada but thousands in British Columbia….
Immigrants, a lot of folks who are actually citizens of this country now, who have come to this country from other countries with degrees — bachelor's, master's, PhDs, etc., even people with law degrees — are here in this country and this province and can't practise because their degrees are not accredited by British Columbia or Canada. They end up actually doing jobs that are well below the level of experience and education that they have had from their countries of origin.
I know there are a lot of folks here from India and China, and there are folks here from Africa, Southeast Asia, folks from the Latin world, as well, whose degrees are not recognized. In some instances many of those folks are much more qualified than some of our own folks that work here, but they simply don't have the piece of paper.
I was wondering if the minister could give some details as to what positive steps have taken place since he's become minister to make sure that these people's degrees will become accredited in a timely manner. If they have to upgrade in a certain way, what kinds of rules or regulations have been put in place to make sure that that happens so that these folks can actually go on to get jobs in the fields they were trained for?
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Hon. B. Stewart: You know, there are two things here. One is, as the Minister of Citizens' Services responsible for the Public Service Agency, I can tell you that you we take the matter of inclusiveness and trying to make certain that we're not putting up artificial barriers in terms of our hiring within the provincial government…. So when we require, or we have a job description that might require, a degree or some sort of official designation, we make certain that that's absolutely essential.
On the second part, as Minister Responsible for Multiculturalism, I can tell you that this issue that you raise is an issue. It's often outside of our jurisdiction, and it is not something that is easily resolved. However, the Premier as well as the minister responsible for recognizing outside institutional designations…. That's the Minister of Advanced Education and Labour Market Development. She is actively working with professional organizations to make certain that we try to bring those barriers down.
Some of those things that I will allude to is that we want to make certain that when people come in through either the provincial nominee program or they come here through some other means where they've been solicited to come to Canada as a new immigrant, they don't arrive here with the incorrect understanding that a professional designation in their country will mean the same thing here until such time.
So there is communication that's required in that area. It's something that I have talked to Minister Stilwell about and that we'll continue to work for in terms of multicultural access to jobs here in British Columbia and in Canada.
H. Lali: The minister, as an advocate for multicultural communities and Canada's multicultural mosaic…. I think British Columbia is considered perhaps the most multi-ethnic community in all of North America, with perhaps the exception of the Toronto area, which compares to the Lower Mainland.
As an advocate of multicultural issues, what is the minister prepared to do to lobby the Minister of Advanced Education — under whose jurisdiction, as he mentioned, it is — and also to lobby other jurisdictions, perhaps the Minister of Immigration or the Minister of Multiculturalism, federally, as well, and cabinet colleagues to actually make this a priority?
Is this a priority for the minister? If it is, what is the minister prepared to do to talk to his colleagues at both the provincial and the federal levels? And at the same time, what sort of a plan is he willing to put forward to make sure that these foreign degrees are accredited in a timely fashion?
I understand that the minister made a comment in terms of the nominee program and immigrants coming here. They should not have an expectation that their degrees would be accepted at an equal level here — I understand that — because of the differing educational systems of differing countries.
But at the same time there are so many instances where folks with foreign degrees — higher degrees, engineering degrees, etc., who have practised in their profession for years and years and years; for some people it's decades, up to 25, 30 years — come to this country. They don't have that piece of paper that says that their degree is equivalent to our degrees here, and yet their experience in the field, on the job, far surpasses any training that would be involved in our degrees here in Canada.
There ought to be a mechanism or mechanisms put in place where folks don't have to spend another one, two or three years to take those courses in order to actually do the equivalents of our degrees here. There ought to be a process put in place for those folks to be able to challenge those exams, if you want to call it, or whatever performance levels are required by those degrees.
What is the minister prepared to do to actually lobby his colleagues and advocate on behalf of the multicultural communities, of which he should be an advocate as a minister, to talk to folks in Ottawa and in Victoria?
Hon. B. Stewart: As much as I sympathize with the comments in terms of the challenges that are faced, I have approached Minister Stilwell to have dialogue in this particular area. Again, these questions are the responsibility of Advanced Education and Labour Market Development, and I would encourage you to attend the estimates briefing to have that discussion with her.
H. Lali: I'll certainly talk to the minister, but I guess from that answer, it's pretty evident that this minister is not prepared to be an advocate for multicultural communities and those folks whose degrees are not accredited. That's a real shame. I was hoping that as minister he would be an advocate.
I know that ESL is a little further down on the list, but my colleague to my right from Vancouver-Kensington has some questions about ESL, and I was wondering if we can actually talk about ESL right now, and then we'll go on to the Public Service Agency.
M. Elmore: Thank you for the opportunity to raise some questions. It's certainly a concern in my constituency, very diverse. I've met with representatives from the Vancouver school board and attended briefings that they had there in terms of a recent report that was commissioned by the government looking at the transition of immigrant youth, particularly youth who come in where English isn't their first language and the challenges that they face in the school system.
It was raised to me that this is a particular concern. Can you talk about the funding levels of ESL that are
[ Page 3588 ]
provided for new immigrants and particularly youth in the school system.
Hon. B. Stewart: I just wanted to make certain I understand the question. It's about ESL in the school system and what's being provided?
M. Elmore: Sure, and supports for….
The Chair: Sorry, through the Chair, Member.
M. Elmore: Sorry, yes.
Supports for youth. It's being raised in just numerous cases in terms of the challenges for youth who immigrate from other countries where English isn't their first language — certainly, the challenges for a family to settle, to access employment. Particularly the kids who are going into the school system. It's a big issue and from a number of different ethnic communities.
So the question is: what kinds of supports are available? If I can get an idea in terms of the programs to address these challenges. In particular, youth is the concern.
Hon. B. Stewart: First off, the programs are somewhat complicated here in British Columbia. Within the school system, the ESL program is administered through the Minister of Education. So the questions in terms of the allocation of resources and in terms of our overall provincial budget should be directed there.
On the settlement service side, when people arrive here, Advanced Education and Labour Market Development is the ministry that actually handles that delegated authority from the provincial government and administers the money — which I have worked with and try to work with, as the member for Fraser-Nicola requested.
Are we able to collaboratively work together with the federal government in trying to find a solution? It's recognized as being a significant barrier in terms of their success here, and I know that the minister would be happy to share the numbers with you. I don't know the information on that. But I can tell you what our ministry is doing in terms of welcoming and trying to create inclusive communities, which is our responsibility in terms of multiculturalism.
We have a program in the schools called Make a Case Against Racism, which is in its second year. It's a project that came out of Abbotsford Community Services. That particular program engages students in grades 4 to 7 to get involved through a program that actually….
There are materials that they receive that encourage open discussion about racism issues. Students listen to a podcast that features local B.C. artists from a wide variety of musical genres. Of course, we had one of these people featured during the Olympics, during Multicultural Day. They let the music help inspire them to create artwork that has become the antiracism theme.
