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
Wednesday, April 14, 2010
Volume 14, Number 3
Introductions by Members
Introduction and First Reading of Bills
Bill 10 — Veterinarians Act
Hon. S. Thomson
Bill M201 — Protection of the Homeless Act, 2010
Statements (Standing Order 25B)
Nite of Hope breast cancer fundraiser
Day of Pink
S. Chandra Herbert
Richmond Therapeutic Equestrian Society
Parent participation preschools
Greater Vancouver Regional Science Fair award recipients
History of education in Campbell River area
Impact of harmonized sales tax on tenants and condo owners
Hon. C. Hansen
Impact of harmonized sales tax on funeral industry
Hon. C. Hansen
Funding for public health programs
Hon. K. Falcon
Audit of B.C. Ferries data security system
Hon. S. Bond
Capital project plan for Interior heart and surgical centre in Kelowna
Hon. K. Falcon
Orders of the Day
Second Reading of Bills
Bill 9 — Consumption Tax Rebate and Transition Act (continued)
Hon. I. Chong
Hon. M. Polak
Hon. K. Krueger
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Housing and Social Development (continued)
Hon. R. Coleman
S. Chandra Herbert
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WEDNESDAY, APRIL 14, 2010
The House met at 1:35 p.m.
[Mr. Speaker in the chair.]
Introductions by Members
R. Sultan: Mr. Speaker, this year marks the 100th anniversary of Rotary in Canada. I think we're all familiar with Rotary and its global reach, but just to remind you, this is the organization that is investing half a billion dollars in building schools in Afghanistan, that has set out with the modest goal to eliminate polio from the world and is close to reaching that goal, and locally, on the North Shore, operates and helps fund the North Shore Safe House.
We have two representatives of Rotary in West Vancouver visiting us today. We have Jacci McTavish and her friend Jill Hossie, very active Rotarians. They are accompanied by Sharon McGavin, who coordinates the StrongStart program at Eagle Harbour School.
Would the House please make these three ladies welcome.
M. Mungall: Well, coming in from the photo outside, where we were posing for a stop-bullying campaign today, I ran into a local Nelson resident and was very surprised to see this person here in the precinct today. She's an amazing resident of Nelson, a strong activist and a passionate advocate for people with disabilities. Beryl Clayton is here in the House today. May everybody please make her feel very welcome.
E. Foster: In the precinct today are two constituents and good friends of mine from Vernon, Derek and Marjorie Allen. Having worked as a CA and a longtime friend of the Minister of Housing and Social Development, Marjorie has been here to the House many times, but this is Derek's first trip. I would ask that the House make them both very welcome.
H. Bains: It is my pleasure to introduce to the House two groups of grade 5 students from Strawberry Hill School, which used to be in my constituency. Now it is just outside. On behalf of my colleague from Green Timbers, I would like to welcome them to this House — 30 grade 5s with ten adults accompanying them. They are visiting this House, and please help me welcome them to this great House.
R. Cantelon: On Saturday night a young man with great promise, great energy and great leadership potential died suddenly. Blair McKinnon left this world too quickly and, as a member of the Nanaimo Young Professionals, showed great promise in what he could do and what he could accomplish. I hope we're all going to learn from his example of leadership and community involvement. I think that all of Nanaimo is sorry for his loss but inspired by his gifts.
I ask the House to share with the McKinnon family in their mourning.
First Reading of Bills
Bill 10 — veterinarians act
Hon. S. Thomson presented a message from His Honour the Administrator: a bill intituled Veterinarians Act.
Hon. S. Thomson: I move that Bill 10, entitled the Veterinarians Act, be introduced and read for a first time now.
Hon. S. Thomson: Today I am pleased to introduce Bill 10, the Veterinarians Act. The bill proposes to repeal and replace the current Veterinarians Act with an updated statute that is consistent in principle with legislation governing other self-regulated professions in British Columbia, including the Health Professions Act and the Social Workers Act.
The purpose of the bill is to ensure that the regulating body of the veterinary profession has the legal authority needed to effectively regulate the safe and competent practice of veterinary medicine and to protect the public interest. Under the current Veterinarians Act, the British Columbia Veterinary Medical Association has a broad mandate to provide both member services and regulatory functions for the veterinary profession.
The bill proposes to continue the BCVMA as a college and focus the mandate of the college on regulating veterinary practice, consistent with professional colleges of physicians, nurses, dental surgeons and pharmacists.
In order to ensure fairness and transparency, the bill clarifies and improves processes for registration, complaints, investigations and discipline. The bill improves checks and balances and increases the number of lay representatives on the council of the college. The bill also provides for certification of animal health technicians.
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This bill was developed in response to advice from the B.C. Veterinary Medical Association, the Animal Health Technologists Association of B.C., individual veterinarians and the general public.
I am pleased to present the bill in this House today. I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.
Bill 10, Veterinarians Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Bill M201 — Protection of the
Homeless Act, 2010
J. Kwan presented a bill intituled Protection of the Homeless Act, 2010.
J. Kwan: I move that the bill intituled Protection of the Homeless Act, 2010, be introduced and read a first time now.
J. Kwan: Today is Anti-Bullying Day, and discrimination is one of the most hideous forms of bullying. The Protection of the Homeless Act proposes amendments which would add social condition to the B.C. Human Rights Code as a prohibited ground of discrimination.
Marginalized groups such as those who are homeless or low income will be covered under the proposed Human Rights Code amendment. This amendment is consistent with federal recommendations to human rights bodies in the recent MacKay report of 2009 and the earlier La Forest Commission of the year 2000. Other jurisdictions such as New Brunswick, Quebec and Northwest Territories have adopted such measures already.
The addition of social condition would be of practical benefit to those suffering from socioeconomic disadvantage, not only because they would have a legal recourse for discrimination where previously there was none, but also because the statutory human rights regime would provide a more accessible venue for those who, by definition, lack resources to fund an expensive court challenge.
In addition, the educational and symbolic value of adding social condition to the B.C. Human Rights Code will send an important message to the public that they are equally deserving of dignity and protection from discrimination. This legislation would also respond to Canada's international commitments and the recommendations of human rights agencies.
I move that the bill be placed on the orders of the day for consideration at the next sitting of the House after today.
Bill M201, Protection of the Homeless Act, 2010, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
(Standing Order 25B)
NITE OF HOPE
BREAST CANCER FUNDRAISER
S. Cadieux: Last Thursday I had the pleasure of attending the White Rock–South Surrey fifth annual Nite of Hope. This important event raises money to support the Canadian Breast Cancer Foundation in their fight against the terrible disease.
It was a night of hope and of great success, and thanks to more than a thousand volunteers and the generosity of local residents $192,000 was raised for cancer research. This donation further complements the $1.4 million Nite of Hope has raised across B.C. since 1994. The fight against cancer is better armed, thanks to this organization.
A big part of this initiative's local success is thanks to one of my constituents, Debbie Rumley. Through her commitment to volunteering and as a cofounder of White Rock–South Surrey's Nite of Hope, she has demonstrated strong leadership in our community.
Debbie was diagnosed with breast cancer in 2001, and after attending a Nite of Hope in Richmond, she was inspired to do her part and bring people together to support cancer research and fight the disease. Through hard work and dedication, Debbie was instrumental in bringing the event to White Rock–South Surrey. Through her efforts and those of co-chair Laurie Ishikawa and many volunteers, the Nite of Hope has raised close to $600,000 over the last five years for the Canadian Breast Cancer Foundation.
Cancer is a disease that has touched all Canadians in some way. For myself, both of my aunts fought breast cancer. Whether it's a family member, a friend or co-worker, the commitment of people like Debbie Rumley is making a difference in those people's lives.
I would like to ask the House today to recognize the hard work of Debbie and the Nite of Hope.
DAY OF PINK
S. Chandra Herbert: I rise today to speak on the Day of Pink. The Day of Pink began in Nova Scotia when two students heard about a younger student who was bullied for coming to school wearing a pink shirt. They decided to do something about it and bought 50 pink shirts for their classmates.
The next day a sea of pink poured into the school in support of the student who had been bullied, with students
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decked out head to toe. That sea of pink has spread across Canada and indeed across the world.
Bullying is about power. It's about thinking one is better than another and that the other's difference is lesser. It often takes the form of attacking diversity in seeking conformity. Bullying is definitely not just about kids being kids. It can be sparked off by the different smell of someone's lunch, the fact that they want to date girls instead of boys or boys instead of girls, someone's racial and cultural heritage or the fact that a kid living in poverty comes to school in clothes that don't quite fit.
Bullying doesn't stop in the school yard, however. It happens on our streets, in our homes, in workplaces all across this province and, no surprise to members, in this House. Bullying is assuming one knows best and that others should suffer if they disagree or are different.
To address bullying, it takes more than saying: "Don't be a bully." We're all taught to be nice when we're younger, yet bullying still occurs. To stop bullying, we must embrace and accept difference. There's so much to be learned from each other.
To stop bullying, I say we must embrace love. You don't hear politicians talk much about love, but I believe that's the only way we move away from hate and towards celebration of our diversity. As Martin Luther King said so well: "Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that."
L. Reid: Today I rise to talk about an organization that is near and dear to my heart, and I dedicate my remarks to Frances Clark, who is a Richmond icon. I speak of the Richmond Therapeutic Equestrian Society, which provides the benefits of horseback riding to people with disabilities.
While participation in some activities may be denied to those with a disability, tremendous accommodation is possible astride a horse. Therapeutic riding is recognized as an aid to treating various physical, mental and emotional disorders. Reported benefits include improved balance and coordination, increased confidence and a sense of achievement. Imagine the independence mobility brings.
The society was founded in 1995 through the cooperative efforts of a group of Richmond residents and the Richmond Committee on Disability working in partnership with the city of Richmond, which had identified the need for a therapeutic riding program. The society was incorporated in 1995 and certainly has continued to do spectacular work.
The riding community in Richmond has risen up over the years and has provided horses, provided barn spaces, provided riding arenas. In the fall of 2002 the society moved their program to the Twin Oaks Farm on No. 3 Road. Twin Oaks generously reconstructed a space that allows the therapeutic equestrian community to actually host their riding program on its premises.
The society's program began in May of 1998 under the direction of the Canadian Therapeutic Riding Association and the certified-instructor program. So the quality of the program is tremendous; the quality of the experience the children receive, first-class.
This Sunday, April 18, you will see the 15th annual program that carries forward in the community, which is all about "Lead with your heart." It is a luncheon that takes place at the Richmond Executive Inn, and it is about how we honour, how we come together as a community to continue to build something that is incredibly fine.
It is important to support youngsters that have disabilities in our communities. I take my hat off to the Richmond Therapeutic Equestrian Society, which has done an outstanding job over the years.
PARENT PARTICIPATION PRESCHOOLS
K. Corrigan: Well, I'm thrilled to be able to talk about jewels that can be found in communities across British Columbia, and those are parent participation preschools. I speak from wonderful personal experience on this when all four of my children attended a parent participation preschool. These are cooperative, non-profit societies administered by the parents where parents also take turns assisting in the classroom in a program led by a professional early childhood educator.
The children benefit from a large, supportive community of children, teachers, parents and families. It is also highly beneficial for children to have a very positive first educational experience shared with a parent or other close caregiver. Children also improve their social skills and their cognitive scores.
Parents benefit from active involvement in their child's early education in a supportive community. They improve their parenting skills and often their job skills with this affordable preschool option.
Parent participation preschools are good for communities. There are 37 member preschools in British Columbia serving a diversity of families. Many parents receive child care subsidies. There are many special needs children, and the vast majority of schools have a number of ESL students.
I want to mention another important value to our communities. The B.C. Council of Parent Participation Preschools' alumni survey confirmed that the vast majority of parents who volunteer early in their child's life at parent participation preschools continue to volunteer in schools and other community organizations. What a wonderful legacy they leave for the future.
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The B.C. council has been in operation for more than 60 years, and several preschools have celebrated being open for 50 years or more. This is a testament to this wonderful cooperative model for preschool education, a testament to this organization, to the highly skilled teachers, and to those families themselves that are committed to giving their children a wonderful start in life.
GREATER VANCOUVER REGIONAL
SCIENCE FAIR AWARD RECIPIENTS
R. Lee: Last weekend I had the pleasure of attending the Greater Vancouver Regional Science Fair, which took place at the University of British Columbia from April 8 to April 10. It was a thrilling experience to be among so many enthusiastic high school students, who participated to display their scientific experiments and make their mark in the scientific realm.
Burnaby is home to many technological firms, and with the demand for health care on the rise, scientific knowledge is an important element to ensuring a strong future for B.C. It's important that we foster the educational aspirations of British Columbians. Amongst the science fair winners were several high school students from Burnaby North, Alpha, Moscrop and Burnaby South.
In the category of life sciences I would like to congratulate Carson Shi, Timothy Branch, Katrina Koehn and John Wei for their award-winning projects. In the category of physical and mathematical science Nahmhee Kim from Burnaby North Secondary won an award. Engineering category awards included winners Valeriya Zaborska, Natasha Sharma and Sever Topan.
All the participants did a fantastic job in presenting their science projects and experiments. Honourable mention also went to Rachel Ho, Alison Tam and Amy Wang, while Matthew McRoberts and Nicholas Mani-Flower of Sentinel Secondary swept the awards with the BCIC Young Innovator Scholarship and the UBC engineering award.
I would like to thank all of the volunteers, judges and fair organizers for their time and dedication to hosting this event. I would also like to thank all the teachers who provided their mentorship to these successful students. You are truly making a difference.
HISTORY OF EDUCATION
IN CAMPBELL RIVER AREA
C. Trevena: We often have heated debates about education in this chamber, but I'd like to reflect for a moment on the history of education in my constituency of North Island, as 2010 marks 100 years of school in Campbell River.
In 1910 five students attended classes in rooms at the then Willows Hotel Annex. It closed two months later because of student numbers. It lacked the mandatory seven students of the time to make it viable, but it was a short gap for the growing community of Campbell River. By the next year, student numbers had burgeoned to 16, and the hotel annex wasn't big enough.
The first dedicated schoolhouse was built in the community. It was on the corner of Cedar and 9th, nestled then in the trees overlooking the ocean, and it served the community for a decade before it, too, was superseded and the Elm Street School opened.
As the community evolved, so did the education system. At the end of the Second World War school district 72 was created, with a student roll of 583, and another school was built at that time in an area which was very little developed and quite rural. That was the then Campbell River Junior Secondary, and within 14 years it took close to 1,000 students. It's now the location of Ecole Phoenix Middle School, and those who know Campbell River will know that it's a very urban area.
The years have seen many changes, and the community, too, has evolved. Schools have opened, and schools have closed. Parents, teachers and the community have dealt with all the upheavals — high schools, junior highs, middle schools, elementary, the blending between high school and colleges and, next year, the introduction of all-day kindergarten.
Like all members in the House, I have a reflected pride in the dedication of everyone committed to education in my constituency — the school district, the school trustees, the teachers, the teaching assistants, the parents, the principals. Campbell River has come a long way since those days of Willows Hotel, but the commitment to high-quality education has not lessened.
IMPACT OF HARMONIZED SALES TAX
ON TENANTS AND CONDO OWNERS
C. James: Yesterday when questioned about the impact of the HST on renters, the Finance Minister dismissed those concerns. He said that the increases will be very slight, even though the B.C. Apartment Owners and Managers Association has said that the impact will be huge. We know that condo owners are facing the same pressures as renters. In quoting a strata expert, Deryk Norton of the Vancouver Island Strata Owners Association said that strata fees will go up as a result of the HST.
My question is to the minister. Will he finally admit that the HST will not only hurt renters, but it'll also hurt condo owners in the pocketbook?
Hon. C. Hansen: Currently condo fees and residential rents are exempt from the GST, and they will be exempt from the HST.
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What's interesting from the Leader of the Opposition is that on one hand, they're saying that small business operators in the province who are currently paying PST will not pass those savings on, and now she's arguing that landlords, in fact, do pass on some of these costs to eventual renters.
But I will be very clear to the Leader of the Opposition, and I will repeat what I said yesterday. Yes, there is going to be an impact on the cost to landlords, and those are very small in terms of the overall costs. It is estimated that the overall cost increase to a landlord would be in the neighbourhood of about 1 percentage point.
Mr. Speaker: Members.
The Leader of the Opposition has a supplemental.