This month the judges will be looking at all of the submitted artwork and select one to become a Make a Case Against Racism CD cover. It's a great program that brings awareness to the issue of racism at an early age. It's innovative and engaging, and programs like these help us tackle these problems right at the roots of the problem.
I know that that program is finishing up. I believe April 30 is the deadline on that, and so they have to have their applications in by April 30. That's one of the programs we're responsible for.
M. Elmore: I just wanted to make the point and raise the concern — in particular, the importance of providing adequate services and supports to youth, particularly new immigrant youth who come in and don't have English as a first language. The difficulty is that if they're not able to….
Often they're misdiagnosed as having a learning disability when, actually, it's a language impediment in terms of understanding English. It just compounds, in terms of their experience, not being able to move through the education system, and they become ghettoized in the low-wage sector. It's certainly a huge issue.
The question I have is in terms of the B.C. Liberal platform. You said that you're committed to enhancing support for ESL and immigrant services, recognizing these challenges. I'm just wondering if the minister can explain and talk about what some of the steps are that have been taken to reflect this commitment.
Hon. B. Stewart: I think maybe just to try to kind of…. A lot of the questions you've raised actually relate to the budget of Advanced Education and Labour Market Development.
Their role is, number one, when people emigrate and they're attracting people to come here, to create welcoming and inclusive communities — to make certain that the settlement services are dealt with and the English as a second language and to make certain they achieve those outcomes and get properly integrated into coming into British Columbia.
In our role, one of the things that we're trying to do in multiculturalism is to break down barriers. I talk about Make a Case Against Racism. We have programs like the RAP program put on by the Solicitor General's ministry and Make a Case Against Racism at the school age, to try to make certain that visible minorities, people that are perceived to have challenges within the society in British Columbia, are welcomed and that they're included in all aspects.
Speaking at the international elimination of racism day on Sunday, one of the things that is most important is that
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these communities take the time to make certain they're also being welcoming of other people that are different ethnicities and that they're breaking down the barriers they sometimes create around their own communities.
That's really our role in terms of making certain that we have welcoming and inclusive communities throughout British Columbia. We do that through settlement services and through supporting discussions in terms of making certain that people are welcomed into British Columbia throughout the province. It doesn't matter if they're in Fort St. John or Kitimat or they happen to be in the Kootenays.
H. Lali: I just want to turn the minister's attention now to the Public Service Agency. Last September, in 2009, we talked about the four equity hire groups — women, aboriginal people, people who are visible minorities and persons with disabilities. Actually, there's youth as well. There should be five groups now.
The minister actually stated at the time that he did not have the numbers I was looking for in terms of the categories that I'd mentioned or any breakdowns as to how many of those folks as a percentage are in the senior management level. But he did commit at the time that he would try and provide that number at a later date. So I was wondering if those numbers are now available from the minister and if he could actually share with the House.
Hon. B. Stewart: The commitment we made was that there is a survey coming up called the work environment survey. It runs in April. When that survey is complete, we will be announcing the results in June. We'll be happy to get you a copy.
H. Lali: That's correct, actually. The minister pre-empted my next question about the survey. Could the minister actually tell us if this survey has been developed yet, or is that still a project that's in the ongoing category?
Hon. B. Stewart: Yes, the survey has been designed. It was developed in collaboration with B.C. Stats.
H. Lali: You said there was a meeting in collaboration with B.C. Stats. Was there any outside contractor or consulting firm or anybody that was used to actually develop this service, or was this done in-house by the ministry itself?
Hon. B. Stewart: It was developed just with in-house staff.
H. Lali: In September we had a bit of back-and-forth on this issue. Like the minister, I know we have differing opinions but that nothing is personal in terms of those issues. I understand that the survey is developed and it'll be put out in April, and we'll wait for the results of that to come back. I appreciate that information from the minister.
Could the minister tell me what steps, other than the survey, he has taken since he's become minister to make sure that folks from these equity groups that we talked about are actually making progress in terms of not only being eligible to apply but to access and be successful in actually gaining senior-management-level positions within the public service?
Hon. B. Stewart: One of the things that I tried to impress upon the member opposite during our last discussion about this…. I think that it's important that you realize that government takes, as you refer to it, equity groups….
There are over 120 different ethnicities in the province of British Columbia. You're right when you say that it's one of the most diverse ethnic communities on this continent.
I can tell you that the government has a proud record of leading and not following in terms of its representation, in terms of the overall government workforce and in terms of the different groups that have often been either considered minorities or marginalized.
I'll tell you just a few of the examples that I perhaps wasn't as familiar with the last time we talked about that. I will tell you that one of the things that we're doing for aboriginal youth is the internship program. It was established in 2007. I'm not certain if you're familiar with that program, but it creates opportunities for aboriginal youth in the ministry and aboriginal organizations.
To date, 35 youth interns have completed the program, and 25 aboriginal youth have been placed in 13 different ministries in three regions of this province. I personally have experienced firsthand the results of seeing the new intakes and the ones that are going out. It's a marked difference, and we are making a difference there.
Initiatives for persons with disabilities. When the employment opportunities site was launched, it was a priority to provide access to people who have been affected by vision or hearing loss. At that time we consulted directly with the Canadian National Institute for the Blind offices in Victoria for advice on making the site both easier to read as well as to navigate. Accessible text transcripts of all videos placed on the employment opportunities website are available for those who are affected by hearing loss.
We are currently in the process of refreshing our employment site and plan to incorporate the best available technology to further improve access for people with disabilities who are interested in employment in the B.C. public service.
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The B.C. public service hiring centre continues to reach out to all prospective employees to promote the province of British Columbia as an employer of choice. That's highlighted by the fact that we were recognized last year as one of the top 100 employers in Canada and top 50 employers in British Columbia for the second year in a row.
Through the annual workforce planning process, individual ministries have articulated their objectives and strategies for achieving a diverse workforce. Some of the statistics I'd be happy to tell you, but I think that I'll leave that to your next question.
H. Lali: I appreciate the minister sharing some of that information with me. I am in awe and applaud the government. I know that over the last 20 years or so there have been greater numbers of folks from these equity groups who have been able to access government positions, and that's a good thing. But they still, even in the general public service, lag behind the private sector.
If you look at the retail sector in the private sector, you'll find that a lot of the equity groups are actually overrepresented. Folks in the private sector — who want to turn a profit, obviously — recognize the need to have people, especially people with different language skills, people of different minority and visible minority backgrounds, etc., and people with disabilities, in order to be able to attract customers from those particular groups. The private sector has done a fantastic job, even in terms of the management levels.
I want to thank the minister for that response. I know there have been increases that are made, but it still lags behind the general makeup of the population on a per-capita basis.
The question here really is about senior management, the upper-management-level positions. I know that the minister and I went around the dance floor on this the last time around, so I don't want to really get into that, but I just want to make that distinction for the record — that the gist of my questions is on the senior management level.
The minister, as the Minister for Multiculturalism, is an advocate for multicultural communities and also for people with disabilities because he has the Public Service Agency under him, which is responsible for equity hire. That was how it was known under an NDP government, but under the Liberal government it's known as the merit-hire principle. It's the same thing, basically. The wording is all the same. It's just the name that's different now.
As an advocate for equity hire, I'd like to ask the minister what he has done personally — especially since we raised this issue in September, just six, seven months back now — to raise this issue or make it a priority with his caucus and his cabinet colleagues. If he's done that, could he tell me what specific steps he's taken to make sure that the goals and aspirations of the folks from the equity groups are going to be met?
Hon. B. Stewart: First of all, I want to point out a discrepancy. The member opposite suggested that our statistics lag behind the general population in terms of the diversity. That's wrong. The statistics showed in September that we led, and the fact is that we continue to lead. We'll provide you with the information we promised in workforce numbers in senior management when the work environment survey is complete.
Personally, I have taken on the role of overseeing the Multicultural Advisory Council, which is the British Columbia government's opportunity to reach out to different communities across the province. We've made some significant changes in the way that that particular council operates, in making it more functional.
I've attended several of their meetings that they've had with the new chair as well as with many new board members that we've added from across the province — in the Kootenays, up in the north and the Okanagan — so that it is much more diverse and representative of a regional spectrum as well as the Lower Mainland.
On a personal note, with my colleagues, certainly I mentioned about the aboriginal internship program. We had a chance, Minister Abbott and myself, to meet with the aboriginal interns at the recent gathering, the graduation ceremony, and had a chance to meet the new intakes as well as the old. I can tell you that there was nothing that made me more pleased than to see the difference the 12 months had made for those students.
As well, I have taken it on to attend several events around the province in terms of events where we're working with communities to make certain that I understand how the different ethnic groups are working in their communities — Osoyoos, Abbotsford and others. In Prince George I was recently at another event. The point about it is that I'm starting to get a much clearer picture in terms of how we can effect change and, as such, am providing direction to the multiculturalism and inclusive communities office.
My colleagues…. Certainly we do talk about this. We see it as an opportunity, not as a challenge.
H. Lali: Actually, the minister said I was wrong. I believe he's wrong in that. I'm going to quote the numbers that were given to me by the minister himself just six months back.
Here's one for the category of visible minorities. This is in the general public service. He stated that since 2001 our percentage in the public service has increased from 7.1 percent of the workforce to 10.1 percent. When I say that the numbers lag behind the makeup of the general population, I'm not wrong. I'm actually correct.
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If you look at visible minorities in British Columbia right now, it is well over 20 percent. I believe it is about 23 percent of visible minorities in this province. The makeup of the public service, according to the minister's own words, was 10.1 percent six months ago.
Let's say that it's gone up to 11 percent by now, which is still less than half of what it is in the general makeup of the population in British Columbia. So the minister's number, you know…. Either his numbers are wrong, or the minister's statement is wrong. I just want to point that out for the record.
The same thing goes for aboriginal people. From 2001 till September last year for aboriginal people — in the minister's own words, he says it's increased from 2.1 percent to 2.8 percent.
If you look at aboriginal people, they're almost 4 percent, if not over 4 percent. They are the fastest-growing population in British Columbia. You'll find that even the children of immigrants are not having as many babies. Neither are the folks of European descent. Actually the highest birth rates are amongst the aboriginal community. So even in terms of the aboriginal makeup, the government lags behind. And it just goes on for other groups as well. I wanted to put that on the record.
Now, I'm really happy to see the minister actually doing a number of things in terms of the multi-ethnic community — going to the aboriginal groups. He said he's made some inroads in the Okanagan and other places. He's going out and meeting with all sorts of people to find out their needs, and I want to commend the minister for that. That is a good thing. It's good self-education that he's getting. But those are outreach activities that the minister is talking about.
My question wasn't about self-education or outreach that he's doing with the multi-ethnic communities. My question was specific in terms of what the minister has done in raising the issue within his caucus and in his cabinet — raising the issue with ministers, raising the issue with the Premier — to make sure that this is a priority and not an issue that is to be left on the back burner. He is the minister responsible for multiculturalism, and as minister, he should be an advocate for those multi-ethnic communities.
Basically, I laid out a number of things that he could do, and one of them was actually direction from above.
What has the minister done to talk to his cabinet colleagues to make it a priority, to talk to the Premier — to say there ought to be a directive that is given by the Premier or the Premier's office to every minister in the cabinet and to every deputy minister and assistant deputy minister in government to say that what is happening in British Columbia in terms of the makeup of not only the public service but also of the senior public service in this province is not good enough when it comes to looking after the interests of the equity groups that I've talked about? That's the kind of direction that is needed.
I can tell you that I've been in a cabinet seat where the minister sits now, except it was in Transportation. I know that in my ministry at the time and in the Transportation Financing Authority, which was under my purview, I gave a directive to the senior staff in my ministry. I said, "I want to see the equity-hire groups getting their representation in terms of the jobs that we have in the ministry; in the Transportation Financing Authority; and in Highway Constructors Ltd.," which was under myself and which built the Vancouver Island Highway project and also the HOV lanes from the Port Mann Bridge into downtown.
Do you know what, hon. Chair? In all of the ministries the highest outcomes were in the Ministry of Transportation and the British Columbia Transportation Financing Authority, because I made it a priority. I gave a directive, and the ministry responded.
What kind of direction is this minister prepared to give in his own ministry, and what has he done to actually lobby the cabinet and the Premier and to ask the Premier to give that same direction to everybody else in government?
Hon. B. Stewart: First of all, I think that it's important, but I don't know exactly how much influence I'd have on hiring decisions if I put out that directive you suggested. It's my understanding that the head of the public service employees is the Deputy to the Premier, and he makes those decisions as to who in senior management is in those positions. It's up to us to cultivate a culture of inclusiveness and bring these people in for the right reasons, where they have the education, they have the talent, and they fit the role for the jobs that we're looking for in the Public Service Agency.
We do commit to that, and we disagree in terms of the numbers that you talked about. I guess I could talk to you about the available workforce that is visible minorities or different ethnicities and the population. There are different statistics. We could spend all day here arguing that. I think that probably, the more important thing is that we're here to debate and talk about the budget for Citizens' Services and how we can accomplish what we set out to do and questions we have in terms of the ministry's expenditures.
H. Lali: I'm not prepared to let the minister off the hook that easily. It is a part of his job not only to talk about the budget but about the principles that go behind the budget. What I'm talking about are the principles, which are as important as the budget itself. So I'm not prepared to let the minister off the hook that easily.
He was a new minister in September 2009. Yeah, I could let him off the hook. But he's had a year under
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his belt now, and it's either he's doing something about it, or he's not doing something about it. If he's not, he can put it on the record and say: "Look, I've had other priorities, and I will make this a priority, will take this forward and make sure there are certain directions that are given."