C. James: The Finance Minister continues to brush aside the real concerns of renters and condo owners. The minister knows that the cost for everything will go up. Maintenance fees, landscaping, roofing, window washing, gardening, replacing light bulbs — all of those costs will go up. Marg Gordon of the B.C. Apartment Owners says: "It will be really bad. It's going to add an added cost that we've never had before."
My question, again, is to the minister. Why is he brushing aside these real concerns, and why won't he admit that the HST is going to lead to higher fees for condos?
Hon. C. Hansen: I think what the Leader of the Opposition just said is an example of the kind of misleading information that the NDP are putting out to British Columbians. Because, Mr. Speaker….
Mr. Speaker: Continue, Minister.
Hon. C. Hansen: When the Leader of the Opposition says that everything for landlords is going to go up in cost, it's absolutely false. The Leader of the Opposition is wrong. There are some things — for example, the cost of a painter for painting some walls once every couple of years — that might be slightly more. But I'll tell you something else. Once the embedded PST comes out of the cost of the paint, that paint will be less than it otherwise would be because of the adoption of the harmonized sales tax.
Mr. Speaker: The Leader of the Opposition has a further supplemental.
C. James: It's a bit rich for this Finance Minister to use the word "misleading" when we know how the government brought in the HST for the voters of British Columbia. Mr. Speaker, 600,000 British Columbians living in condos will be impacted by the HST — 600,000. And the minister….
Mr. Speaker: Just take your seat.
C. James: The only response those 600,000 owners get from the minister is that they're spreading misinformation. The HST is a bad tax that comes at a bad time and a tax that the B.C. Liberals forced on the people of British Columbia to cover up their budget deceit. The people of British Columbia are not buying this minister's or this government's line.
Again, my question is to the minister. Will he stand up now in this House and explain what he's doing to protect 600,000 people in our province?
Mr. Speaker: Members.
Hon. C. Hansen: I can tell the Leader of the Opposition what we're doing on this side of the House. We're delivering on exactly what we committed to voters in British Columbia 12 months ago — that we're going to keep B.C. strong, that we're going to make sure we create jobs in this province. And that's exactly what the harmonized sales tax will do.
Mr. Speaker: Continue, Minister.
Hon. C. Hansen: You know, what we saw a year ago was a Leader of the Opposition who, on the carbon tax, was taking her marching orders from Bill Tieleman. Now she's taking her marching orders from Bill Vander Zalm. She was wrong on the carbon tax. She's wrong on the harmonized sales tax.
Mr. Speaker: Members.
Hon. C. Hansen: This is an opportunity for the Leader of the Opposition to stand up and actually demonstrate who is actually leading the New Democratic Party today. She can stand up and she can tell British Columbians, including the condo owners in British Columbia: are they in favour of it? Are they going to keep it? Are they
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going to get rid of it? Are they going to jack up a bunch of other taxes, like the Energy critic said? Or are they, in fact, just going to keep it, as the Finance critic says?
B. Ralston: Clearly, by his comments, the Finance Minister doesn't accept that literally millions of people in this province are opposed to the HST, from every political party across the province. It's clear that he's just not listening and he's not willing to listen to the people of British Columbia.
The executive director of the Condominium Home Owners Association of British Columbia, Tony Gioventu, said: "Cost pressures from the HST will cause condo fees to increase by 2 to 4 percent."
I appreciate that the minister didn't do any studies before he introduced this tax, and he's not willing to listen to people out there, but does he have anything to say to condo owners other than just: "Good luck"?
Hon. C. Hansen: I would say to the condo owners association representatives that that number that they're using is wrong. If they would like to contact my ministry, we would actually work with them and sit down so that they understand the very small impact that it may have on condo strata councils in the province.
Condo fees are exempt from GST, and they will be exempt from HST. Some of the costs are going to go up, and some of the costs are going to come down that they're faced with. We'd be pleased to work with them on that.
Mr. Speaker: Continue, Minister.
Hon. C. Hansen: It's interesting that they're asking that question: "Which ones?" It's obvious they haven't done their own homework. The vast majority of costs that are incurred by a landlord or by a condo strata council will not be incrementally affected by HST. Some things will actually come down in price, and the vast majority of them are going to stay the same.
Mr. Speaker: The member has a supplemental.
B. Ralston: Well, renters are wrong. Condo owners are wrong. The executive director of the condo owners association is wrong. I'll take the word of people who are in that business over the word of the Minister of Finance any day of the week.
It's clear that the HST will drive up condo fees for over 600,000 people here in British Columbia. Why is the minister still in denial of this fact?
Hon. C. Hansen: He should have continued the list. He should have talked about the forest industry that's looking forward to creating thousands of new jobs because of the harmonized sales tax. He should have talked about the motion picture industry sector in British Columbia, which is quite excited about the harmonized sales tax because it will create thousands of jobs.
He could look at sector after sector in British Columbia and the strong support that's out there for the harmonized sales tax by those industry leaders and those job creators because they know that this is good for the B.C. economy. It's good for job creation in British Columbia.
I challenge the Finance critic from the official opposition to stand up and tell us what the NDP policy is on the HST, because it is clear as mud.
S. Simpson: The increased costs for condominium owners are spread, due to the HST, across every aspect of building operations. For example, Mr. Tony Gioventu, of the Condominium Home Owners Association, stated: "When it comes to a new roof, when you paid only 5 percent GST on labour, it will cost you 12 percent HST as of July 1."
This is potentially thousands of dollars out of the pockets of these homeowners, depending on the size of the projects. Can the minister tell us why it's okay to add 600,000 condo owners to the millions of other people that he's hurting in this province with the HST?
Hon. C. Hansen: I challenge all of the NDP members to actually go into their own website and fix the lies that are in their website today.
Mr. Speaker: Members.
Minister, I'll ask you to unconditionally withdraw that last comment.
Hon. C. Hansen: I will withdraw.
Mr. Speaker: Continue.
Hon. C. Hansen: Mr. Speaker, I challenge the NDP members to actually fix the blatant misinformation that is on their website today.
Mr. Speaker: Continue, Minister.
Hon. C. Hansen: Mr. Speaker, we know there is a lot of misinformation that is floating around on the Internet sites today. I think it's incumbent upon all members in this House, on both sides of it, to stick to the facts and to actually make sure that seniors and other British
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Columbians are not fed the kind of fearmongering misinformation that is floating around, including from the NDP's own website.
Mr. Speaker: The member has a supplemental.
S. Simpson: The tragedy for British Columbians is that they have no way to fix the way they got fooled by Liberal misinformation in the last election. Story after story, broken promise after broken promise in that election, and they can't fix it till 2013. But be assured they will, Mr. Speaker.
IMPACT OF HARMONIZED SALES TAX
ON FUNERAL INDUSTRY
S. Simpson: Moving on to another topic related to the HST. We know that the B.C. Liberals were very enthusiastic to talk about death taxes during the last election. Now the Canadian-Independent Group of Funeral Homes is talking about death taxes today, and the death tax they're talking about is the HST — hundreds of additional dollars for the cost of a typical funeral.
Will the Minister of Finance tell this House why, when people are at the most ultimate point of their grief, he's prepared to put his hand in their pocket and take their money?
Mr. Speaker: We're not continuing, Members.
Hon. C. Hansen: Let's actually look at the costs to a funeral home operator. For example, if they're going to put new carpet down in the funeral home today, they're going to be paying PST and GST on that. They get the GST rebated. They don't have to pass that on to their clients and the families that use their services. The PST that they pay on that carpet today — they have to build that into their costs. That's the big advantage of a value-added tax — that the funeral home operators will save that.
The same is true of a hearse. If they were going to buy a new hearse for the funeral home, today they would pay PST on that. They don't get that back; they have to build it into their costs. After July 1 if they buy a hearse, they will get the full rebate of the full HST amount. So there are costs that come out of those.
The other thing that's important for funeral home operators to consider is that we have lowered the tax on small businesses to 2.5 percent, and the year after next it's going to be eliminated completely.
The other benefit that funeral home operators get in British Columbia is that we have increased the threshold for that small business tax rate now up to half a million dollars, and I can tell you that's a big, big benefit for the funeral home industry in this province.
M. Farnworth: The bottom line is that this government didn't tell the truth to the people of British Columbia before the last election. The bottom line is that the people of British Columbia don't trust this government. They're doing their own research on the impact of the HST, and they're finding out it hurts them.
The Canadian-Independent Group of Funeral Homes have done their own research and found that the cold, calculating grasp of this HST agenda of this government reaches into funeral services of families facing a terrible time in their grief. They're making it more expensive.
My question to the minister is this. Why does he ignore the research done by the people who actually have to deliver the services, and why is he making funerals more expensive for British Columbians at their moment of grief in this province?
Hon. C. Hansen: I think, as we have been very upfront with British Columbians, there are some things that are going to cost a little bit more.
Mr. Speaker: Minister.
Hon. C. Hansen: The vast majority of goods and services in British Columbia either will not be affected at all or, in fact, will be less than they otherwise would be in an HST world. But we've been quite upfront that there are some things, some goods and services, that might cost a little bit more.
That's exactly why we have put in two very important measures for the benefit of British Columbia families. One is an HST tax credit. It will be a cheque in the mail for 1.1 million British Columbians to help them offset those things that might cost a little more. The other thing that we put in place is a reduction in personal income tax, increasing the basic personal exemption from $9,376 to $11,000 a year. Those are specifically designed to help offset the cost to families for those few things that might wind up being more after the consumption tax is applied.
Mr. Speaker: The member has a supplemental.
M. Farnworth: The only thing that this government has been upfront about is the fact that they've never been upfront with the public of British Columbia about the impact of the HST. The Canadian-Independent Group of Funeral Homes….
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Mr. Speaker: Just take your seat for a second.
M. Farnworth: Hon. Speaker, you know, they can laugh, and they can make all the jokes they want. But the bottom line is that the HST has an impact on real families right across this province. At a moment of a family's greatest grief, when they have to deal with the burial or cremation of a loved one, this government is making it more expensive, and they try and deny it. Yet the research done by funeral homes shows it's going to be more expensive.
So why is this government, at a time of a family's grief, making it more expensive and piling more pressure on families fighting to make ends meet?
Hon. C. Hansen: I can tell the member what families across British Columbia want. What they want is meaningful jobs, and that's exactly what the HST will deliver. In every corner of British Columbia we know that the HST will have a positive effect on job creation. That ensures that B.C. families are supported. That's our goal. That's what we're going to deliver on.
FUNDING FOR PUBLIC HEALTH PROGRAMS
A. Dix: Last week the Minister of Health confirmed that he had ordered $45 million in cuts to population and public health programs that are directed by the chief medical officers of health in the health authorities. As ordered, the health authorities are submitting cuts to the minister for approval.
Can the minister confirm that the list is composed of cuts to disease prevention, health screening and inspection programs, and will the minister think twice and not slash the very programs that keep British Columbians healthy?
Hon. K. Falcon: You know, Mr. Speaker, once again I find myself rising in the House to have to say to the Health critic that once again he is completely, totally wrong. I feel bad having to do this over and over, so let me just say it right here on the record in front of every member of this House. There will not be one nickel cut from public health in any health authority. But I'll tell you what we will do.
We are asking the health authorities to identify 10 percent of that budget to refocus those dollars into an effective public health program that will deliver results on issues from childhood obesity to health promotion to disease prevention. That's exactly what we want to deliver: results for British Columbians.
They would never understand that because the only thing the NDP understands is that you have to keep doing things the same way and expect different results. That's the NDP world. It's not our world.
Mr. Speaker: The member has a supplemental.
A. Dix: Let's review some of the programs that the minister is proposing to refocus out of existence. The Interior Health Authority is proposing cuts to the inspection of family day cares in Kelowna and Kamloops and across the IHA. Now, hon. Speaker, even extreme right-wing bloggers think government has a role in regulating and protecting children.
Vancouver Coastal Health is proposing the elimination of its healthy living program, directed by its chief medical officer of health, including highly regarded diabetes education programs directed at diverse communities.
Will the minister simply rescind his ridiculous orders to cut these programs?
Hon. K. Falcon: Well, you can't think of an issue that just typifies the NDP more than that question. Because in the NDP world, nothing must ever change. No programs should ever be looked at. Nothing should ever change. Keep just throwing money into the system. Don't ask for any different…. Don't measure results.
Let me say this. On this side of the House we are not judging our system based on what we're throwing in; we're judging our system based on what we're getting out. I can tell you that the public of British Columbia wants to know that we are getting results, and results, by the way, Mr. Critic, aren't how many different programs you have delivering the same thing. Results are how many people are more active and how we're improving the health population. That's what we're doing on this side of the House.
AUDIT OF B.C. FERRIES
DATA SECURITY SYSTEM
G. Coons: An internal audit completed last year by B.C. Ferries shows there are serious security gaps at the corporation for people who pay fares with credit cards — 45 deficiencies that need to be fixed immediately. Otherwise, B.C. Ferries could face millions of dollars in fines or penalties, and people could become victims of fraud or identity theft.
What's particularly disturbing is that B.C. Ferries and this government didn't let anybody know about this serious security issue. It wasn't until last week that the public first heard about it after the Globe and Mail managed to obtain the internal audit. The audit was completed last year, and the CEO of B.C. Ferries says he won't get around to fixing the gaps until next winter — seven months from now.
It's unacceptable that British Columbians and travellers were kept in the dark about this serious issue, and it's unacceptable to wait so long before addressing the issue.
[ Page 4277 ]
To the Minister of Transportation: what's she going to do to fix these security gaps immediately, before there's a serious breach of information and before people become victims of fraud?
Hon. S. Bond: This member is on the record as constantly having taken every opportunity to try to discredit a company which has worked very hard. In our recent comptroller general's report, generally, B.C. Ferries operates very well. In fact, it was a result of an internal audit. In fact, the work is being done. Measures are being put in place.
Let's be clear to the member opposite. No compromise has taken place, and the system will be corrected, Mr. Speaker.
[End of question period.]
Hon. M. de Jong: In Committee A, I call Committee of Supply — for the information of members, the ongoing estimates of the Ministry of Housing — and, in this chamber, the continued second reading debate on Bill 9.
Mr. Speaker: Minister of Health.
Hon. K. Falcon: In accordance with the Budget Transparency and Accountability Act, I'm submitting before the House a major capital project plan for the Interior heart and surgical centre in Kelowna.
Orders of the Day
Second Reading of Bills
Bill 9 — Consumption Tax Rebate
and Transition Act
S. Cadieux: I am pleased to continue on this afternoon with my comments in support of Bill 9. I've already talked a lot about the things that won't change and corrected some of the inconsistencies and misinformation that's been perpetuating. Yes, it's true that some services, like haircuts and luxuries and restaurant meals and golf fees, will see a slight increase under the HST, but first, let's remember a few things.
[L. Reid in the chair.]
First, to spend money, you have to have money. I'm really talking about jobs and after-tax income. The HST will create 113,000 jobs in this province. The HST, combined with the more than 120 tax cuts we've made since 2001, means B.C. residents will continue to pay amongst the lowest taxes in Canada after July 1.
For most taxpayers, their personal income tax has been reduced by more than 37 percent since 2001, and today there are more than 325,000 low-income residents that pay no provincial income tax at all — zero. Those are changes that we made, Madam Speaker, and those are changes that the NDP voted against.
In fact, if you'd like a dollars-and-cents example to put it all in perspective maybe, a middle-income earner, let's say, who earns about $40,000 a year, which is similar to many of our very deserving teachers, in 2001 would have paid over $3,000 in taxes — $3,041, in fact. Today they pay $1,450. That's a 52 percent savings. That's more than $1,500 more in their pockets every year.
Everyone earning up to $118,000 a year pays the lowest provincial income taxes in Canada. That's a good reminder for those who may have forgotten that fact. In fact, we haven't seen much, if any, mention of that during the discussions in the media about the impacts of the HST.
In speaking with people about the HST, there has been a lot of misunderstanding and a lot of things I've corrected. For example, some folks believe that it's a new tax or a tax in addition to the PST and GST we pay today, or thought that it would affect grocery prices or home heating — both of which are untrue.
Many of the same people who misunderstand the merging of the GST and PST into the HST and the fiscal impact on their household budgets are surprised to hear that their income taxes have been reduced and the total positive impact of the changes that are there, in fact, in their budgets.
Yesterday one of the members opposite made an inference that low-income earners in this province are continually hurt most by the policies of this government, and that's just not true. Of course, no one would deny that life is more challenging when one is low income. Because of that, the B.C. Liberals have made changes that provide the best impacts to those with low incomes.
In fact, for total provincial taxes and fees paid in 2001 versus 2010, we've seen decreases in almost all income brackets. For a family of four, for example, that is earning about $30,000 a year, the total decrease in taxes paid over that time is 47 percent. That's a lot of money. A family of four earning a much larger income of $90,000 has only seen a decrease of 11 percent. So I'm really not sure where they're getting their numbers from, but they certainly aren't the numbers that are in the budget.
I'm also not sure that they are taking into account or even considering how many things this government has done to further assist low-income individuals. We've got a new HST credit coming. We've got the climate action tax credit. We've got Fair PharmaCare and reduced — and even eliminated in many cases — MSP premiums.
[ Page 4278 ]
Again, we're talking, really, about income. With this bill, what we're talking about is: how do we make sure that people can earn an income in this province?
Right now more than 50 percent of British Columbians earn their income working for a small business. Small business owners know that. Chances are they employ somebody each one of us knows and each one of our constituents knows. Small businesses are 98 percent of the businesses in British Columbia. Since 2001 small businesses have created 172,000 net new jobs. They account for 34 percent of our GDP. They're the backbone of the economy. Small businesses will see their effective tax rate on new investment decline by almost 3⁄5 by 2018.
All of the things we're doing are going to help small business in B.C. continue to grow and remain competitive. John Winter from the B.C. Chamber of Commerce has said: "With the commitment to harmonization and the other measures announced regarding personal, corporate and small business tax, the provincial government must be congratulated for creating the most competitive tax regime in North America."
I know this is very complex and dry, but what does the change from PST to HST mean for small business on a day-to-day basis? Currently businesses pay PST on their inputs that go into producing their final product or service.
For example, a restaurant, which we've heard a lot about during this debate, will no longer pay PST on a long list of products essential to their business and considered business inputs: fridges, stoves, freezers, energy, cleaning supplies, cash registers, paper towels, menus, napkins, placemats, pots, pans, blenders, coffee machines, mixers, advertising materials — all of these things businesses like restaurants use in creating their product and selling that.
Today they pay PST on all of it — 7 percent on all of those things, which they then pass on to the consumer. With the repeal of the PST, they save that 7 percent on all of their purchases. These savings reduce their costs, attract investment, create jobs and result in lower prices.
Administration is also going to be easier. Collecting, accounting and remitting PST is costly and complicated. The proposed HST eliminates all of the current duplication. One of the things that small business owners have been telling this government for years is that we needed to simplify the reporting process, and the HST does that.
Streamlining administration and saving business money may seem insignificant at first to some, at least those on the other side of this House, but B.C.'s businesses are expected to save $150 million annually in compliance costs. And we can't forget the savings to our province's coffers of $30 million a year, also in administration savings.
New efficiencies and savings combined with our government's small business tax reductions, with the rate dropping to zero by 2010, will make the small business tax rate the lowest in Canada. That means the lowest, meaning attractive, in case anyone isn't clear on that.
In B.C. more businesses are also going to qualify for that zero percent rate because the small business corporate threshold is now $500,000, the highest in Canada. That'll save small businesses $20 million a year in taxes, money that can be used then to support and expand their business, hire more people, pay higher wages or build new locations.
This is all good news, and they're all things the HST supports. The HST is all about the economy, and all the leading economists agree that it's the single most important thing we can do for the economy in B.C. SFU economist and public finance scholar Jonathan Kesselman said it best: "In addition to gains and economic efficiency and investment growth, harmonization reduces complexity for consumers, compliance costs for business and tax collection costs for governments." Hmm, gee — better for everybody.
Economics may be dry, and people may have a hard time listening to it and may not want to take the time to understand it. People want to know how it affects them. Well, I've got one word: jobs. Or maybe three words: well-paid jobs. I'd like to read an excerpt from an editorial in the Vancouver Sun last September. Many people may have missed it. It's a little lengthy, but it's poignant, so I'd like you to bear with me on it. It reads:
"The bottom line is the HST is good public policy.
"Many analysts agree that future economic momentum will come increasingly from productivity gains rather than employment growth. The B.C. government claims the HST is equivalent to a 40 percent tax cut on business investment, which should propel productivity improvement going forward.
"Baldly stated, more competitive businesses create high-paying jobs and generate tax revenues needed for essential services like health care and education.
"Personal income tax is the single largest source of provincial government revenue. Individual taxpayers contributed $6.2 billion in the last budget, representing about one-third of total taxation revenue, giving Victoria the financial wherewithal to spend $15 billion on health, $10 billion on education.
"Statistics Canada says that the top 10 percent of income earners pay 52 percent of all taxes. Half the population of B.C. pays no income tax at all. It's obvious from these facts that taxes paid by high-income individuals are crucial to the standard of living in British Columbia."
A little further on in that article, it said:
"It should also be clear, even though it has been missing from the debate, that the harmonized sales tax is intended to ensure that B.C. is able to maintain and create employment that pays people well. The average annual wage in B.C.'s mining industry is $112,000, an income that attracts the highest marginal provincial tax rate and second-highest federal rate.
"Highly paid work is equally found in forestry, manufacturing and oil and gas. It's no accident that these industries are singled out to benefit from the introduction of the HST."
"The best thing the government can do to induce that outcome is to tax consumption rather than production and investment, and that's what the HST does."
[ Page 4279 ]
Effective, competitive taxation drives investment, which drives job creation, which drives economic prosperity for workers and for the province as a whole. That sounds like good policy to me.
You know, there are some intangible benefits. What I mean by that is…. Well, one industry that'll benefit is the emerging green energy industry. We'll see a stronger industry because of the HST and, more importantly, a better place to live. I know that's hard to imagine here in B.C., but I can't imagine what life would be like for our kids and grandkids if we didn't act now to capitalize on this emerging and enormous opportunity.
I can imagine how disappointed in us those kids would be if we didn't create a climate for economic prosperity, for growth and stability, and if we didn't invest in creating a hotbed of innovation and technological expertise through our universities and technology clusters, and worse, if we chose not to diversify and cushion those ebbs and flows of world markets in a new global economy.
With the HST we are recognizing that the world continues to change and that we must change with it. We must accept change. Although often it is uncomfortable, it is essential, and that change is sometimes how we as policymakers drive a strong economy.
The NDP have been wrong on every economic policy, opposing every measure that has made British Columbia the envy of Canada and North America as we make our way through this global recession. The NDP have opposed and voted against more than 120 tax cuts. Our government is eliminating the small business corporation income tax. The NDP voted against that. We introduced the carbon tax, making B.C. a leader in the fight against climate change. The NDP voted against that.
They were wrong about these tax initiatives, and they continue to be wrong about the HST. The NDP have opposed and voted against every income tax reduction that has helped keep B.C. families strong and let them keep more of their money so they can decide what they want to spend it on.
Now the NDP are against repealing the PST, it would appear — a move that will make B.C. more competitive and create jobs. More jobs in B.C., supporting businesses in B.C. — that's certainly not something anybody on this side of the House is going to apologize for.
The world wants to do business with us, and the HST makes doing business with us more enticing. That is how we will keep B.C. strong. That is what we were elected to do. That is how we will keep B.C. families strong, and that is how we will keep B.C. the best place on earth.
M. Sather: It is my distinct pleasure to rise to address Bill 9, the so-called Consumption Tax Rebate and Transition Act. You know, it's hard to understand why the government wouldn't come out and say in the title of this bill, this act, that it's about the HST, because they continue to tell us all day long how wonderful the HST is.
Now is the time for applause, gentlemen, ladies. No applause. Well, maybe they're having second thoughts. Maybe they are. It's never too late to have second thoughts about a very, very bad move.
You can go through this bill, and you will not see any reference to the HST. In fact, that's what this is all about. This discussion from the government side regarding the HST has become quite bizarre. We just heard it again from the member for Surrey-Panorama, and we previously heard it from the Finance Minister, who said: "I can't wait to see the NDP stand up and vote against the repeal of the PST."
Duh. Isn't that a little bit weird to them? I mean, this….
M. Sather: It's voluntary. It may be voluntary.
It makes no sense, because everybody knows that repealing the PST is about bringing in the HST, just like everybody knew and knows about the financing of health care — comes from general revenues. So what does this government try to do? They try to spin something about how all this money from the HST will go to health care. Flimflam, Madam Speaker. That's what we're seeing from this government around this bill — nothing but flimflam.
Since they don't really want to name the bill for what it appears to be, I thought I would make a couple of suggestions to help them out. For example, they might have called this act the "We're pretty sure British Columbians are going to love this tax" act. Well, that's what they seem to believe, so why not go for it? Why not put it right out there? I mean, they tell us constantly how this act will be good for British Columbians.
They tell us that, and yet I don't know. Maybe they don't get out and talk to British Columbians, because that's not what British Columbians are telling us. I can't imagine that's what British Columbians, the vast majority of them, are telling them.
I mean, the member for Maple Ridge–Mission was at an anti-HST rally the other day. I'm sure he heard from the hundreds and hundreds of people who were there that they're not impressed one little bit with the HST, and these are not all New Democrats by any stretch of the imagination. This government must know that, and these members opposite must know that, and yet they continue with this facade.
How about this one — the "This tax wasn't on my radar, but I was converted on the post-election road" act? It's never too late, and there have been conversions on the road before. You know, it could happen this time.
[ Page 4280 ]
The members opposite might want to suggest to the Finance Minister, if he ever comes to his senses — which I doubt, from what I've seen so far…. They might want to suggest to him some way that they can resurrect this bill — some way that they can resurrect, I should say, their careers, as a matter of fact, and their reputations, because their reputations have been badly, badly sullied by this classless and bad act.
I don't mean just this bill as a bad act. I mean the bad act that this government has been engaged in since the election last spring. It's been horrific. So one last shot for them at redemption.
How about the "Lord, we ask your forgiveness for bringing in this tax" act? You know, it's never too late to ask for forgiveness. It's never too late to repent. This is the chance. It's not too late. It's not the end of April yet. You still have an opportunity. It's for your own good. Trust us. It's for your own good, and it certainly would be for the good of British Columbians.
I can imagine that the discussions behind closed doors with the government caucus, if they're allowed to have those discussions, must be contentious. They must be contentious. The government members are putting on a game face, if you will, in question period and at times during this debate. But they know. They know that they're completely up against it with this act and that people in British Columbia are not going to swallow it.
I want to address some things that were said earlier today, particularly by the Finance Minister, when members on this side of the House brought up the fact that condo owners are going to be paying more as a result of the HST. Some incredible response, I thought. I thought it was a remarkable response from the Finance Minister to say, in effect, that government members were lying. He had to correct that, of course. It's unparliamentary language. But I'm scratching my head and wondering where on earth the Finance Minister is at.
I wouldn't have thought that a minister of his experience could not know his file. But I've seen his act before, and I'm not surprised. When it came to the TILMA agreement, after months and months of debate and discussion about the bill, the Finance Minister did not know that the agricultural land reserve is not exempt from TILMA. He didn't know it. In fact, when I said it, he got up and said: "That's wrong." He was wrong, and he's wrong again. But he has the opportunity, and surely he's going to clarify it at some time.
Condo owners and their association are saying: "Look, the fees themselves don't go up." We're all agreed on that, but the things that the fees pay for do go up — things like landscaping, janitorial services, maintenance and renovations. Those are the things that condo owners pay for, and they're going to be paying more for this.
The minister says no. He says that it's not the case. He needs to clarify that, then. Is it not true that they are going to be paying more for those services? It is true, and yet to hear the Finance Minister earlier today…. It was appalling.
You know, I think it must leave the government members privately with a sense of absolute hopelessness, because there's no defence of this bill.
There's no cogent defence of this bill that is being made by the government members, particularly the Finance Minister. So it's a bad time to be a Liberal. They're heaping one catastrophe on the other. If it's not the Solicitor General stepping down, if it's not the brewing scandal over the casino, it's the fiasco of the HST — the absolute fiasco.
I want to talk a little bit about the HST in other provinces because that's been mentioned a few times. There are some differences between this one and those in those provinces. For example, Nova Scotia and Newfoundland — they had reduced their HST, the combined tax, in the process of bringing in the HST. More importantly than that, I think, is that the Maritimes consulted with industry and other business before bringing in the HST, and this government did not.
This government did not. And why did they not? They didn't because they knew right from the get-go. I think they knew. They must have done some polling. I don't know. They must have known.
M. Sather: No, they didn't know? Lambs to the slaughter, I guess. I would have thought that they would have known, Member, but perhaps I'm mistaken on their acuity around these matters.
The fact of the matter is that it's a totally unpopular tax, and they're suffering as a result. They didn't bother to discuss with anyone, not before the election, and then they dropped the bombshell on British Columbians.
You know, even if British Columbians accepted the tax, which they by and large do not, they would not accept something that is dropped on them like that, and the government knew it.
Why did they do it? Various theories are out there. They wanted some of that slush fund money from Ottawa, which incidentally they've kind of messed up for British Columbians too because they're not taking it now. They're reducing the amount of that transfer money that they could get. But when you put off taking the money, it's not a freebie because then you've got to pick up the slack. We know we've got another large deficit this year brought forward by this government.
Financing a deficit costs money. There's a lot of interest that's going to be paid; $70-some million is the estimate that I've seen. As I say, it's a tough time right now. It's a tough time. I'm not so concerned about the tough time for the government, quite frankly. I'm concerned about the tough time for British Columbians and
[ Page 4281 ]
how this is quite frankly a very, very bad time to institute a new tax.
We're trying to rise out of a recession, and now consumers are going to be hit with another tax that's going to make them less likely to go out and spend their money. So it's not good for British Columbia in many, many ways.
The Finance Minister says the HST will improve investment in the province, and the government in that respect is putting all their trust on the marginal tax rate on capital and that the HST will lower that measure.
Now, it's not clear if that will in fact be the case. It's arguable, I think, perhaps either way, but the Finance Minister has trotted out quite a few…. Well, not many studies, actually. There's the Jack Mintz one. Anyway, he's trotted out quite a few organizations that are supportive.
But a number of economists don't agree on this factor — that the marginal effective tax rate on capital is a very good dependable measure. Some of those are Queen's University's David Chadwick Smith Chair in Economics, Prof. Robin Boadway, I believe it is — and an individual who, although I'm sure the members opposite are not fond of him, does his homework. That's Marc Lee from the Canadian Centre for Policy Alternatives.
Now, supposing on that particular issue, in terms of investment being improved by the HST…. What would happen if that were the case? Well, if we look at the forest industry, for example, we see that a lot of their investment has been going south of the border. So is there any assurance that investment, if it were to improve…? I don't think there's a heck of a lot of great evidence that it will as a result of this tax, should it be passed. Mercifully, let's hope it is not. We're going to be doing everything we can, certainly, to do our best to see that it isn't.
Ultimately, it always depends on the government as to whether or not…. They will have to make the decision whether to continue with this very unpopular tax.
If you look at some of the forest companies out there…. TimberWest says they're officially realtors now. So what is the confidence that we can have that…? The government, of course, is greasing the skids there monumentally to turn forest companies into realtors in various parts of the province.
We don't have a lot of confidence that the supposed benefits that the Finance Minister says will happen will in fact happen. He also says that the HST will increase B.C.'s tax competitiveness. However, Manitoba, which looked at and rejected an HST for their province, said that an HST would only increase the tax competitiveness of their manufacturing sector by all of 1⁄10 of 1 percent. So hardly worth their while was what Manitoba decided. But government has great faith, I guess, in its vaunted capabilities, which seem to me to be markedly diminished as a result of this ill-considered and ham-fisted attempt to bring in an unpopular tax.
Also, the minister says that the HST is going to help exports. You'll remember that in his speech in second reading he talked about sending all those 2-by-4s over to China. More properly, he should probably have been saying "those raw logs over to China," because that's….
Hon. C. Hansen: That's not true.
M. Sather: That's what in fact is not true.
Hon. C. Hansen: Very few raw logs.
M. Sather: Here he goes again. "Very few raw logs go over."
There's been an unprecedented export of raw logs from this province over the past few years. And they believe that. Better believe it. They know what the truth is. There again, the Finance Minister never fails to make these incredible and unbelievable statements. There you go.
Deputy Speaker: Members. There is a member who has the floor.
M. Sather: A report for the International Monetary Fund by writers Alan A. Tait and Krugman and Feldstein said:
"Many VATs" — value-added taxes, and the HST is one of those — "exempt and zero-rate important sectors of the economy, especially food, housing and many personal services."