The minister should not underestimate the power that the minister has. A minister has a lot of power, you know. A minister doesn't have to dictate. That's not what we're asking the minister to do. But the minister has a whole lot of senior staff, very responsible staff, who themselves have a lot of power within the ministry. It befits the will of the minister to talk to the staff, to say: "Look, we're doing miserably in our own ministry and in others in terms of equity hire."
These are British Columbians who are qualified for positions on an equal level as those folks who are not from the disadvantaged categories. These equity groups are considered disadvantaged because of certain biases that exist and certain discriminations that exist — whether they are overt or whether they are systemic and not seen in the public eye. There are barriers to those folks being able to access those positions and opportunities on the same level as folks who are not belonging to those disadvantaged groups. That's why it's important.
He is the minister. He is the minister responsible for the Public Service Agency, which in itself is responsible for the hiring process and for making sure that the merit principle comes first when it comes to hiring not only folks within the ministry at the low or middle management or at the entry level but folks who are going to be promoted to middle management and subsequently to upper management, to senior-management-level positions.
That's his job. He cannot shirk that responsibility by saying that that is the responsibility of the Deputy Minister to the Premier.
There are — what is it? I don't know — a couple of dozen, at least, ministers in the cabinet. I keep losing count, because there are lots and lots of ministers in the cabinet, and each one of them has a responsibility in a ministry. Each one of them has certain powers, and they have people who work for them at the senior management level who also have certain powers.
For the minister to stand up in this House to say that that is the responsibility of the Deputy Minister to the Premier is just plain wrong. Yes, the deputy minister can oversee that and report to the Premier, but it is the job of this minister to make sure not only that the merit principle or the equity-hire principle under his ministry is going to be adhered to, but it is also his job to make sure that other ministers in the other ministries — the couple of dozen or more that are there — are doing their jobs, as well, when it comes to equity hire.
The minister cannot stand up here in this House and shirk his responsibility and expect the critic to let him off the hook that easily, because that's the kind of answer that this minister has given.
So I ask the minister again. If he hasn't done so, what is he prepared to do to make sure his colleagues in cabinet are following the same rules as the merit principle lays out for them to follow, to make sure there are going to be an appropriate number of people accessing not only government jobs but senior management positions as well? The numbers that I've stated are not my numbers. These are not numbers I made up. These are numbers that came out of that minister's mouth himself in September 2009.
So I ask the minister, again, to talk to the folks around him, and please answer the question that I asked two questions ago.
[H. Bloy in the chair.]
Hon. B. Stewart: First of all, we do believe strongly in the merit principle, and that's written into the act — that people with merit qualifications and the best person for the job should get that job. But I think that, you know, the characterization by the member for Fraser-Nicola that we're doing miserably is inaccurate. I know that you might have us delegate to add equity instead of merit as being the principle we hire on. We hire based on merit, and we try to make certain that we do as well as we can under the principle and the values of both.
Just to point out, today in the Globe and Mail, one of the best diversity employers…. This is RBC that was mentioned. Just so you know, the British Columbia government, in a couple of statistics…. Aboriginal employment — they employ about 1.6 percent; the B.C. public service has 2.9 percent. Persons with disabilities — they are at 3.8; we're at 3.7. Women — they're at 50; we're at 59.3.
I think we're doing pretty good. If you think that we can turn that up…. We promised that we're going to get you the actual statistics. We're going to get people to self-identify in that survey, and we'll try to get a better statistical representation. We are committed to working towards the same goal that you are to make certain that we have a balance and cross-section of all ethnicities based on merit.
H. Lali: I do not dispute with the minister that B.C. is ahead of the other provinces in Canada. I don't dispute that. What I do dispute is the fact that the public service in British Columbia, especially the senior management level, does not reflect the face of British Columbia when it comes to the general makeup of the population, as per the equity groups that I've talked about.
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Now, you know, the minister has said — and I don't doubt it — that he strongly believes in the merit principle. I don't doubt that he does. I strongly believe in the merit principle as well. But where the minister and I differ…. He said that the critic would have him replace merit with equity hire. Well, to me it's the same thing. You can't divorce equity from merit and merit from equity.
If that's what the minister is trying to do, then what he's in fact saying is that folks from these equity groups do not have the merit on the same level as the folks that are not from the equity groups. I hope that's not what the minister is saying. You can play on the words: merit, equity; equity, merit. It means the same thing. The principle hasn't changed. The name's changed. The principle hasn't changed.
He can call it merit, and I'll call it equity, because I feel that visible minorities, people with disabilities, women, youth and aboriginal people are not treated on the same level, when it comes to access to positions at the senior level, with folks who are not belonging to these equity groups. They're not. Because if they were, I wouldn't be standing here year after year going after a different minister each time on these same issues. I can guarantee the minister that.
If there wasn't — I don't want to use the word discrimination — that kind of differentiality taking place, I wouldn't be standing here, and there would be no need for a critic for the Public Service Agency. But because that's not happening, you're going to have a critic for the Public Service Agency, and that critic, if it happens to be me, is going to come back here year after year, until the next election anyway, saying the same things until the government does something about it. That's what I'm saying to the minister.
If he doesn't want me asking these kinds of questions, then he needs to go talk to his cabinet colleagues, to the Premier, and make this a priority and send out a directive that there ought not to be treatment on a differential level for folks that belong to the equity and the non-equity groups. Because there is. If there wasn't, you'd see those numbers rise and they would be reflecting the diversity that exists in our society right now.
So the minister, obviously, hasn't really answered that question. I'll give him a third chance to answer that question. Will he talk to the Premier and to his cabinet colleagues to work out some sort of a policy or a directive that is going to go out to all of the ministries asking them to actually implement the merit or the equity hire principle?
Hon. B. Stewart: First of all, I want to just clarify this principle of merit-based hiring. The merit principle is defined as non-partisan assessment of a person's education, experience, knowledge, skills and past work performance. That's enshrined in the act when we hire.
Are you suggesting, perhaps, maybe, that maybe we should change the act so that it includes some other reference to equity or something else? That's maybe a comment that you might consider.
I think that probably one of the things I wanted to share with you is the fact that we are making progress. Of the available population, of which visible minorities in British Columbia make up something like 25 percent, less than 17 percent are actually available to work in the workforce — just so you know — and it's a balance between having the right skill sets for the jobs that we have.
Just so you know, since 1994 when, I believe, you were in government, and the government…. You had this opportunity. There was 5 percent of the workforce in government who were visible minorities. By July of '07 that had increased to 9.5 percent; then in January of '08, up to 10.1 percent; in July of '08, to 10.3 percent; and in January of '09 it's up to 10.6 percent.
Based on the fact that we're doing pretty well against the available workforce and we don't know what the skill sets are that available out there, I don't think that we're doing so bad to be making changes to an act that served us pretty well to show that we're a leader right along with RBC in being one of the better employers in the country.
I understand your passion about this, and we'll make certain that we try to do something positive about that.