There are some exemptions for food and housing under this bill.
"Therefore, this type of VAT raises the price of tradeables relative to non-tradeables and encourages the substitution of food, housing and services for tradeable goods. This implies that both imports and exports would be reduced. 'The most likely effect of the introduction of a VAT would thus be a decline in exports.'"
The same author writes in the publication for the International Monetary Fund:
"Overall, the VAT is not thought to have contributed significantly to improved export performance in the European Community. The VAT makes the customs union possible but is not the agent that creates international trade."
So you see, Madam Speaker, it's by no means a uniform belief that trade in…. Certainly, the Finance Minister wants us to focus on 2-by-4s rather than those raw logs, but whatever it may be, exports thereof.
The sad part about the HST, despite what the government says — which can only make me believe they don't get out much — is that people on the ground and the small businesses are upset about this tax. You go into any restaurant, almost, and they will tell you that they're very, very upset about the effect that this tax will have on them.
[ Page 4282 ]
The government talks about input tax credits all the time. Wow, businesses get input tax credits. But the biggest drivers, the biggest cost factors for restaurants are labour and food, and they don't get any input tax credits on those. They are going to hurt and hurt big, and they know that. I don't think the government even knows that. I just don't think they're getting out at all. They should get out, because I think if they had gotten out and taken the time to talk to some of those individuals in the first place, this never would have happened.
Hairdressers. Government likes to talk, reel off the business organizations that support the HST. However, a lot of the businesses are not supportive. Go in and talk to hairdressers. They're appalled. They're furious. They're ready, willing and able to sign the initiative petition that's going around to try to prevent this ill-considered tax from happening.
It's tax time right now, and a lot of folks, myself and my wife included, have their taxes done by accountants. It's interesting that the government lists several, or two or three, accounting organizations that purportedly support the HST, but when I talk to my accountant about it, he's freaked out. He's concerned that he is going to have to charge the HST if this government passes this bill, and he'll have to do that next year. He's wondering and asking me: "What can I do about it?"
It's the people on the ground that this government needs to talk to, not just the people in the corporate boardrooms. Quite frankly, from a purely political point of view, they need to remember that the people who do most of the voting are the average British Columbians. The people in those restaurants, the people in those hairdressing shops — the people that are small, that don't have the access to power — have great concerns about how they're going to be affected by this bill.
I mentioned the initiative petition that Bill Vander Zalm is driving. Bill is driving the bus that's going around to most towns in British Columbia. What is the government going to do if that initiative were to pass? Initially everybody, I think most people in British Columbia, thought: "Nah, it doesn't have a chance." Now a lot of people are saying that it may very well have a chance.
If in fact that initiative is successful, what is this government's response going to be? Are they going to bring in a bill that allows for a referendum? Well, they should, but I think they know very, very well where that would go — a resounding defeat. Or are they going to bring in legislation that would effectively end this HST debacle? Some people have suggested that they could bring it in but then not call it for debate. I dare the government to do that. I dare them to bring in a bill to this House and then let it die on the order paper.
I wonder, really, what this government is going to do. I'm sure they're shaking in their boots, hoping at least one constituency somewhere in this province is not going to sign up the required number of people so that that initiative will pass.
You know, Madam Speaker, a lot about politics is about branding, and this government's brand is suffering big-time. It's coming, I think, to a tipping point for this government. You can only endure so much damage to your brand before it becomes unredeemable, before you're stuck with what you've got.
I don't think the Liberal Party of British Columbia wants to go there. I don't think they want to ruin themselves for the future. Then why not take the hit now, that you made a big mistake, and cancel this bad experiment right now?
Why not say to British Columbians: "You know, we are fallible human beings. I know we didn't tell you what we were going to do, but we're saying now that we hear what you say. We've talked to you, we've listened to you, we know that you are not happy with this tax, and we are going to cancel it, get rid of it right now"?
That's what this government should do. That would be, in my opinion, in their best interest to do that, because this is not going to go away. I guess that's what the government is hoping. They're hoping, of course — hoping against hope, praying — that the initiative campaign will not succeed. Even if it does, I guess, they're hoping that somehow the huge anger that British Columbians have towards this government as a result of this deception that brought in this tax and as a result of the tax itself….
Notwithstanding what the Finance Minister says, they know that this tax is not good for them, and they're going to punish this government. They're going to punish this government unless they come to their senses. But that's up to them, Madam Speaker, and I can only hope for the people of British Columbia that they will come to their senses.
Look at tourism. They're going to be suffering. Tourism services are going to go up another 7 percent. These folks are really worried. I mean, they depend largely, to a considerable degree, on tourists coming over from the U.S. to Canada — to British Columbia specifically. The Canadian dollar is right around parity with the American dollar at this point. That is not good for tourism. To have this on top of it, it's going to be a very hard blow. It's going to be a tough time for tourism as a result of this.
The government just goes on talking about all the benefits to business. Where are they when they're looking at the tourism industry? Where are they when they're looking at the restaurant industry? Where are they when it comes to all the little people?
I talked to somebody the other day, and he's a winemaker. They're uncertain about how or if this is going to affect them. It shows that there's not enough information out there. The juice that they pay for to make their wine…. The member opposite is a vintner. Although it's
[ Page 4283 ]
not his business particularly, he knows all about wines. They're worried about whether or not it was considered an agricultural product. They understand, some of them at least, that it no longer will be and that it's going to be subject to a tax.
I talked to another person. I went into a floral shop, and she started talking about a friend of hers who is a wedding planner. My wife and I used a wedding planner. It was great — an absolutely wonderful service. They're going to be subject.
These are little people. They're going to be hurt, and I guess this government doesn't talk to those folks, because they would know that those kinds of people are going to be hurt.
I talked to another individual who has a courier service. She picks up pets in Vancouver from the airport and takes them to their owners — stuff like that. She's going to be hit by this. They're trying to get their businesses going, they're trying to make a living, and they can't afford this kind of hit.
It's totally ironic for a government that brags all the time about the tax reductions that they've made for businesses, by and large, and yet they're so ready to adopt the tax, to embrace a tax that puts the burden on the average British Columbian, and that's not right. It's simply not right at all.
So we see this for what it is. It's a tax shift. It's a tax shift from business to the average British Columbian, and they're concerned about that. The government needs to get a lot more concerned about it. Their level of concern, certainly as indicated by the remarks of the Finance Minister, is…. The disparaging remarks by the Finance Minister are worrying, quite frankly, because I think it shows a complete disconnect with the reality that's out there, and this government is proceeding at their own peril.
I don't think I've got too much time left, so I just want to add a few more words.
You know, you can't even go green now. Remember how proud the government was at going green? Now your tax rebate on your hybrid that you could get before to help you go green is gone with the repeal of the PST. The ability is lost. The flexibility is gone.
This is one of the things that — remember? — Rick Thorpe and Carole Taylor, when they were part of this government, said was so bad, because you lose capacity to adjust and to have ownership over your own taxes in British Columbia. They said it was bad. Now it's curious. They're not in government anymore.
Hon. I. Chong: I, too, rise this afternoon to take my place in the debate of Bill 9. I know others who have spoken before me have certainly offered their opinion and have read into the record a number of quotes. I will give everyone fair warning that I will likely be offering some of those quotes as well, albeit from a different perspective.
I do want to begin by saying, however, that when Bill 9 was introduced by the Minister of Finance, he said the primary objective of this goal was to repeal the provincial sales tax. We're getting rid of a tax, and to hear members opposite not support getting rid of a tax just goes to show that, once again, they're not about tax reduction. I know, because I have been here for close to 15 years, that each and every time this side of the House, our Minister of Finance, has ever introduced a tax reduction or a tax measure that actually made an impact on people's lives, each and every time it was rejected by those NDP members opposite.
When we wanted to start eliminating taxes and introduce one of the single largest personal income tax reductions in the history of British Columbia, when we were first elected in 2001…. In June of 2001 we introduced the largest personal income tax reduction ever: a 25 percent income tax reduction. What was the NDP position? Well, they didn't like it. Why did they not want individuals and families to have more disposable income, more discretionary spending available to them? Because they do not, have not and will not ever understand what tax policy is about. That has been shown time and time again.
We just have to take a look at the history — the ten years that the NDP had to make significant changes to tax policy. Every time they were given an opportunity to do that, they couldn't do it because they could not understand it, because they were pulled each and every way by some of the people telling them: "Well, it may not work this way. It may not work that way."
You know what? It takes bold leadership to make a tax policy change, and that's exactly what is happening with Bill 9. That is exactly what we're going to do to ensure that British Columbia continues to be a leader in economic growth here in Canada and recognized around the world.
That's something foreign to the NDP. I know that because I've seen that. When we wanted to make other changes to our tax policy, they rejected them because there was always something negative about it.
Well, I can tell you that like all tax changes that take place, there will not be an identical effect on individuals or on businesses or on industries. No tax can possibly make the exact, identical impact on everyone. So that's why you look at those changes, and that's why you also bring in other incentives and other mitigating measures.
We've heard members opposite talk about the impacts that a harmonized sales tax will have on low-income individuals and low-income families and fixed-income families. So what is it that we did to address that problem? We brought in tax credits: $230 a year for individuals earning up to, I believe, $20,000, which is a
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low-income measure. We all accept that. That will more than mitigate any incremental cost that an HST may bring to those individuals.
Are they going to accept it or reject it? Well, I think they actually did reject that, because in our budget…. They rejected the budget. So they also, once again, rejected a mitigating measure that the harmonized sales tax would bring.
Members on this side of the House have said this on a number of occasions, and I know the NDP refuse to listen or make a choice not to listen, and that's fine. There are leading economists — and they'll quote economists that they know as well — well-published economists, who are respected around the world, who are reviewing this change and measure and saying: "You know what? Actually, we're going to take a look at exactly what is going on in British Columbia, and we're prepared to publish a report."
Dr. Jack Mintz. I'll start with quotes from Dr. Jack Mintz from the University of Calgary, the School of Public Policy, who specifically wanted to take a look at British Columbia's — not Ontario's, not Newfoundland's, but specifically British Columbia's — harmonized sales tax. In essence, he says this: "British Columbia's harmonization of its sales tax with the federal goods and services tax, GST, will result in a giant leap in the province's competitiveness, both domestically and internationally."
What members opposite, the NDP, fail to acknowledge is that we are a small trading jurisdiction in a small trading country. One way that we can ensure that we grow our economy and that we have jobs for people is that we do have to trade with other jurisdictions.
The fact that this measure is going to have a giant leap in our competitiveness to allow us to do well internationally in itself should provide some comfort to the NDP members. If they care about jobs, which I think they do; if they care about investment, which I hope they do; and if they care about British Columbia coming out of this global economic recession faster than any other province, which we should all be proud to do, then, they should support the harmonized sales tax. They should support Bill 9. But it is quite the contrary.
M. Sather: Quite the contrary.
Hon. I. Chong: Absolutely. The member for Maple Ridge–Pitt Meadows said that it's quite the contrary, because he doesn't support new jobs. He doesn't support investment. Obviously, you don't support the economic growth that we're going to be seeing. It is a shame. That is where the contrary lies, which has become very evident.
You know, Dr. Mintz goes on to further analyze…. His report isn't very long, and I'm sure some of the members opposite, and even their research department has perhaps committed it to review. They may wish to disagree, perhaps, on the surface of what they see.
But I am comforted knowing that this renowned economist, who has been publishing papers, will have done the incredible amount of work necessary to put this to paper, to suggest and to come up with figures such as the harmonization that will account for an increase of $11.5 billion in capital investment and a net increase of 113,000 jobs by the end of the coming decade.
Now, those are pretty incredible numbers. Those are pretty staggering numbers — $11.5 billion, not million, but billion dollars of capital investment. Why would anyone want to invest in a jurisdiction if they did not feel that that investment would be secure and that it could be recovered?
If you are looking to find a jurisdiction to do business in, create jobs, to help grow a particular sector, you want to come to one that is going to allow you to see those future prospects as well as create jobs as well as have your investment protected. I can't imagine why anyone or any business would be prepared to see $11.5 billion of investment at risk. Another good reason for the harmonized sales tax.
He goes on to talk about a more complicated area, and I'm not going to get into details because I know it will take some time to explain it. While I may have had the benefit of training and the use of seminars in my background as a professional accountant, I know some members opposite haven't. I won't get into detail, but suffice it to say they should understand that there is something called the marginal effective tax rate.
The marginal effective tax rate really does speak to why people make certain decisions — where they choose to live, where they choose to invest. The report that Dr. Mintz published talks about and highlights that. It is very, very important that we understand how that, in effect, will provide an opportunity for people to do well in this province.
We are living in a changing world. We said so last year, or about a year and a half ago, when the global economic recession took hold of British Columbia. Like every other jurisdiction, we were not in any way shielded from its wide-ranging impacts. We were affected like every other jurisdiction around the world and like every other jurisdiction in Canada. All the provinces and territories were going through the exact same difficulties and challenges, yet through all of that people were pointing to British Columbia and saying: "What is it that they're doing that will get it right?"
Well, first of all, we know that the Olympics was one of the factors that they said that British Columbia was going to come out of this global economic recession faster. Everyone said that's the great big economic shot in the arm they all wish they had. And for quite a while the NDP rejected that, disparaged the Olympics at
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every opportunity until, after it was over, they each rose in their places and talked about how wonderful it was in the unification of the Canadian spirit and pride — which none of us disagree with, but they did take their opportunity to disparage it.
So here we have, again, a contrast of sides, a contrast of opinions. With that, the Olympics being a shot in the arm for economic rebirth, I guess, if you could call it that, the harmonized sales tax has now been touted as this giant leap forward. Once again, the members opposite, the NDP, would again start to disparage it, bringing in a considerable amount of misinformation.
I find it astounding that they could carry on with that misinformation and the fearmongering that they have provided out there. When they talk about how people are concerned and upset, it's because they have given inaccurate information.
One of their own members — I think he's from Delta North — in his own brochure puts out that there's an additional 7 percent on top of the present PST. That is an absolutely false statement — completely. And yet it's published. I can't hold it up and show you the picture because I know that would be a prop. But Madam Speaker, that's an absolutely incorrect piece of information, I'm sure paid for with taxpayers' dollars, because it's a constituency brochure.
Obviously, incorrect information is being published out there. If people were to read this and to believe that this was an MLA constituency brochure, they would honestly think that this was something that they had to rely on.
Deputy Speaker: Minister.
Hon. I. Chong: I just want to say that that's just one example — one — of misinformation being touted out there.
I've heard member after member get up and talk about things, and they throw it casually in their speeches about: "Oh, this will be included, and that will be included." And we've said no. There are so many items that we currently pay for that have both the PST the GST, and harmonization means the addition of both. It also does mean that those current items that have GST on them will be subject to HST. And yes, I know that some of those items did not have PST on them, so there would be 7 percent on that.
That's one of the reasons why there were tax credits that were introduced to help mitigate that. That's also why a variety of areas that people fundamentally would like to see shielded from any increase would be exempted. That's why groceries will not have any additional tax, which some people think there would be. Children's-sized clothing will also be exempted — and a number of things, as members will know as they check the website.
It is disconcerting that we are living in a changing world and that, when given an opportunity to introduce such a significant change in tax policy, the NDP want to continue as they have in the past, have their heads buried in the sand and say: "Let's stay with the status quo." It's not because I think they don't…. Well, I think it is because they don't understand it, or they're choosing not to understand it, because if they were to really look into how the impacts of this will take shape and what it will ultimately do, they will have to support it.
Job creation is key to this, and I've mentioned it a couple times. I cannot stress the importance of that.
When people talk about what we were going through in the last number of months in our economic climate, when we saw one-industry towns buckle because that industry was no longer able to be competitive, and as much as 30 percent of the workforce in that town were suddenly out of a job, do you know what was affected then?
Well, it was the restaurants, it was the retail shops, it was the grocery stores and it was the gas station. You know what? It wasn't even taxed at that time. It was that someone didn't have a job. They didn't have a paycheque. They couldn't spend any money anywhere other than making sure they made their mortgage payment.
This Bill 9, this repeal of the PST that allows us to implement a harmonized sales tax, means jobs will either be retained or jobs will be created by those very businesses in those towns that I know members opposite who represent rural communities are highly dependent on. It's pretty incredible when a member represents a rural town and they've seen the devastation of a mill being shut down, of a mine not starting, and they're coming into this House and demanding from this minister or that minister that they do something.
We said: "Well, you know what? We just heard from ministers who have been talking to those sectors, who have said: 'Well, you know what you can do? You can bring in something to help us to stimulate our sector.'"
What does the forest industry say? They say $140 million — $140 million — of savings in that sector alone will allow them to not only reinvest in equipment but also allow them to re-equip their plants, to modernize their plants, to make them more competitive so that they can sell their products and therefore hire people, have some people back in those jobs.
If members opposite are saying no to that, then they're saying no to jobs in their own ridings. I would really ask them to go back and ask those forest-dependent towns that they represent and ask those employers whether they will be able to continue to be in those towns without
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that. I'll tell you, the forest employers will say: "No, we need this."
Mining was devastated under the NDP. I was here, and I watched, and I heard. Not a single mine opened up while the NDP were in office because every time that sector tried to move one step forward, the NDP kept pulling them back — every single time. But we have encouraged exploration. Exploration means people are at work. Exploration means people invest in equipment. Exploration means jobs — once again, more jobs.
The mining sector and the energy sector say that as much as $80 million can be saved. The NDP suggests that these are not dollars that will be passed on. That is ludicrous because when a sector is able to save money, do you know what they want to do? They want to keep that investment that they've already made whole. They want to continue to ensure that the investment they've already made in that town thrives. They need to protect that investment. They need to help it modernize, and they need to have people working there. And that's what the HST is going to do for them.
As I say, it's very, very disconcerting when the NDP do not understand those very basic principles of what it is to turn an economy around. That should not come as any surprise, because they weren't able to turn an economy around when they had ten years to do so. We all know that when they formed government, they inherited one of the best-performing economies in Canada and within ten years took it to the worst-performing economy in Canada. They took it from a have status to a have-not status. We saw credit downgrades, one after another.
I was here, hon. Speaker, as were you, and we saw each and every year when the credit-rating agencies came out with their report, and we all rushed to get that report. What did it say?
Deputy Speaker: Minister, please take your seat.
Members — North Coast, Maple Ridge–Pitt Meadows.
Minister, please continue.
Hon. I. Chong: Those credit-rating agencies — what did they say? They never gave you an upgrade, I can tell you that for sure. Never once did I see an upgrade with the NDP when they were in government.
[C. Trevena in the chair.]
But we were able to get a credit upgrade, not just once but several times. We have a triple-A credit rating. Some people might not think that means anything, but I can tell you that if you personally had a great credit rating and you had a mortgage or you had a business, you would want that. You would not want to give it up, because every percentage or quarter percentage drop that you would have in terms of rating would mean you would be paying more in interest costs, which would not allow you to be competitive.
It goes back to being competitive. Everything you need to do to create a competitive, productive climate means you look at your taxation policy. You take a look at your economic growth potential. You take a look at your job creation policy. That's what you do to protect British Columbians to make sure they have a good quality of life so that education and health care dollars are there. That's what you do to make British Columbia a leader. That's what we're known for.
We were not known as any leader of any kind back in the 1990s. I can assure you of that. We, in fact, were the laughingstock back in the '90s. Many times economists wrote in their journals, their magazines, how British Columbia was just not even on the radar screen for any investor.
That was in the '90s, and it was very, very disconcerting then, as well, because we all want to be proud. See how proud we were when we had the Olympics, how proud we were to be Canadians? Well, you know what? We wanted to be proud as British Columbians too. We wanted to say we were leaders in a whole host of areas, but there was nothing we could be proud of in British Columbia in the 1990s when the NDP were in office because all they did was drive people and jobs out of British Columbia.
I saw firsthand how that happened. I saw my friends, my young friends, have to leave this province to find work elsewhere because nobody cared to invest in British Columbia. At the end of the day if nobody cares to invest, there are no jobs. If there are no jobs, there's no spending in the community. If there's no spending in the community, there are no other small businesses where other jobs are.
You know, the members opposite talk about the small businesses. Well, that's great, because we all do support small businesses. The small businesses need to know that they've got customers. That's number one: customers. If you don't have customers, what will the tax do?
You'd better take a look. The members opposite should really have a look at those small businesses in their community and ask them: would they like to see a 30 percent drop in their customer base? I think that will more than take over. If you want to go back to a have-not status…. Do they want to see all those shops closed and all those papered-up and wood-boarded-up stores throughout their towns?
I remember driving through Port Alberni, in fact. I think it was 1998. There were shops boarded up. There were brown bags all over the windows because people just didn't even want to invest anymore because there
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were no customers. As I say, a challenge for those communities, and it was not good news for British Columbia. It was not good news.
People need to, when they take a look and listen to these debates, really take the time to seek out the facts. There are facts out there — real facts about the impacts to understand each and every area that may affect them. Then also take a look at the corresponding tax mitigation measures that are in place.
Our basic personal exemption. I heard members opposite earlier talking about doing income taxes. Yes, we're all in that. I haven't done mine yet, but I'm about to do it. Your basic exemption is going up from about $9,376, I think the minister has said — as I say, I've got the book; I haven't flipped to the page yet — to an $11,000 basic exemption. That means everybody who has more than at least $11,000 at that point will in fact have a saving there, based on the personal exemption rate going up and the taxes not being applied to that. That's a mitigating measure that's available.
Specifically for low-income individuals, as I say, with the $230 additional HST tax credit that's available to them, they will see it will be divided up into quarters so that every three months they receive a cheque. They don't even have to wait till the end of the year. They will receive a cheque every three months to help them pay for, perhaps, any incremental costs that they have.
When I take a look and focus on those low-income individuals, if they're earning $20,000 or $30,000, the majority of their spending, the disposable income, will likely be on their groceries. That is the major cost you have. On groceries there is no HST. If they're going to also have home heating fuel — another concern — well, again, that has either got a rebate or a point-of-sale rebate, so no cost on that.
No cost on prescription drugs. Again, another area where the members opposite have perpetuated this misinformation and, therefore, fear not only amongst young taxpayers but amongst seniors as well, and it's not true.
Day in and day out the members opposite are, unfortunately, preying upon the fears of a number of individuals because they're giving them misinformation. I do hope that people, now that the debate is certainly here in the Legislature, take the time to find out the real facts, because there are real facts out there.
There is real information that is available. When you have people take a look at that information, I know they will come to understand why this is occurring today.
When I take a look, as well, in the report, I know that the economists have said one of the reasons why we must make this move now is because we do want to remain competitive. The fact of the matter is that with Ontario moving towards this, with a number of the Atlantic provinces going to this, it will not be a question of if. It would be a question of when.
We do not want to see another province such as Ontario take advantage of the investment opportunities that we know are here in British Columbia. We know we have some of the best and brightest people here who can compete on an international level, but they're not going to be able to do that if the investors and the investment don't come to this province.
Once again, I see that my time is about over, but I just wanted to quote a couple of quick notes. The flyer that I see from the member for Delta North. He wanted to quote the B.C. Business Council and something about a report in 2009 that they had.
If he wants to quote the Business Council, he should also quote the most recent article written by the Business Council, by Jock Finlayson and Ken Peacock. In it they basically said quite clearly that if B.C. did not adopt the harmonized sales tax on the same timeline as Ontario, we would be at a huge disadvantage when it came to attracting the investment that we need to create jobs in this province.
That is the crux of why this legislation is so important. That's why….
Deputy Speaker: Members. Members.
Deputy Speaker: Member.
Hon. I. Chong: That's why, if they don't want to listen to me, they can at least listen to some of these renowned economists who they from time to time quote as well.
There was another article that was written, and they quoted two UBC economists. Even if they don't want to go too far and take a look at someone from Calgary, take a look at two University of British Columbia economists who have reported on this.
I thank you, hon. Speaker, for my time. It's been a pleasure. I hope I have the opportunity to once again talk about this.
Deputy Speaker: Member.
M. Mungall: I rise to take my place in this debate on Bill 9 and to speak against Bill 9. This bill paves the way for what simply is the wrong tax at the wrong time — the HST. In repealing the provincial sales tax, the B.C. Liberal government puts the final nail into a tax shift that was conceived and planned behind the backs of British Columbians. The clandestine nature of this tax shift is appalling. But what is more disgusting is that during the
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election, the B.C. Liberals promised to not implement the HST, to not do what they are effectively doing right now with Bill 9.
I've read those words during the election over and over again, and here they are for the record. "A harmonized goods and services tax is not something that is contemplated by the B.C. Liberal platform."
Looking at these words, technically they read as though it is only in the platform that they don't commit to an HST. Perhaps it's because they were contemplating it elsewhere, like next to a coffee machine while talking to the federal Minister of Finance. Yet it is in the platform where they need to make their commitments, their plans for government. That's a platform.
Let me be clear that a chat at the coffee machine is not the place that gives any political party the mandate to implement a major tax shift so quickly after a general election. It is the statements committed to in a platform and the promises made to citizens that give a political party mandate for action.
It isn't just me saying this. In fact, Wikipedia, on-line resource — everyone has access to it; I invite members opposite to go look it up — says that these two things, platforms and promises, are "an essential element in getting people to vote for a candidate." It's what we say to people: "Vote for us. This is what we're going to commit to you, the voters, when we make government. This is our plan."
So here we are. The B.C. Liberals used a platform sans HST to get themselves elected. It wasn't in there. So if it's not there, the assumption voters have is that it's not going to come forward here, because it's a major item that should be in a platform.
Not only did they not put it in their platform; they wrote to both the Greater Vancouver Home Builders Association and the Restaurant and Foodservices Association and said that the HST wasn't in their platform on purpose, implying that it wasn't there for the very reason that it wasn't a tax they would implement — for that very reason. That's why it wasn't there. It was on purpose.
This is where they misled the public. I've heard several members across the way talk about how members on this side are misleading the public with misinformation. Well, the biggest misleading that has been going on by anybody was the giant statement or lack thereof during the election.
Then two months later, without any consultation about the details on implementing an HST, the Minister of Finance made his announcement that in just under a year he and the B.C. Liberals would complete a tax shift of $1.9 billion called the harmonized sales tax. This announcement blindsided everyone and showed the extent to which the B.C. Liberals are completely incompetent when it comes to being upfront with the public.
So the shockwaves went out. Former B.C. Liberal MLA and current Coquitlam Mayor Richard Stewart, along with his council colleagues, sent a letter to the Finance Minister strongly opposing the HST. The letter said that the HST will "greatly impact an already faltering economy" and that Coquitlam "does not support the HST because of the negative impact on the residents of British Columbia."
Stewart isn't the only B.C. Liberal to break rank from the Premier and the Minister of Finance, questioning the timing of the decision and its impact on consumers.
Former Liberal Deputy Premier Christy Clark on CBC radio on August 14 said that she doesn't "think it's possible that the minister and the Premier only considered implementing the HST after the election," saying it was quite clear that British Columbia was going to be faced with this decision in March, a few months before the general election, when Ontario adopted it.
The largest province in the country adopting the HST, and yet the Premier and the Minister of Finance said it wasn't on their radar. Christy Clark said it's just sneaky all around. That's what she had to say about their comments when they said it wasn't on their radar.
Former B.C. Liberal MLA John Nuraney said there were ongoing talks about HST while he was a member of the B.C. Liberal caucus and also said that the new tax will be a significant blow to his restaurant business.
Cariboo-Chilcotin MLA Donna Barnett admitted….
Deputy Speaker: Member, no names.
M. Mungall: My apologies, hon. Speaker. Thank you for the reminder.
The member for Cariboo-Chilcotin admitted that consumers will see a price rise, saying that for her that is a concern and that she has some concerns. Well, we'll just see what kind of concerns she has when we all vote on this bill that paves the way for the HST.
We will see if she heard the pleas of the eight constituents who represent literally thousands of people in her constituency when they took the long trek from Williams Lake to here on the steps of the Legislature, asking, begging, pleading with her to vote with them, vote against the HST, vote with her constituents and not the Premier. Come spring 2013 I dare say they will remind her that her boss is her constituents and not the leader of her political party.
Former B.C. Liberal candidate for Vancouver-Kensington Syrus Lee said flat out that he opposes the HST, asking: "Why would the government do this?" Why would they do it? That's a question I've heard all over B.C.
I remember when a local Nelson accountant came up to me last summer professing that he is a card-carrying
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B.C. Liberal member. He carries his membership card in his wallet. He was livid with this move to an HST. He felt betrayed. And recently the Nelson Daily News reported that he is spending time with former B.C. Premier Bill Vander Zalm. I wonder what he could be doing.
People felt blindsided by this major decision that happened so abruptly, at least for the public. Not able to trust the minister's reassurances that the HST wasn't on his radar screen prior to May 12, 2009, the public at least, at the very least, wanted the evidence for this decision.
Where were the studies, the research, the analysis that said how an HST would impact B.C. and what would be the best ways for implementing it? What kind of studies had the B.C. Liberals done? There was none to be had.
No good, solid research backed up this decision before it was made. One political pundit calls the Premier's admission of his lack of study on the HST's impacts and what they would mean for B.C. an "admission of incompetence." This comment reflects the thoughts of millions. The lack of analysis is incredible.
In contrast to what has happened here in B.C., something different happened in Manitoba. To facilitate good decision-making, the Manitoba NDP government went and did its research before committing to repealing its provincial sales tax, before announcing any commitment or plan to implement the HST. They went to find out if this was going to be good for their citizens, and that's exactly what they should be doing. That is the role of government.
If they're going to make a decision, make it based on good, solid information. Do your research. Find your facts. Do it before you make the decision, not after.
So the NDP government in Manitoba went and did its research before committing to repealing its provincial sales tax, the retail sales tax, before committing to even contemplating the HST. This is what it found. With an HST in Manitoba, consumers would pay $405 million more in provincial sales tax. So there's no savings going to be here. They're going to be paying more.
How members opposite magically think that people in British Columbia are going to be paying less because of the HST, despite studies saying exactly the opposite…. They must be pulling that one out of a hat, because it's simply not being pulled out of any facts.
The Manitoba report also acknowledges that even items not directly affected by the introduction of an HST, such as residential rent, could cost more. The Minister of Finance has said: "No, that's not the case." But here we have a study which said that that's absolutely the case — not to mention the people who are in the real estate industry saying that, yes, that is going to be the case. Indirect costs from the HST are going to cost people more.
Manitoba has chosen, as a result, to not go ahead with an HST right now because they know exactly what 82 percent of British Columbians know, and that is that the HST is the wrong tax at the wrong time.
Let's talk about what British Columbians know. They know that the HST is going to cost them more. They know that they never got the chance to debate this new tax during an election. They know that the HST shifts $1.9 billion from big businesses and puts it right onto the backs of everyday citizens. They know that they are going to be paying more and getting less from this government, and they know that they can no longer trust the B.C. Liberals. They know.
I've said it before, and I'll say it again because it's a message worth repeating over and over and over again. British Columbians know that the HST is the wrong tax at the wrong time. This is what British Columbians know all over the province, including the vivacious, wise, little old ladies in Kelowna and the entrepreneurial and intelligent bike shop owners in Nelson. Contrary to the member for Comox Valley's statements in this House, the seniors in Kelowna and the cyclists in Nelson are convincing British Columbians about the negative impacts of the HST. Why?
Why are they so convincing? Just like the Canadian-Independent Group of Funeral Homes, Condominium Home Owners Association, practitioners of alternative medicines, hairdressers, restaurateurs, hoteliers, theatre producers, and the list goes on and on and on…. So why are the senior women and the cyclists in Nelson so convincing, along with all their friends in British Columbia, when they say that the HST is bad for B.C.?
They are convincing, hon Speaker, because they're the ones telling the truth. They are telling the truth about how the HST will impact them. It's a shocking concept — the truth. I know it's shocking members opposite, but it's actually happening. People out there throughout British Columbia are speaking the truth, and they are telling the truth that the HST is going to cost them more.
Annette Kazmar, a lively, vivacious Vernon senior, is telling the truth when she says that she cannot afford the new costs that the HST is going to give her on her fixed income.
Ross McNamara, owner of Gerick Cycle in Nelson, is telling the truth when he says that the HST is bad for business and it's bad for the environment.
M. Mungall: I heard a message coming from the opposite side of the floor, accusing my good neighbour Ross McNamara of being in the minority of retailers who think the HST is bad for business and bad for the environment. Well, let me remind members opposite that my good friend and my good neighbour Ross McNamara is, in fact, not a minority in British Columbia.
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He is with 82 percent of British Columbians who oppose the HST. That is who he is with.