H. Lali: Well, thank you. I'm glad the minister actually stated those. I know there was a considerable amount of progress made when we were in government, and some progress made in the last little while. My bone of contention is that there ought to be more progress.
Yes, I was a member of government. We could have done more. I don't deny that. But at the same time, we were criticized by folks on the other side of the House, who are government now. The Liberal Party has been in government for nine years now. Nine years is a long time to start making a difference, and we're just not catching up to that.
I am not at all suggesting to the minister that the act ought to be changed. I don't believe I said that; I don't believe I even implied that. But I will tell you, hon. Chair, what I did say. What I've said is that the act ought to be implemented. I'm not asking for it to be changed.
I'm asking for the act that is there, the merit or the equity hire principle…. We can play with words. Whether we call it merit or equity, it doesn't matter. It's the same principle. The principle ought to be applied. That's all I'm asking the minister to do: to be a strong advocate for the application of that principle, not to change the act.
The minister just quoted the principle of non-partisan assessment, and I guess I'm glad he mentioned that, because that is a strong bone of contention again between
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my side of the House and the minister's side of the House. I can tell you that since 2001 — since this Liberal government has come into power, this Liberal Party — we find that when you look at senior management positions in this government, positions of importance, it's almost like the who's who of the Liberal Party of British Columbia.
That's where I take exception. When a minister says, "We have tried to apply the merit principle based on non-partisan assessment," I say to the minister that that is the one part that is not being applied, because you find so many people with a past with the Liberal Party or who have membership with the Liberal Party or have been operatives with the Liberal Party and organizers, etc. — so many people.
It seems that when it comes to senior service hires, somebody is sitting there looking at their membership card for the donations that they made in order to get them those senior positions. So much of that has happened under this government, and that's wrong. What we're saying to the Liberals, to the government, is that the merit or the equity principle ought to be implemented in the way it was written.
It was envisaged so that people who happened to be with a disability, people who have an aboriginal background, people who are a visible minority or they're youth or whatever their gender orientation is, ought not to be treated in a manner that is different than the folks that would be in the mainstream, the people in the advantaged category as opposed to the disadvantaged category. That's what this whole argument is all about, and because it is not being applied fairly, it leads to this kind of a dialogue.
So I'm going to ask the next question to the minister. And again, the last time round and the time before that with a different minister and the time before that with a different minister, I stated on the public record…. It is there for anybody to see, in every one of those years — what I have said on the record. And one of the things I have said is that you're not going to get the kind of results that you're looking for based on the merit principle.
I know the minister has stated on the record — I have the record from last time right here — that there are some hiring panels that this government has used, but it's not a practice. But there ought to be perhaps a practice of using hiring panels, and then on those hiring panels there ought to be representation from those equity groups in order to make sure that when hiring is done, the principle of merit and equity is applied fairly and in a non-partisan way.
That's why you need folks there. I can tell the minister that if there are discussions taking place in a caucus room or a boardroom or a meeting room or in a cabinet, and a particular group or groups have a person, whether it's business or labour or environment or the educational or the health field or the person happens to be from a different cultural or multicultural background or whatever that particular sectoral group is….
If there's even one person in that room, a room full of people such as this, standing up and speaking on behalf of that particular group that they originated from, the dialogue will be much different than they would be if the person wasn't in that room.
That's why it is important to have folks from the equity groups on those hiring panels to make sure that the law is going to be applied evenly and fairly and in a non-partisan way.
I know from my own personal experience — being in a caucus room and in a cabinet room and being a person who is from the Interior representing rural issues, being a person of a visible minority background and a multicultural background who can talk about those issues — the kind of dialogue that takes place because someone like myself and others who happen to be of the same viewpoint as you are going to raise those points.
So I say to the minister: will he commit to actually standing up in front of the hiring panels that will have representation from equity groups?
Hon. B. Stewart: I can't help but be, I guess, shocked by the characterization that he makes in terms of the fact that people working within government are somehow linked to their political affiliations and that the hiring practices are based on some sort of donations. I'd ask you: what evidence do you have? Present it in this House. Present it to this committee, and show us where these issues lie, where these people are able to craft positions and bypass what is a merit-defined hiring principle.
This position, or this statement, what you're talking about, is totally partisan, and that's not what the merit principle is about. It's about a non-partisan assessment of people's skill sets — what their abilities are, what jobs they've had, what they bring to the table in being able to move this government ahead.
That's why the government is moving in the direction of having one of the best workforces in government, in public service, across the country. It's recognized that, day after day.
You're demonstrative in your assessment of how these people are coming to work here. I think that…. We have a Merit Commissioner. Clearly, if you have evidence like you're suggesting, you should be going forward with that.
I just don't know where you're going in terms of trying to improve multiculturalism in terms of the province and being inclusive and what we're all about. I think that it must go back to something that you made in your statement today in the House in the sense that….
I don't know why you stood out, Harry, but anyways. I say that meaning that as the member for Fraser-Nicola,
[ Page 3595 ]
you describe yourself as having the short end of the stick. I don't know. Maybe you're feeling that you've been treated incorrectly. Anyways, I want to tell you that the public service of British Columbia uses a merit-based principle.
H. Lali: The minister didn't even touch upon the question that I'd asked him about hiring panels and the makeup of the hiring panels. That was my question. Instead, he went about on a deflective…. It had absolutely nothing to do with the question that was at hand, and the minister says that he doesn't know where I'm going with this. Well, that's the problem.
I mean, the real question is: does the minister know where he's going with this? That's the real question. Does he have a handle on his ministry? Does the minister have a handle on the Public Service Agency? Does the minister have a handle on the merit principle? You know, these are all relevant questions.
It's his ministry. He was appointed by the Premier to do a certain job. It's my job as critic to make sure that he's doing his job as well, and if he isn't, I'm going to point it out. I would say that he's been at it for almost a year, that he's not doing his job on behalf of folks in the equity hire groups in order to be an advocate on their behalf and to make sure that they're going to actually be able to access those positions on the same level as folks who are from the non-equity groups.
To go on some sort of a personal thing about statements that are being made in the House and all of that that has nothing to do with these estimates. The minister and I can have a chat anytime over a cup of coffee about those personal kinds of things. I'm talking about his job as minister and his role in terms of the accountability that he owes to the people of this province, and my job as a member of the opposition to hold him accountable on behalf of the people. That's what this is all about.
I asked the minister a specific question about hiring panels, which he hasn't answered. So I ask him again about the hiring panels.
Will the minister support — I know there are some hiring panels because he put that on the record in September — more hiring panels when it comes to senior management positions? Will the minister also advocate on behalf of the equity groups to make sure that there is representation on an equitable level on those hiring panels when those interviews take place for senior management positions?
Hon. B. Stewart: I guess, first of all, I apologize if I made any personal remarks, but I want to make certain that…. I assume from your answer that you don't have any evidence about what you had stated earlier. I'll assume we'll move on from that to how hiring practices in the public service are made today.
The hiring panels that you refer to are a practice that is considered by modern human resource practices to be something that's outdated because it was used as more of the sole hiring mechanism. Today, I'll just tell you a little bit about what's been going on, and this is recognized within industry today to be a modern hiring approach.
Starting in October 2009 the public service has consolidated its services for hiring and staff redeployment in the hiring centre, part of the B.C. Public Service Agency. The hiring centre supports managers across the public service to define their recruitment needs, secure qualified candidates and make hiring decisions, using experienced professionals to ensure consistent application of legislative requirements, such as the merit principle and best practices related to hiring, including background checks, educational and credential confirmation.
Applicants to the B.C. public service can expect more consistent and responsive services from a single point of contact. Over time with the introduction of the recruitment management system, an Internet-enabled interface, applicants will be able to create their own profiles and manage their applications.
Moving to a consolidated service supports better management of the public service's 30,000 employees, more efficient use of the time of hiring managers and applicants, and enables better human resource planning and development.
H. Lali: Okay. I thank the minister. Since hiring panels are outdated, and they don't use them anymore, that's fine.
You talked about a hiring centre — that it's the hiring centre that is used. My question to the minister is: how many people are in the hiring centre, and who are the folks that are at the hiring centre? How many of those folks are actually from the equity backgrounds that I've talked about?
Hon. B. Stewart: The hiring centre is made up of 40 individuals from the Public Service Agency. I don't currently have the breakdown of the individual equity numbers that he's referring to. As a result of the survey, it may be a number…. I can't promise that because surveys are only as good as the number of people that respond to them, but we think that we should be able to provide you some indication of that at the June release of those figures.
H. Lali: That was going to be my next question — if they would be a part of the survey — and the minister has already answered, so I thank him for that.
Obviously, there are 40 people in the hiring centre, approximately. At any point when these positions come available, are there face-to-face interviews that actually
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take place? Who does them? How many people are involved from the hiring centre or other places on each of these interviews?
Hon. B. Stewart: There are a number of different tools they use in terms of hiring. Face-to-face individually, depending on the particular job, may be chosen as a tool. This depends on the actual quantity and number of skills that we're looking for. The hiring centres are typically used in higher volume, where there is a large number of applicants for positions such as clerical, and perhaps, maybe, around financial management. There's no typical one-way, one-size-fits-all.
I'd hope that helps. I've answered the question as best I can, I think.
H. Lali: My next question to the minister is: what mechanism is in place when folks for senior management positions in the public service are hired? I understand the hiring centre. You're looking at within the public service, or entry-level positions. I'm assuming that's what the hiring centre is for. It's for those positions. My question now is specifically related to senior management positions — the executive directors, assistant deputy ministers, deputy ministers or CEOs of some of the Crowns.
These are the senior management–level positions that I'm talking about. What mechanism is used there? Is it still the hiring centre, or is there something else?
Hon. B. Stewart: First off, I want to make it clear that the Public Service Agency doesn't participate or provide support to Crown corporations in their hiring. They're set up, they're separate, and that's their job.
In senior management here within the government the Public Service Agency has a specialized group, of which there is support given to the deputy minister of that particular ministry, Deputy Minister to the Premier, and that's how they end up working on the senior management group hired in government.
H. Lali: Let me try to understand this. I think that the minister said — correct me if I'm wrong; I'm just trying to paraphrase — that the Public Service Agency provides support to the Deputy Minister to the Premier. Am I correct? In other words, does the Public Service Agency send individuals from the PSA to support the Deputy Minister to the Premier, or is it just a hiring panel of one?
Hon. B. Stewart: In senior management within government the support group that I speak of is in a supporting and advisory role. It's usually or typically made up of both the deputy minister and the Deputy Minister to the Premier as well as a couple of other staff and the head of the Public Service Agency, but that arrangement may change, depending on the role. That panel, again, is only advisory, and the final decision would be left to the deputy responsible for the public service employees.
H. Lali: Let me get this clear again. Let's assume for a minute that it's the Ministry of Transportation, so it would be the Deputy Minister of Transportation and a couple of folks from the Public Service Agency who would give the advisory role to the Deputy Minister to the Premier.
You know, maybe the minister can explain. When he said there is the deputy minister involved and a couple of staff from the Public Service Agency who would be providing the advisory role, is that in addition to the Deputy Minister to the Premier?
Then there's a deputy minister from the ministry and two Public Service Agency personnel who would provide that advisory role to the Deputy Minister to the Premier. Is that your understanding as well?
Hon. B. Stewart: I use this example. You're in Transportation, and let's say that you needed an ADM in operations. The PSA team would advise the Deputy Minister of Transportation what they recommend as a process and who they should have on it. That panel may include the Deputy Minister of Transportation, another ADM from Transportation and a deputy minister from another ministry plus a PSA representative that would be on the panel to interview and find that candidate.
H. Lali: Maybe I misheard, but in an answer earlier I thought that the Deputy Minister to the Premier was involved in this in some way or another. What's the role of the Deputy Minister to the Premier in terms of this hiring process?
Hon. B. Stewart: In the situation where a deputy minister hire is being done, the Deputy Minister to the Premier is always involved, but in a hiring of an ADM or an associate ADM, typically he wouldn't be involved. The panel would make the recommendation. He might review it, but it's not critical that he be involved.
H. Lali: Thank you for that clarification. I know the minister made the distinction that if there's a deputy minister involved in terms of a person needed to be hired, the Deputy Minister to the Premier is involved in it. But if it's some other senior management position like an ADM or some other member of the executive, then the Deputy Minister to the Premier is not necessarily involved. Am I correct? Thank you for that clarification.
For any senior management level position, who makes the final decision?
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Hon. B. Stewart: You can tell that we're down to the technical details here. Technically, when a position of senior management is hired, it's on the recommendation of the head of the public service employees up through to the Lieutenant-Governor.
H. Lali: It's not hiring panels, I know. You said that they've done away with them, but there's some sort of a group that does the hiring. Is there any group in which the Deputy Minister to the Premier has the final decision to hire, and if not the final decision to hire, then the decision to hire in an advisory capacity?
Hon. B. Stewart: I guess it's safe to say that all the order-in-council appointments — which is anybody that is in the ADM, associate deputy minister, deputy minister — have to go through this process, where the head of the public service recommends them up to the L-G. He would only get directly involved in the hiring of deputy ministers.
H. Lali: In terms of these hiring groups, is there any effort that has been made thus far to make sure that at least one of the persons on this hiring group is from the equity groups that I talked about? And if not, then will the minister make a commitment to make sure that in the future somebody from the equity groups is on the hiring groups?
Hon. B. Stewart: These hiring groups at this level of senior management are selected for skills, competency and ability to make proper assessments for the skills that are required in this. It's not based on any designated group. That would be more a function if that happened to be a member of the senior executive that was in that position…. They would happen to be on there.