That, by any math, is a clear majority. I know that they might have trouble with the mathematics, but it is a majority, and he is with millions in this province who don't like the HST. He has hundreds, thousands of customers coming in, complaining about the HST.
He's concerned about losing customers to Alberta, where they won't have to be paying the tax. That's very important for our communities over in southeastern B.C. The reason is that many of our tourists come from Alberta, and what do they do? They mountain-bike. They enjoy the extreme sports that we have to offer in the Kootenays.
They're not going to be looking to the communities they're visiting to purchase the equipment that they need to do their recreational activities, because it's going to cost them more. Members opposite don't get it.
They don't get it, and every time a British Columbian stands up and says, "I don't like the HST," all they are confronted with is condescending attitudes and patronizing words, and that is shameful. That is inappropriate.
That is exactly what the member for Comox Valley delivered the other day when he spoke of little old ladies in Kelowna and bicycle shop owners in Nelson, along with countless others in British Columbia. He delivered patronizing words, condescending attitudes, and British Columbians, including those in his constituency, are going to have none of it.
Unlike the member for Comox Valley, I've spoken to countless British Columbians about the HST, and I haven't met one person who likes it — not one. Senior women have legitimate concerns, and bike shop owners have been loud and clear. Like I've said, they are not alone. The Union of B.C. Indian Chiefs has said: "The HST will benefit many businesses by creating access to input tax credits to offset the full amount of HST spent by the business in conducting its activities." Cue applause, but they're not even applauding any more.
"However, the burden of the HST will be felt by consumers. Consumption taxes such as the HST are regressive, as they disproportionately affect lower-income households, and proposed HST rebates for low-income individuals and families will not offset the increased taxes. B.C. First Nations communities already experience high amounts of poverty and will, therefore, be detrimentally impacted by the proposed HST, further increasing economic marginalization and hardship….
"UBCIC strongly opposes implementation of the HST because it stands to increase the poverty of our people and of all poor British Columbians, and because there was no consultation with B.C. First Nations on implementation of the new tax regime."
So I'll continue in this vein, because why say it myself when there are countless people in B.C. who have said it so eloquently when it comes to opposing the HST and its detrimental effects on this province? Garth Whyte, president of the Canadian Restaurant and Foodservices Association, writes in an open letter to the Premier…. This letter is found on the website. I'll say the URL for members opposite so they can go to it and actually start to maybe engage with what people are saying in this province: nomealtax.ca — a very simple website. I encourage everyone to go to it.
Garth Whyte, the president of the Canadian Restaurant and Foodservices Association, writes in his open letter:
"The new tax comes at the worst time for the struggling food service industry. The drop in sales resulting from a new 7 percent tax, while competitive food products in grocery stores remain completely tax-free, will have an enormous job-loss effect.
"Our low-margin food service industry will have to reduce work hours or lay off thousands of our 173,000 employees. This includes 80,000 young people who rely on their jobs to help pay for their education. With a youth unemployment rate of 15.8 percent, we can't afford to jeopardize the jobs of the largest employer of youth in the province."
"Food service operators from every community in B.C. have been overwhelmed by the support they have received from their staff and customers. They are looking to your government to mitigate the negative impacts of the HST on our industry as promised in your September 1 budget speech."
Just to look at this letter, food service operators from every community in B.C. have been overwhelmed by the support that they have received from their staff and customers, overwhelmed by the support that they have received for No Meal Tax, their campaign against the HST. This should be indicative of the opposition that's widespread. It should be so obvious to members opposite of the incredible opposition to the HST, of the results of blindsiding a public when they make a major tax decision. But it's not. They ignore it, and all we get are condescending attitudes and patronizing words.
An entrepreneur named Amy commented on the No Meal Tax website. This is another reason why I encourage everyone to go and visit this website. There are an incredible number of comments from British Columbians from all over the province engaging with this debate on the HST because they didn't get the opportunity to engage in this debate during the election like they should have. So now they're engaging in any venue they possibly can, including on line.
Amy, an entrepreneur, commented on the website No Meal Tax just a few weeks ago on March 22, saying:
"As a small business owner in a small town on the border of Alberta, it is already a challenge to keep the taxmen happy and encourage customers to stay in B.C. rather than skipping over to Alberta to spend their money and to feed ourselves. The HST on food service and other services which were previously exempt will likely cripple our business, forcing us to close up shop. If this happens, we will join many of our friends and move to Alberta, where we can enjoy a similar lifestyle with lower taxes. While the financial implications to relocation would be beneficial, it would be a sad day to…leave our hometown."
And indeed it would. Indeed it would.
What is important to note here is that Amy's real-life experience and her real-life concerns are valid. They are legitimate, worthy of respectful response. Yet all she gets
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from the B.C. Liberals, like I've said many times — and hopefully the repetition will drive the message over to the opposite members — are condescending words, patronizing attitudes and now a paid-for, after-the-fact, 12-page report from a guy who lists the wonders of HST after he sends his $12,000 invoice to the B.C. Liberals.
Convenient. What's more convenient is that he wasn't as optimistic about the HST a couple of years ago — September 2008. Here is what Jack Mintz said in the report he co-authored less than two years ago: "These more positive results would come at the cost of a longer and deeper period of short-term loss, including, for example, an estimated reduction of just under 38,000 jobs in the second year."
That's 38,000 jobs, according to Jack Mintz, the guy who's charged the B.C. Liberals $12,000 for a pro-HST report. What he said is that we can anticipate a 38,000-job loss in the second year of the HST.
Anybody worth their salt trying to make a good decision and do their research on the opposite side of the House would then ask: "Is this on top of the 10,000 jobs that the tourism sector has identified that they are going to lose because of the HST, or does that include the 10,000? How many jobs are going to be lost because of the HST?" That's what people in my constituency want to know.
Jack Mintz also said that the HST would drive down real wages. The HST is not only going to cause job loss; it's going to drive down wages. "After several years of somewhat higher unemployment, however, workers come to accept the real wage losses." This is what he says on page 9 of his report from September 2008. "After several years of somewhat higher unemployment, however, workers come to accept the real wage losses." How is the acceptance of wage losses at all acceptable to anyone who truly cares about their community? How is it, hon. Speaker?
I hear members all the time say: "I really care about my community." Well, if you really and honestly care about your community, you would not implement a tax that is going to create a situation where people are used to getting paid less and where they have fewer jobs. That's if you really cared about your community.
He also said that it would lead to a long-term reduction in government revenue — a long-term reduction. There might be some short-term costs in GDP and employment, with a long-term reduction in the provincial budget balance. That's what he said before invoicing the B.C. Liberals for $12,000, and now he says something else.
You know, if what he says now is in fact the truth, why didn't the B.C. Liberals run on it in the election? Why didn't they put the HST in their platform? Moreover, as Paul Willcocks asks, why weren't the Premier and the Minister of Finance alert to that possibility a year or two ago? Why weren't they? Because they told us that it wasn't even on their radar before the election.
We have a lot of discrepancies coming from the opposite site side of the House, hon. Speaker. For that, I thank you very much.
Hon. M. Polak: I rise today to speak in support of Bill 9, the Consumption Tax Rebate and Transition Act.
I have to say that I have been rather interested listening to the debate going on. In particular, I'm assuming that all of the collected speeches of the opposition will be compiled into a book, soon to be released, known as "Why I Love the PST" by the NDP caucus and surrounding members. One cannot escape the secondary part of the argument that they make, which is if you really believe the HST is that bad, you must believe the PST is really good. You must. I haven't seen that publication yet, but I'm expecting it on shelves at Chapters any time after the debate wraps up, because that's the inescapable conclusion.
The NDP are very pleased to talk about what's on the record, and they have their own views about what's on the record, but I thought we really should pay attention to what has been on the record from B.C. Liberal election campaigns on into the mists of the past.
We can look at 1996. What was the platform? Jobs and the economy. We can look at 2001. What was the platform? Jobs and the economy. In 2005, jobs and the economy. In 2009, jobs and the economy. And what have we delivered? Jobs, jobs, jobs, and an economy that is still keeping us ahead of most jurisdictions in North America, even when worldwide the economic crisis is knocking down stronger economies that we would have thought were invincible to these kinds of changes in the world.
Responding to change is one of the very important things that one must pay attention to if you are going to run a government that produces jobs, that supports small businesses, that grows the economy.
What happens if you don't respond to change? Well, we saw that during the '90s. The NDP didn't respond to change; they ignored it. In turn, business and investment ignored B.C. for ten years. If the facts change, the right thing to do as government is to change your position, because it's the right thing to do even if it's not politically popular. That's the crux of this debate.
I understand that we in this House have our relative positions. In some ways, this is a really valuable debate to have because it highlights some of the fundamental differences between the way an opposition government might operate and the way that our government operates.
I can proudly say that in spite of knowing that implementing an HST would result in political flak, would result in difficult discussions with supporters, with
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others, I support it because it's the right thing to do. It's really easy to find something that you think is going to make you politically popular, and so you come and you slam it and you make all sorts of statements about it.
But it does have an interesting similarity to another debate that we've all just witnessed south of the border. South of the border they've just had a huge debate on health care reform, and here's what it was marked by: those who opposed it could only manage to oppose it by raising stories, scenarios about the coming health care reform that were completely inaccurate. They were completely inaccurate.
Over time that all became apparent, and one started to see even the mainstream media — even programs like Saturday Night Live and others — start to pick apart what the opposition forces had put forward as their supposed arguments against health care reform because, in fact, they were ludicrous. We're in the same position here.
It's also similar to what happened when the B.C. Liberal government of the day committed to providing a 25 percent income tax reduction. There was a hue and cry. This was going to destroy the revenue stream of government. This was going to ensure that there wasn't any ability to pay for health care, for education, for children and family development, but they were wrong.
In spite of the passions that are raised here, in spite of the frightened atmosphere that there is when people hear some of the mistaken information that's provided to them, I know that as I talk to individuals in my riding one on one and as we walk through the examples for their business or for their family as individuals….
I know that they look and say: "Well, why didn't I know that? Why is it that what I'm hearing on television, on the radio, in the newspaper…? How come that's what I'm being told? How come I'm reading in my local MLA's newsletter that this is going to be a tax on top of the PST?" Maybe he's hoping that this bill won't pass and that the PST will still be there, because that would be the result. I can only assume that must be why he was writing that.
But I know that long term, when you take a leadership position, when you do what's right in spite of the fact that it might not be politically popular at the time, that that is the way to good government. I know that in their heart of hearts that that's what people want, and that's what they elect us to do.
I truly believe that the HST is good for British Columbia, and I believe it because, if one takes a look at the research, it's quite evident that this fully aligns with our position of working toward jobs and a strong economy for British Columbia.
We can start by taking a look at the much-quoted Jack Mintz report. It's all well and good for the NDP to castigate someone like Jack Mintz, but as my father is fond of saying: "The one thing that's worse than an economist is an amateur economist." Jack Mintz is not an amateur economist. He knows what he's talking about.
Let's talk about the impact on jobs. He says: "While corporate tax reductions will have been helpful in achieving this aim, the largest aid to British Columbia's tax competitiveness will have been sales tax harmonization." Why? It's because of jobs. "Sales tax harmonization alone," he says, "will be responsible for an $11.5 billion increase in the capital stock and an increase of 113,000 jobs by the end of the coming decade."
Back to my point about how this highlights differences philosophically between our two parties. One of the things we believe on this side of the House is that it's not government that creates jobs. It might sound surprising to some people. It doesn't to small businesses, because small business people know that they're the ones that create the majority of jobs in British Columbia.
So what happens when you reduce the costs to small business? What happens when you reduce and then eliminate the income tax that they're going to have to pay? What happens when you get rid of the corporate capital tax that killed investment? You know what you have? You have jobs, and we can prove that on the record from our past, from 2001 to now.
All the tax reductions that we've made, all the ways in which we've put more dollars into the hands of businesses have allowed them to reduce their costs, and each and every time we've done that, we've seen more jobs.
This is about jobs, and the HST is going to produce jobs. There are good reasons for that. We can take this from the Canadian Centre for Policy Alternatives. Here's what they will accept. "It streamlines administration. It treats all goods and services equally and is more efficient than the PST as it allows businesses to get credit for the tax they pay on inputs, as a deduction off the tax they collect" — for exporters, in particular.
Remember the forest industry that we all want to see strong again in British Columbia? Guess what. They export. We make money from the forest industry when they are successful exporters, and here's what the Canadian Centre for Policy Alternatives, of all people, say: "For exporters, in particular, this allows them to reduce their prices by the amount of the tax they pay in imports that previously would have to be covered in the price."
Isn't that what we're supposed to be trying to do — help industries like the forest industry? Isn't the forest industry one of those places where we expect to see huge amounts of jobs provided for British Columbians? Of course it is, and of course that's the reason why the opposition ought to be supportive of the HST. But no. No, their love for the PST remains. They believe that cascading tax upon tax upon tax is good for business. I'm happy that they stand and at least put that position forward, but I wish they'd be a little more honest about it.
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We also hear about the myth of a brand-new tax. "This is a brand-new tax. Costs are going up all over the place." The only way that one can accept that this is a rise in taxes is if one believes the fiction that we don't already pay for the very many points of PST cost in manufacturing and other areas that businesses pass on to us now. It's an absolute fiction.
The C.D. Howe Institute puts that one to bed for us. They say: "But all taxes are ultimately paid by some people, somewhere." There is no PST tax fairy. When a business has to pay PST on an item over and over and over again before it reaches the counter where you're paying for it at the cashier, that doesn't disappear. There's no PST magic fairy that makes it go away. That has to get paid, and it gets paid by the price of that item that you are going to pay for as a consumer.
The added bonus you have with the PST, let's not forget, is that not only are you paying for it in the price that has been added up all the way along that they were making this product, you have the added benefit of being able to pay the PST once again when you purchase the product. I don't know any of my constituents that appreciate and support cross-taxation like that, but they're being told that right now they're not paying it.
They go on: "That is, we must distinguish between the 'statutory burdens' of a tax — in other words, who the tax law says must pay the tax — and the true 'economic burdens' of a tax. True economic tax burdens depend on how taxes levied on businesses are shifted forward to consumers through higher prices or shifted backward to factors of production like labour, capital and land through lower wages and rental prices."
This gives businesses the ability to control their fate. This gives businesses the ability to claim back the kind of taxes that they are paying now over and over and over again on items that they then have to charge us PST on once again. There is a myth that we are not paying the PST that businesses are paying. We are, because businesses are having to pay it.
I've also heard a lot of talk about the unfairness of this tax, and this is what really confuses me. I've sat in this House now since 2005. I now have charge of a portfolio that deals with vulnerable people across the province, and so I'm particularly interested when I hear the opposition attempt to defend their philosophy on the basis that it is somehow the best for low-income and vulnerable people.
That position alone makes me very surprised that an organization like the New Democratic Party wouldn't be rushing to support a tax like the HST. Finally, a tax where the people who are rich and spend a lot of money are going to pay the most, and the people who are poor and don't have the money to spend, won't.
The facts are indisputable. That's the way a consumption tax works. That's why consumption taxes, so-called value-added taxes, are popular around the world. In fact, that's one of the things that has commended them to social democratic governments in Europe — the fairness of it.
Take a listen to what comes from one of the "Tax Tips" websites from CRA: "There will be a slight increased cost to consumers to start, but because this is a consumption tax, those who spend the most will pay the most. Those with low incomes will be affected the least because they spend the least, and a higher proportion of items purchased by low-income people are not subject to HST, such as basic groceries."
As has been mentioned in this House many, many times, those in British Columbia will also be receiving a credit, a cheque in the mail that will more than offset the costs that may be associated with the slight increases that would be there with the HST.
We know that. The facts are there. In fact, I haven't heard people dispute that. They like to use broad-brush statements, but the only adding up that I've seen done is based on figures that include items that aren't actually HST-applicable. Again, the only way that they're able to argue their point is by making some things up, quite frankly.
If you get down to brass tacks, the people who are the wealthiest and who spend the most on luxury items will pay the most. This is by far the fairest way to tax and certainly provides much greater assurance to low-income people that they will be treated fairly.
But this still comes back to whether or not, according to this bill, we are going to repeal the PST. You know, I was going to say I find it fascinating that they don't support repealing the PST. Actually, it's not very fascinating. It's pretty obvious. That's really not it for them. If they didn't have a perceived battle in our legislative chamber right now about supposedly passing the HST or not, they'd be short of a very big issue that they've been able to capitalize into news media. That's really what it comes down to.
For the public to understand…. I know members laugh at it, because they don't understand how this legislation works. They actually have been telling people that this bill is about whether or not you pass the HST. If you read the bill, that's not what it's about.
The HST has already passed through federal legislation. Our role in determining whether we support this bill or not is whether or not we support the repeal of the PST. But clearly the member for Nelson-Creston wants to keep the PST. The HST has already been passed by the federal government. If we don't repeal the PST, we will have the wonderful joy of having another 7 percent that we will still be paying.
So, you know, I understand. I'm not quite surprised, really, that they're not telling the public that, because if that truly were the case, then the debate would be moot.
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But there's another reason why the debate's moot, and that is because while we've been straightforward about the fact that we support an HST — we believe it's the right thing for British Columbia; we believe that it's there to help us provide jobs and support for small businesses, to strengthen our economy — the opposition has not yet come forward with what on earth they would do.
They have not said if they would keep the HST. They haven't said if they would remove it. I suspect they wouldn't. They really don't have an idea as to where they would get the revenues that would be coming in from a harmonized sales tax once the PST was gone. So they haven't given a position as to what they would do if they were to be elected.
They're not going to, because if they were to admit that this legislation is about repealing the PST, and if they were to admit that they have no plans to get rid of the HST should they be elected to government, then the debate that they are engaged in right now would be pointless. And that's not something that would serve their political interests. It still comes back to that. Do you do the right thing in spite of how it feels politically, or do you go along and blow with the wind?
The poor beleaguered PST, though. There are some really good reasons not to like the PST. There's a report from TD Bank that has been quoted on a lot of areas around the HST, but I found this interesting to illustrate some bad things about the PST.
Actually, I think the public is already aware of this. I think that if you walked around and most of the people talked about the PST outside of this debate, they'd tell you: "Forget it. I hate the PST. I don't like it."
"In the past consumers ultimately bore the burden of a large chunk of the $6.9 billion tax bill, as businesses likely passed the majority of this tax to consumers in the form of higher prices."
Again, when you talk about the PST and its potential repeal, you have to really accept that there is no wisdom in retaining the PST. There is no wisdom in marching around and claiming that somehow the PST is so much better than any other tax.
I found another really good example. We talk a lot in this House about tax policy and things that, quite frankly, are pretty boring when it comes down to debate. What people want to hear is what happens in an everyday example. I found this from Stewart + Associates, certified general accountants, who have this scenario that I think illustrates really well what happens with the PST right now. In turn, it tells us why the HST would be so very valuable to small businesses and consumers alike.
Here it is — a quick example of how the PST currently works. Here we are.
"Under the current system of GST-PST, if a business were to purchase $100 in office supplies for their own use, they would be charged $112. This includes $5 for GST and $7 for PST. If the same business sold services and invoiced a client $100, they would collect $105 after charging their customers GST. This assumes their services are not subject to PST. The $5 in GST collected must be remitted to the receiver general, but they would offset this with the $5 in GST paid on the office supplies."
You see? They would be getting that back.
"No GST would be payable to the receiver general when they file their GST return. At the end of the day, the business collects $100 in net sales, but it spends $107 in office supplies because they don't get the PST back."
The net result on that $100 of office supplies — that business is short $7. Multiply that by how many thousands of businesses there are in British Columbia. Multiply that by how many thousands of purchases they make each and every day and then include — have to include — in their overhead when they create prices for us, the consumers who come to their cash register.
From examples like that, it's very clear to see why the PST is an inefficient tax. When we say that — boring, inefficient — what does it mean? It means that $7. It means, for businesses, that they're expending far more money than they need to. It means, for consumers, that we all are being taxed over and over again, the difference being that we don't see it. We don't see it, but it's still there.
Of course, debates like this bring out interesting characters. Everyone is aware of some of the interesting alignments that have taken place in this debate. Not the least interesting is the alignment of the NDP with a former Premier that I'm sure we all know.
What I find fascinating is that actually, reading some of the things that he's written, we probably get a better insight into what the NDP might have in store should they form government than, really, hearing from the Leader of the Opposition herself. Maybe that's why this particular Premier signs his letters "Leader, Fight HST." It's because, truly, he's the only one that's leading on that side.
He makes it clear. He said: "There's nothing wrong with the concept of a flow-through tax that provides input tax credits to business." He goes on to say that his only problem with the HST is that it is handing over sovereign constitutional authority to set the tax rate.
Well, I'm happy to inform the opposition, who may be considering the next leadership run of that former Premier for their party, that in fact they don't have to worry about that, because part of the agreement that we have is that after two years at 7 percent, we have the authority to be able to change the rate of the HST, the provincial portion. I'm happy to inform them of that. But it certainly does bring together some interesting alliances.
One of the things that I have also found fascinating about this debate is that while there are selected groups that people like to quote, we tend to forget the connection between the money that will be saved and the jobs that potentially will be created.
We hear very often from the opposition that the HST is only going to benefit big corporations. In fact, their
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erstwhile future leader here — what did he say? He actually said that the biggest beneficiaries of the HST will be the large resource companies that do not sell directly to the public. This I found fascinating. He says: "None of those resource companies will create a single job or pass a nickel of savings on to customers."
Is this to say that the opposition, through their perhaps future leader, believes that when the forest sector saves $140 million, that won't translate into jobs? Are you kidding — $140 million? That'll translate into mills. That'll translate into people working. In turn, that will translate into people being able to go to their local restaurant in communities where they haven't had the jobs and haven't been able to support other businesses in their communities.
The mining, oil and gas sector. We listen every day in this House to the opposition railing about the loss of jobs in forestry, in other resource sectors. Yet they support the view that somehow these resource companies aren't going to produce jobs? That sector is going to save an estimated $80 million. Those companies are going to invest in jobs. They're going to invest in expanding their operations. They're going to invest back into the industry in communities all around B.C.
Take the transportation sector. It's estimated they're going to save $210 million. Do they honestly believe that companies are going to save amounts as large as that and that they are not going to invest in their businesses in British Columbia, especially when we'll be providing them with such a competitive tax rate? It's a ridiculous assumption.
It's estimated that $880 million will be saved in the construction sector, one of the other very many backbones of British Columbia. They cannot possibly be serious in believing that the construction sector, on saving $880 million, isn't going to translate that into jobs.
Madam Speaker, $140 million in the manufacturing sector — $140 million. Again, it's difficult to believe, but it appears it is what they believe. You have an opposition that believes that in spite of the resource sector, the construction sector, the manufacturing sector, in spite of them saving hundreds of millions of dollars, it will have no impact on job creation. That's what they believe.
Then it comes to the examples that they provide to people out in the field who are trying to make sense of this, who aren't waking up every morning thinking of tax policy. What do they give them? They give them a bunch of malarkey about how much their costs are going to rise, in particular to seniors, which is particularly upsetting.
In fact, I listened with interest when my colleague the member for the riding of West Vancouver–Capilano. I listened with interest as he took apart an e-mail that had gone around that was all about, supposedly, the actual budget of a senior couple. I won't go into his speech.
He went through every little detail of the potential costs that they had, analyzed it all, took it all apart, but at the end of the day, this fellow — who is a Harvard-trained economist, was a chief economist for the Royal Bank — ended with this: "My very prudent financial planner figures it out to be a tax increase of 1.5 percent."
Meanwhile, those who had been sending around the e-mail were basically taking the position that this couple was going to be spending thousands and thousands more dollars every month. It was absolutely not true, but the e-mail keeps going around. In fact, the e-mail included a whole bunch of things that aren't even HST-applicable, but it said that they were.
I've had many seniors who write to me, who e-mail me, very concerned about their home energy costs. They're very concerned about paying for natural gas, for electricity.
When I tell them that home energy costs are not going to see an impact from the HST because of the actions that we've taken, they're surprised. Why? Because that's not what they read on the NDP website. That's not what they hear from my colleagues across the way. That's not what they hear from the Fight HST campaign.
I know this. I know that if the only way you can fight an information campaign is with misinformation, you're on the wrong side of it. You might have support for a short time, but the public is actually pretty smart. After a while, they start to look into things themselves. They start to find out the facts. Then they come around to seeing the truth, and they will make a decision based on the truth. I know they will.
There is no safety in politics in taking the popular route. The only safety that you have in politics is by taking the route that is right. If you know it's right, you do it in spite of a potential political price.
This past week I had occasion to speak to a friend and supporter of mine who had called to talk about the HST. We spoke briefly, and his concerns were about the potential political problem that the HST presented. I spoke to him a little bit about how I saw that playing out, and nevertheless, his concerns remained. I'll be candid. I agree with him. I have concerns about that.
There's no telling what issues might be there to motivate the public in 2013. But the question is: should I let that affect my decision? The answer is no. Nobody values a leader who sacrifices what is right for the sake of that which is politically more popular. I know in my heart of hearts that, based on the facts in evidence, the HST is the right thing for British Columbians.
Going back to talking about what happened in the U.S. just recently. I had the privilege of watching a bit of Barack Obama's speech at the end of presenting the wrap-up to the health care reform debate at a rally somewhere in the capital. He said what I think is most
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appropriate to finish this speech with, because it's something we should all think about.
He said: "Everybody is talking about what the polls say. Everybody is saying that the Democrats are going to lose. Everybody is saying that this is a politically damaging issue." He said: "I don't know what's going to happen. I don't know what the polls are going to say. I don't know what's going to happen in the next election, but I know that this is the right thing to do." I would say the same thing about this in British Columbia. I don't know what the future is going to hold.
In any case, Madam Speaker, I know that what you need to do is the right thing in spite of what's popular and in spite of what political flak one might take.
Deputy Speaker: Member.
Hon. M. Polak: And if that's something that makes the opposition laugh, then that's fine. I'm happy to take that because I know it's the right thing.
M. Karagianis: I'm happy to take my place in the debate here on Bill 9, the Consumption Tax Rebate and Transition Act.
First of all, I would like to say that it's very fascinating to me that we are in the course of debating a bill after the government of this province has actually turned over our taxation rights to the federal government. This has got to be a phenomenon like none other, that we in British Columbia would actually back and support a shift of our own taxation out of our hands and hand that over to the federal government to look after.
I know that the previous speaker even alluded to the fact that we have no way to even alter this agreement with the federal government for several years. So you have to ask yourself: "What kind of government decision is taken that cedes your taxation rights to some other level of government without any kind of consultation with the citizens of your province?"
Is that what the citizens of British Columbia asked their government to do — to cede taxation to Ottawa? I do not once ever remember in this province having that discussion with the residents and voters of this province, to say we are going to now give away our taxation rights to Ottawa. That discussion has not taken place, and there is the first and most fundamental flaw of us debating this Bill 9.
In fact, we're standing in here talking about the HST. What I've seen occurring here under the B.C. Liberal government is a shift now away from representation of the people by their elected officials. In fact, I've seen a government that has developed a scenario of winners and losers.
We've seen it in other policies that are being undertaken by the government right now, but this, the HST issue, clearly is a tax shift that is creating winners and losers in the province.
You know, it's funny, coming out of the last couple of generations where we were often looking for win-win out of things that we did. I know that in the municipal government level that I worked in for nine years, you were always looking for a win-win with your community. You were always looking for a way to balance your community's needs with the hard decisions you had to make. But in fact, now we have, under Bill 9 and the HST in this province, a government that is choosing to pit winners and losers against each other in the tax system.
Along with that, we have things that have occurred here that have been fundamentally true and things that have been fundamentally untrue. So not only do we have this winner-and-loser mentality being driven by this government, but we have a government that has fed into the cynicism of the voter by creating true things and untrue things and confusing one with the other.
I would talk very specifically about the pre-election time period a year ago when, going into the election, the economy and the economic health of this province were first and foremost on the mind of most voters. During that process, we did not once see this harmonized sales tax be a part of the debate that British Columbians were having as they led into the days before going to the polls and they had to make a decision about who was going to rule this province and run this province for the next four years.
Never once was the debate laid before them that this government was about to initiate a harmonized sales tax on the province, shift our responsibility for taxation out of British Columbia to Ottawa and begin to impose a winners-and-losers system on to British Columbians.
I'm sure I know why we didn't have that debate. I've been in politics long enough to know that that would have been a deal-killer for the B.C. Liberals, had they laid out very clearly that they intended on instituting this new harmonized sales tax. So in fact, we saw in the pre-election stage no discussion on the harmonized sales tax.
Because of that, I would argue — because, fundamentally, the truth was not told to British Columbians leading into the last election — that this government has no mandate to institute a harmonized sales tax. They have a mandate based on the things that they promised British Columbians last year, in the spring of 2009. They do not have a mandate from the electorate to impose this tax that was never once laid before them.
I would say that fundamentally the voters of British Columbia now are being forced to accept, again in this winner-loser scenario….
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Deputy Speaker: Minister.
M. Karagianis: Thank you, Madam Speaker.
In this winner-and-loser scenario, British Columbians are being forced to accept a tax shift away from big corporations and directly onto consumers, a regressive taxation program versus a progressive taxation system.
At no point, a year ago, were we debating this in the days leading up to the election. I wish we had been. I wish we had had that very honest and frank discussion, because I think the outcome of the election would have been considerably different than what it was.
As we look at this Bill 9 and this harmonized sales tax that is coming forward, I want to look at some of the other untrue things that British Columbians have been told about this. We hear a lot from the other side of the House here about how great the HST is going to be for us, how great it's going to be in creating jobs. But the reality is that some of the facts defy that claim by the government.
This idea that it's going to increase investment in British Columbia…. If you look at most of the major investment costs for big business in British Columbia, they're already exempt from the PST. So how is it that the HST is now going to somehow change that for them? No, it's not.
Production machinery and equipment were exempted from PST in 2001 at a cost of about $160 million per year. They already had many of those exemptions. So I fail to understand the government's logic in saying that somehow the HST is going to strip away PST costs from business in a significant way that's going to fundamentally change the price of production or manufacturing in this province.
Again, you have to look behind these claims to say that the facts here very often do not support the government's claims. A $1.9 billion shift away from corporate taxation onto consumers, I think, is something that British Columbians are saying is unacceptable.
We know from the polling results that voters are looking at this and saying: "This is not acceptable to us. This is not what we expected when we re-elected a government in 2009." They're turning out in droves to protest this. The polling results are very obvious in this.
In bringing in the HST, the government then tried — eight months into the debate, when it was very obvious from the fervour with which the electorate was pushing back on this and the outcries of foul play from the government — to link this to health care. They made a really poor and clumsy attempt to try and justify this.
I think that, as we've seen this whole debate on HST really get some momentum, it is because of these kinds of really amateurish and juvenile tricks that the government has tried to pull in order to justify this.
We've seen words used by the pundits like "hokey" and "gimmicky." It seems to me a bit undignified that the government has allowed not only this bad HST to be instituted without a mandate but, in the very way that they have tried to justify it, they are now calling into question their own dignity on this. Words like "gimmicky" and "hokey" are being used to classify the government's attempts to justify this.
Again, if we look at some of the real evidence that's being provided by experts that have nothing to do with the political debate taking place in here…. I want to look at the information that the Toronto Dominion Bank has provided here. I know that British Columbia voters know this. They know that in this winner-and-loser scenario that this government has set up, in fact, the consumers, taxpayers and families across this province are ultimately going to be the losers in this harmonized sales tax.
The TD Bank did an analysis of the effect of the HST on consumers in both British Columbia and Ontario. Their report concluded that in B.C., 21.4 percent of goods and services that British Columbians buy will be newly subject to the HST. That in itself will have a huge impact on affordability for families across this province.
I know that the government is pretty indifferent to the plight of ordinary families in this province. We see it right across the scope of their actions here. But in fact the TD Bank also said that B.C.'s PST applies to a smaller base of goods and services than sales tax in other provinces. So the effect, in fact, on top of the consumer is far larger here than it is even in the other provinces that have instituted it.
I know that often the government likes to use other provinces' experiences as a justification for themselves. But the reality is that the TD Bank says that our PST applies to a smaller base. The HST will apply to a larger base, and once again, in British Columbia, we are going to be feeling a larger impact than any other province in Canada. Once again, our consumers and our families in British Columbia are going to be bigger losers in this game.
I talked earlier about the justification that the government has tried to roll out here to make this more palatable for British Columbians. I know that at one point, there was talk that HST would be revenue-neutral. Well, I think they've even abandoned that because they've had to concede some exemptions here.