It depends a lot on which ministry we're talking about and the skill sets of the deputies and ADMs that are available. This is all supported by the PSA, so this particular hiring group would make the decision and recommendation to the deputy, who would then, in turn, go up to the deputy to the Premier and the Lieutenant-Governor.
H. Lali: This is the second time that the minister has answered a question. I'm wondering if the minister even gets it. He says that the makeup of these hiring groups is based on skills and competency.
Is the minister saying to me that an aboriginal person or a person with disabilities or a person from a visible minority group doesn't have the skills and the competency, and you can't even find a single person from within the public service to sit on these hiring groups? Is that what the minister is saying, because that's the crux of the matter.
The Chair: Member, Member. Tone is as important for respect in the House. Thank you.
Hon. B. Stewart: No, I'm not saying that at all. I think that we make every effort to try to do that, and of course, I think that I highlighted the aboriginal internship program. If you look through that ministry, there are a lot of people of aboriginal descent that are advising government on how to deal with issues that we're trying to work with in their communities in terms of land use certainty.
We will continue to work on that basis to try to find the people that are from these groups that you speak of, and we're trying very hard to make certain that we're the leader in the country.
H. Lali: Then is that a commitment that in the future, as minister, he will ensure that these hiring groups will have composition from folks from the equity groups that have the skills and the competency? Is that a commitment by the minister that in the future this will happen?
Hon. B. Stewart: First of all, I want to reiterate that when these support panels are made up for senior management, they're put together on the basis of people that can make the decisions with the right skill sets as we've talked about — competencies and ability to make assessment. You know, it doesn't matter that they may have a disability or be a different ethnicity. If those are the people, we happily will include them. There's no reason that they wouldn't be included.
It's important to remember that the positions within government are based on a merit definition, which is non-partisan, assessment of the person's education, experience, knowledge and past work experience. We're going to continue to hire on that basis.
We'll continue to work towards the goal of what you're suggesting, but it's not my role as a minister to direct the PSA to start operating that way.
H. Lali: This is where the minister and I differ. It is your role to actually direct the Public Service Agency, to tell them that the merit principle is applied, and that folks from the equity groups have merit. If they're applying for a senior management position, they wouldn't be applying if they didn't have the skills or the competency to get into middle management and upper management positions.
That's the whole crux of the matter that I'm trying to explain to the minister. Folks from these equity groups have the skills and have the competency and have the experience, and it ought to be recognized.
One of the reasons that I believe it's not being recognized is because the makeup of the senior management
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positions in government, in the public service, does not reflect the equity makeup of our population in this province. It is for that reason that it is necessary to have people from these equity groups have a position on these hiring groups so that the merit principle can be applied. I'm wondering if the minister agrees with me or if at least the minister understands the point I'm trying to get across.
I understand. We both believe in the merit principle. I know that. What I'm saying is that it is necessary to go that extra step beyond to make sure that folks from the equity groups are getting their fair shake of the deal for these employment opportunities at the senior management level. They have not historically been included on those hiring panels. I would imagine they're not being included on an equal level on these hiring groups that the minister is talking about, and it is for that reason — one of the reasons, anyway — that they're not being included as successful applicants for those senior management positions.
Would the minister agree with me that it is necessary to make sure that folks from equity groups are included in those hiring groups?
Hon. B. Stewart: I think that one of the things you're suggesting is that these equity groups are not being recognized, and I'm going to tell you that I don't agree with you. They are being recognized. The statistics that I've already shared with you today show that for women in senior management, women in all occupations, visible minorities, aboriginal peoples and people with disabilities, the numbers are steadily increasing. They're taking a larger share.
Are they tracking identically to what's happening in terms of our in-migration of people coming from different countries? I wouldn't go so far as to say that, but I will be happy to share the information about how we're doing in terms of the survey that we've promised you.
The process that we're using is working to make certain that we are moving in the right direction. If I was to take your approach, which I would if I was starting a brand-new organization, a new government…. If I had that opportunity where I could start with a clean sheet, I'd sit down and say: "Okay. What's the makeup today? Well, jeez, we need to have some people from this community and that community over there." I'd do that if it was a new enterprise, but it's not.
We're working with an enterprise where we have people that have worked in this government for many years, given a lot of hard work, developed skills, and we continue to use them. They understand and appreciate it. I don't see any of the concerns about their lack of attention towards visible minorities or people with disabilities in terms of the hiring practices.
I think that it's most important that you recognize that we've been making progress and that we're going to continue to do that. I'm sure that your aspiration one day, the way that it should be made up today, will be accomplished.
H. Lali: I'm sure that the minister knows the concept of uniformitarianism, which means that the only thing that remains constant is change. So I don't agree with the minister that it has to be a new government to start with a new slate to say: "This is when we're going to make the change." You can make the change at any time. If it is fair, equitable and it is something that is positive and progressive, you can make that change at any time.
I don't agree with the minister that if he comes in with a clean slate…. He did come in with a clean slate a year ago when he came in as a new minister. So I would say to the minister that change is necessary, and this change is positive. It is time that governments — not just this government; governments all across Canada — actually adopted that kind of a change to make sure that positive results occur.
Now in terms of the stats that the minister put on the table, I would like to dispute some of that. He is absolutely correct in that in terms of the senior management level positions, this province…. I would say it started, you know, even towards the tail end of the Social Credit government, the NDP years, when we were in office, and now with the Liberals — that women have made great strides. I think the minister said at one point that 59 percent of the senior level positions are with women.
That's a good thing. That is a very good thing. We have succeeded on that front. But I would venture to say this: how many of those women are of a visible minority or an aboriginal or people with disabilities or the gender issues that are involved in it — the transgendered, etc.? We've fail miserably on that front when it comes to that.
I would say that great strides have been made in the general public service in terms of entry-level positions and that the other equity groups other than women, especially women, have made great strides as well. But when it comes to senior management positions for people with disabilities, visible minorities, aboriginal people, the equity groups I talked about other than women, you can't hold a candle to it. You just can't. Those are areas where we are failing as a province to meet those goals.
That is the area where we need representation on the hiring groups from those groups to make sure that those levels come up, because to say that we need to apply the merit principle based on skills and competency and all that…. The flip side of that is to say — what? — people who are from equity groups don't have the skills and competency?
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So you can't use that argument to say skills and competency and merit because they are people who are in the public service. I'm assuming they were hired on the basis that they have skills and competency. I'm assuming that as they move up the ladder to lower-management, middle-management and some of the upper-management positions, they've got some skills and competency, and it's the next step to senior management. If they didn't have the skills, the competency and the merit, they wouldn't be there. They wouldn't have got those entry-level positions to begin with.
I believe the minister is almost there to make that next little step — which actually, in terms of the bigger picture, would be a quantum leap — which is to actually admit that yes, perhaps the opposition critic is correct in saying it's time we put folks from those equity groups on those hiring groups who make those decisions, who advise the deputy ministers, who advise the Premier's office, that this is a person who ought to be hired so that the order-in-council could go to the L-G for a decision.
It's that time. It's that time for us to do that. You know, the minister is in a position. He's still fairly new. He can adopt that change and make that change and carry it forward to cabinet. I hope that he does, so that the Premier will sign off on it, and it's a directive that is sent out to the entire Public Service Agency that the time for the equity groups has come and it is now, today. Would the minister agree with that?
Hon. B. Stewart: You know, you started off by talking about how we've been doing with women in government. I guess that we're starting to become a minority, men in government, being that we only represent 41 percent.
Anyways, I think it's safe to say we disagree that we have an issue on our hiring practices. The fact is that I don't agree that the policies of the past government that you had in place about different equity groups were necessarily the way to get the best people to do the job. I think that the way we've built a structure of people that have come from all walks of life, that have come with the skill sets….
You said: "Why would we deny anybody from an equity group that had the right skill set?" We don't disagree on that. So, you know, the bottom line is that if you think there is an inequity here that should be addressed, the Merit Commissioner is something that you can certainly make your statement to.
I'm not going to make a directive to the head of the PSA and direct that type of thing, because I think that is old-school politics. I don't think that has any place for getting the best people and doing the right things for the citizens of British Columbia.
The Merit Commissioner is an independent officer of the Legislature that has regular audits, and reviews are conducted based on the principle of merit, which I read to you several times. Merit is defined as "non-partisan assessment of a person's education, experience, knowledge, skills and past work performance," and there's no evidence that there's a problem with access for these groups that you speak about in getting into government based on the numbers that I've provided you.
H. Lali: Well, for a moment there the minister had given me a glimmer of hope, but then he's sort of gone about five steps backwards. I wouldn't be standing here debating with the minister if I thought that the merit principle was being followed.
The fact is that it is not being followed. It is being ignored. And as a result of that, who's paying the price? Visible minorities, aboriginal people, people with disabilities and the equity groups. They're paying the price because the merit principle is not being followed. It's overlooked.
When we were in government, we made sure that merit was not going to be ignored. That meant that people who were of merit from visible minority groups, people with disabilities and aboriginal people would not be ignored but rather would have access to those opportunities on the same and equal level as folks who are from the non-equity groups.
Obviously, this government doesn't seem to believe that and then just sort of keeps going back to some outdated notion of what the public service should look like. But in any case, I am going to move from that area, because it doesn't look like I'm going to get anything else out of the minister here.
I want to actually move to the next item, on antiracism. In the March 17 release by the Ministry of Citizens' Services titled "Day for Elimination of Racial Discrimination Proclaimed," it claims that since July 2009 the province of B.C. "has funded 42 multiculturalism and antiracism projects through EmbraceBC."
Now, from the EmbraceBC website, accessing their funding overview for 2009-2010, there are a total of 32 projects that were listed — 16 fall under EmbraceBC, and 16 fall under the British Columbia antiracism and multiculturalism program. However, the latter category is indicated to have been replaced by EmbraceBC in July 2009, and five of the programs are repeated in both sections.
So it appears that only 16 programs have been listed as receiving multiculturalism and antiracism funding from July 2009 onwards. Can the minister comment on this and tell me why this discrepancy exists?
Hon. B. Stewart: I'm glad that we've been able to move on.
EmbraceBC aligns with the act to provide newcomers and long-time residents with an understanding of
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multiculturalism and antiracism and to support projects that recognize the importance of cultural diversity and the elimination of racism. The goal of EmbraceBC is to ensure that communities in B.C. are inclusive and take pride in multiculturalism, with the objective to build a provincewide culture of inclusion that welcomes and accepts and embraces differences.
EmbraceBC was launched on July 20, 2009. It receives its federal funding under the memorandum of understanding between the Ministry of Citizens' Services and the Ministry of Advanced Education and Labour Market Development. The provincial contribution to the $1.6 million program was $490,000 for 2009-2010, and it is estimated to be the same in 2010-2011.
EmbraceBC, launched in July 2009, replaces the B.C. antiracism and multicultural program, formerly known as the BCAMP program. Seventeen projects were funded under the BCAMP in 2009-2010. The program will come to an end once these contracts are completed in March of 2010, including the three former critical incident response model communities now known as Organizing Against Racism and Hate. Solicitation for all the EmbraceBC program elements has taken place in a phase manner since July of 2009, with 45 projects and initiatives underway to date.
H. Lali: Thank you for that description. Now, has the press release already counted the funding for the 2010-2011 fiscal year? I think that the minister said 45, but I've got 42 down here. Is that why the number totalled 42, even though, based on information on EmbraceBC's website, there were only 16 organizations receiving project funding?
Hon. B. Stewart: The news release that you referred to is funding from the 2009-2010 fiscal year, and that's the 42 projects that you mentioned. Then in 2010-2011 the same amount of money is available but has yet been allocated.
H. Lali: I've got a couple of minutes. I have two questions. When will the multiculturalism and inclusive communities office release the 2010-11 funding overview?
Hon. B. Stewart: For the new money for the 2010-11 year, there are six elements of EmbraceBC. Each one of those has different programs, and they're released throughout the year.
The Chair: Noting the hour.
H. Lali: Noting the hour, this is my final question. I want to put this on record, and then I'll ask my question.
There are some concerns about the open tendering in the BCSAP service streams. I mean, the stated rationale is that the B.C.-Canada transfer agreement requires it. However, what we understand is that the agreement requires a transparent tendering process, and this agreement is due to be signed April 2010. Hence, the open tender has been postponed to 2011. At that time, 65 percent of….
The concern is that there are some unforeseen negative outcomes of open tendering that actually create political fallout for MLAs and their communities — for example, when a longstanding and respected service provider loses a contract, such as Surrey Delta Immigrant Services Society losing their settlement programs after founding it in the community over 28 years previously, MOSAIC losing their settlement that same year and VAST losing their funding for grief and trauma to an organization that had no expertise.
In many cases the government has had to actually stickhandle and extend contracts to the unsuccessful persons to manage the fallout, which actually results in outcomes for these pots of money due to duplication of services. One of the solutions is rather than run an erratic, ill-conceived tendering process that has no predictable outcomes and is costly, the ministry should use the time and money to develop accountability mechanisms and instead negotiate renewals every three years based on performance indicators of emerging needs.
This is a very dynamic and vital sector that does not benefit from such disruptions. Would the minister agree?
Hon. B. Stewart: The question that you raise there is a program that's administered by Advanced Education and Labour Market Development, and as such, you'll have the opportunity to ask that question from them at a later time.
Vote 21: ministry operations, $45,063,000 — approved.
Vote 22: Shared Services B.C., $503,438,000 — approved.
Vote 23: public affairs bureau, $26,429,000 — approved.
Vote 24: Public Service Agency, $37,669,000 — approved.
Vote 25: benefits, $1,000 — approved.
Hon. B. Stewart: I move that the committee rise, report resolutions and ask leave to sit again.
The committee rose at 6:17 p.m.
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