In fact, in the first few years, this is actually going to lose money for the province of British Columbia. You have to say to yourself: "What kind of harmonized sales tax are we bringing in that the government seems unclear themselves on the basis of this?" This information is freely available to the government members, if they wanted to avail themselves of that.
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At the end of the day, the biggest impact is going to be felt by my constituents and by families all across this province. All of the opinions of Toronto Dominion Bank or all of the opinions of other experts across the economic sector are really kind of meaningless when you get down to the grass roots of: what does it do to families in my constituency and other constituencies across British Columbia?
We have families that have been under attack for nine years by a government that has continued to chip away at the well-being and the standard of living for families in my constituency and right across the province. We now have terms like "working poor" in British Columbia. We have families that are struggling to make it from payday to payday, that are seeking out food banks as a way to stretch their dollar.
Now we have a government that is bringing in a new tax that shifts money away from the corporate sector and back onto these vulnerable families. I would say that more and more families are vulnerable under almost a decade of B.C. Liberal governance here.
In addition to the harmonized sales tax that's coming down here, we also have additional costs that are mounting every single day and new ones coming into effect even while this is being debated. We have families in my constituency that are struggling with higher ferry fares. We have hydro costs due to go up 30 percent over the next couple of years. We have families that are seeing MSP premiums increasing.
I'll talk a little bit in a moment about all of the impact that the HST is going to add to that. But when you have a B.C. Liberal government that has always got their hands in the pockets of working families…. Families have seen not only their costs increase everywhere they turn before the HST is being implemented, but we have an environment here that has been created by a government that reaped the good times and that has no idea what they are going to do now that the economy is struggling. In fact, we've seen a huge shift, a huge number of jobs lost.
We've seen, worse than that, a huge shift away from family-supporting jobs to jobs that cannot support families, so that families are struggling. Thousands of jobs lost in British Columbia, replaced by part-time jobs or low-wage jobs. We have a government that has refused to raise the minimum wage in almost a decade here in British Columbia. All of those compounded issues are having effects on families.
What do we have? We have now a government that is bringing in a harmonized sales tax that will shift money away from big corporate interests onto the backs of consumers who have already had almost ten years of cuts and off-loading and a government that has not put the interests of this province's families first.
Highest level of child poverty in Canada. I know that the government likes to say: "Oh, you know, it's not there; we don't hear it; go away." It's a reality. It's a Stats Canada reality.
During the boom times in this province, when the economy was good, we were creating poverty in British Columbia. What we were producing was poverty in British Columbia. We were marginalizing more and more middle-class families. We have had no comprehensive child care program. We have education systems struggling from underfunding with school cutbacks.
When we look at Bill 9 and the HST, we know that it is only going to add to the difficulty that families have that are struggling from payday to payday. The HST is going to add more to that. We will all pay more under HST.
I would like to talk a little bit about what kind of things in everybody's day-to-day life are going to be taxed here. The reality is that there will be very little in the average family's life that is not going to be hit by the HST, a tax that they have not paid in the past, because it is going to be levied on restaurant meals.
Many groceries, such as snack foods or other foods that are prepared for lunches — right? And let's be realistic, Madam Speaker. Salads, the kinds of things like sandwiches, heated foods, beverages, muffins, coffee — the things that people consume every single day and that working families rely on rushing to work, feeding their kids school lunches. All are going to be now subject to HST.
School supplies. As if families don't have enough burdens, school supplies are also going to be hit by an increase under the HST. Recreational services, amusement parks, campground fees, museums, things like whale-watching tours. These are the kinds of things that consumers are using every single day in this province, and I know many families are now going to find all of these things a luxury that is out of reach because the cost has gone up.
Accounting services, veterinary care. Anybody who's a pet lover knows that it's expensive enough without adding to that. So the family pet now becomes more expensive.
If you want to do renovations, architects are going to become more expensive. Real estate agents, any kind of classes you go to. Martial arts. You've got your kids in karate? That's going to cost you more. You have your kids in any kind of a sports program? It's going to cost you more. At a time when we know we should be living healthier lives and making sure that families have access to things like sports programs, we're making them more expensive.
Facility and ice rink rentals — I know we've canvassed that here. The HST is going to be levied and passed on to families, so they are now going to have to make hard choices not only in affordability of their hydro and MSP, but now even kids' hockey fees are going to go up. If you look at things like haircuts, personal care services,
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vitamins, dietary supplements, magazines, bicycles, funerals…. There is so little left that does not affect families every single day in this province.
I know we've canvassed this issue of funerals before, but it seems to me that this is once more an onslaught onto families in British Columbia. It seems a burden that should be far too much to bear. You have to say to yourself at some point that this will be the straw that breaks the camel's back.
When I see how hard families in my constituency work to raise healthy children, to contribute to their community — they work hard getting back and forth to their jobs and making sure that their kids have some advantages — I see that this government has gone in and levied the HST right on top of all those quality-of-life things that they had to choose from. So more and more families will have to make tough choices about that.
Repairs to home appliances, energy-efficient home appliances — at a time when we want to be recycling, reusing, being greener, when you have to replace something or use something that is greener and more environmentally responsible, we're now taxing that as well. It only is a bitter twist because we have a government that has declared themselves as being somehow champions of climate change and that they would make this the greenest province, yet every action they're taking here takes us in the very opposite direction.
Laundry, dry cleaning, carpet cleaning services, car wash. Basic telephone service. It's not even like you can pick and choose. Many of these things are essential to surviving in a modern world, and the government has now found a way to add to the burden of every one of these things.
Smoke alarms, cable service, work-related safety equipment — these were things that very specifically, over a long time of consultation with communities, business and municipal governments, were exempted from PST because it was found to be good public policy to make some of these things more accessible to families. Now we've moved completely away from that to bad, bad public policy because we're going to tax all of those things.
The HST is an onslaught against families. It's unfortunate that we have seen fit here in British Columbia, that the government now thinks this is the appropriate thing — without a mandate, without consultation, without being truthful with voters one year ago. In fact, when the HST was first announced eight months ago, they'd only been a few months from the election.
We went through an election where this was not laid on the table in an open and frank way. Now the government is confident that they can win over voters' approval by simply ignoring the outcries or by talking over the public and trying to tell them that black is white and white is black and what you see in here is not true.
I want to talk a little bit about the impact this is going to have on seniors as well, because seniors, as we know, have spent their whole lifetime contributing to and building this province. Many of them have managed to get a pension or scrape together a little nest egg. Lots more of those seniors, in fact, are living on fixed and low incomes. When anything like this new tax assault comes up, it hits seniors very hard.
Families may be able to make choices. Maybe our kids don't get to take sports programs this year. Maybe they don't get to participate in some of those things because we'll have to sacrifice that with the extra costs right across the board — everything from our hydro going up to our ferry fares to our MSP to the sales tax, now HST, on every single thing we touch. Families might have some room to make choices, but seniors have very few places where they can make those choices.
We already know that seniors have made many hard choices here as costs have been downloaded onto seniors, and it's become less and less affordable for them. They have had fewer and fewer places, and so seniors choose not to eat. They choose to only eat once a day because they feel too proud to go to the food bank or they can't make it to the food bank. So they cut back there. It's a choice between medication and food very often or between heat or the luxury of cable and telephone.
When we see that this government is levying a harmonized sales tax on the very things that these seniors will have to give up now to afford, I think that is probably the most mean-spirited part of this whole harmonized sales tax.
It's interesting that the scenarios here, even around seniors who are in care, are going to be pretty dramatic. The amount of harmonized sales tax levied onto facilities that care for seniors is also going to have an impact. Even if you're in care, now you're going to have some new hard realities to face.
The B.C. Care Providers Association came out with an impact analysis of the HST last summer, and I think it speaks very strongly to how really callous the government is about the impact of this HST. I hear the members stand up and talk in glowing terms about how trickle-down economics is going to save us all because the savings will be passed on from the big corporate manufacturer who gets a tax break. It'll all somehow trickle down.
But the most disturbing part, I think, of the impact analysis that was done is the very direct cost and impacts it's going to have on seniors — again, seniors who don't have a lot of options. I see that this is going to drive, in fact, more seniors into more deep and abject poverty. I think that is a deplorable situation and a deplorable move on the government's part.
But when I look at what the B.C. Care Providers Association had to say here, it does sort of paint a very,
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very harsh picture, and one that I think reflects back onto families. I think it shows the magnitude of the implications of this tax.
It says here that while the size of the tax will vary from facility to facility, depending on the number of services they provide, it will definitely have impacts no matter what services are provided. Scenario 1 here says that a hundred-bed facility with no contracted-out services, which represents the minimum impact for all facilities — the minimum — will add $14,690 in additional tax onto those seniors facilities. Larger facilities will see anywhere upwards of $60,000 to $200,000 in increased tax implications to those. Those will be passed on to seniors, and that is going to cause more hardship.
If that's the kind of implications to a care facility that has some economies of scale, we can only anticipate how awful this will be for many seniors who don't have the economies of scale.
I know there's been some interesting debate here about what the HST implications will be to new homes. I know that in reading the threshold here of $525,000 and that anything under that only has a small HST component…. It was interesting to look at the prices of homes in my constituency and across the lower Island here, because $525,000 is kind of the mean average.
In fact, if you're buying a home right now at $526,000, if you don't qualify to fall under the threshold, that's an extra $40,000 in harmonized sales tax fees that you will pay above and beyond; never mind the real estate and all the other compounds — so $40,000. At a time when we need to be making housing more affordable for families, and we know there is a bit of a runaway real estate market, this is only going to exacerbate that.
The public oppose this tax. We know that. Right now there are people running, overwhelmingly, heading to sign petitions. We see the polls have said that the overwhelming majority of British Columbians oppose this tax. When you see such a groundswell, why do you not listen to the people? Why would you not listen to the people?
Hon. K. Krueger: I rise, of course, to speak in support of Bill 9. For those watching from home, this is a bill whereby we repeal the provincial sales tax.
I was the Minister of Small Business, and one of the responsibilities of the minister responsible for small business is to chair the Small Business Roundtable, a permanent round table that has a number of very strong representatives of small business from around the province. Some of them and I would travel to the corners of the province, and we would meet with small business people.
There are 380,000 small businesses in British Columbia. They employ 1.050 million British Columbians, and I don't think the NDP think much of them. You can tell that by the sporadic heckling off to the side. They don't think much of job creators. They don't think much of the employers. They consider them the enemy, I think.
Small business people at these Small Business Roundtables would say to me, "The one big thing that your government could still do for us, Mr. Minister, for small business in B.C., is to harmonize the sales taxes, is to combine the 7 percent provincial sales tax and the 5 percent goods and services tax for the federal government. Make it 12 percent, and be done with it" — so that they didn't need to do separate books for the federal government and the provincial government.
They would tell me: "When you work out that ratio — 1.050 million employees divided between 380,000 small businesses — it's less than three employees per small business." Very often it's two spouses and one of their children or a friend's child or a person that they'd gotten to know over the years, but less than three people on average.
They said: "Pretty much one of us" — the owners — "spends most of our time doing administrative work for the two governments, and that's a big drain on our business. Please, would you harmonize the sales tax?" Every time they said it to me — because it was our policy right up to and through the provincial election, which happened May 12, 2009 — I would say: "We won't do that, because there are some goods and services in British Columbia that are not subject to provincial sales tax, and we don't want to change that."
We are the tax cutters. We have cut taxes over 120 times in British Columbia since we became government in 2001 so that presently a British Columbian earning up to $118,000 income per year pays the lowest income taxes in Canada. Effective January 1 this year, 2010, we increased the basic personal amount of the tax credit to $11,000, an increase in that credit of $1,627. In addition, the spouse and equivalent-to-spouse credits were increased by $1,627 over 2009 levels.
For most taxpayers, British Columbians' personal income taxes have been reduced by 37 percent or more since 2001. Additionally, 325,000 low-income British Columbians pay no provincial income tax whatsoever.
British Columbia has lowered the small business tax rate from 4.5 to 2.5 percent in 2008, the second lowest in Canada. We're on track with all our financial targets in our budgets. By April 1, 2012, the tax will be cut to zero, the lowest level in Canada. That is for the employers of 1.050 million British Columbians, and it'll be a lot more by then, because the B.C. Liberals have a long, tried-and-true, proven history of increasing employment in British Columbia.
Even now with a worldwide recession, we are hundreds of thousands of jobs better in British Columbia than the NDP ever had in British Columbia in those very sad years that they formed the government. We're
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always increasing employment. We're always doing better than most other jurisdictions. We're always listening to workers and their employers alike and making positive changes.
In January 2010, B.C. increased the small business corporate income threshold from what was a $400,000 threshold to $500,000, the highest in Canada, which saves small businesses an additional $20 million per year. They pay that to their employees.
The NDP is always talking about how we ought to increase minimum wage. They have promised over and over again to add 25 percent to small business employers' payrolls — 25 percent, just artificially. They think it'd be a big deal to move the minimum wage to $10. Well, the average British Columbian is already making more than $21 per hour. The average youth is already making more than $13 per hour in British Columbia.
All the NDP did with their interventionist tactics, their tax-and-spend approaches in the 1990s, was drive the economy under and create unemployment, desperate unemployment, so that our largest export in the sad, lost decade of the '90s was British Columbians — people moving away, especially young people, who weren't going to put up with it, and employers, who weren't going to put up with it.
Since 2001 our government has eliminated the general corporation capital tax. It's been reduced from….
Deputy Speaker: Members. Order, please. Can we just listen to the minister.
Hon. K. Krueger: I should tell the members the story of Mr. Ohkubo, who bought Tod Mountain Ski Resort and turned it into Sun Peaks — beautiful resort, second-largest ski resort in British Columbia after Whistler Blackcomb, three mountains now.
Mr. Ohkubo said: "I'm going to spend $40 million and put in new lifts." He mapped out what he intended to do, and he actually did it more quickly than he had said, more quickly than he'd planned or than any of us anticipated. We couldn't believe what a wonderful investor had come to make our ski resort one of the premier ski resorts in British Columbia.
One day his bookkeeper gave him some cheques to sign. One was to the NDP B.C. government. It was a huge cheque, and he said: "What's this one for?" And the bookkeeper said: "It's called corporate capital tax." He said: "Well, how does it work?" Well, it's a tax on what you own, even if you borrowed money to build it — a tax on your assets. Mr. Ohkubo said: "There won't be any more investment while something like this is going on."
Well, I'm happy to tell the members and my constituents that Mr. Ohkubo continues to invest. He's a wonderful employer. He's still with us, and he likes what the B.C. government is doing.
So yes, I would tell the small businesses that we are the tax cutters. We have a long history of cutting taxes. Over 120 times we've cut them, and we don't intend to harmonize sales taxes.
Hon. K. Krueger: The member from Merritt is yakking as he usually does, and I think if his constituents ever came down here and actually….
Point of Order
H. Lali: I'm going to ask the minister to withdraw his remarks. Those were unparliamentary.
Deputy Speaker: Would all members please remember that we are in the chamber here and to ensure there's parliamentary language and also to ensure that we can hear the person who's speaking and not to be speaking across the floor to one another.
Thank you, Minister. Please continue.
Hon. K. Krueger: I'll just put out a personal invitation to the member's constituents. The Premier wrote me a letter during the last term and said: "Would you please take on the responsibility to be Merritt's buddy MLA because they're just not happy with their MLA?" I said, "Sure," and I've been doing it ever since.
The day after the May 12, 2009, election, I had constituents from Merritt and from that member's constituency calling to ask if I would continue working on their constituency files because, to their great sorrow, they found that he'd been elected again. I could show the member those files…
Deputy Speaker: Member.
Hon. K. Krueger: …but I wouldn't because I think he would punish them.
Hon. K. Krueger: There he goes. He's doing it again, and I don't know what he considers a more parliamentary word than "yakking." I can think of a lot less
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parliamentary words. But I think he's a marked man for the next election, and I'm working hard to make sure that happens. I talked with a whole bunch of his mayors just recently.
Deputy Speaker: Minister, one moment.
Member. Will the member for Fraser-Nicola please just be quiet for a while and listen to the minister's comments.
Hon. K. Krueger: The B.C. Liberals believe that the money a person or a business earns should be at their disposal. That's why we've cut taxes over 120 times. We think the money people earn has more power in their pockets than it does in a government's coffers, and that is why as British Columbians we pay the lowest income taxes in Canada on up to $118,000 in income.
We've cut many other taxes besides income taxes. I was the minister for revenues, as well, in my career thus far, and I had the responsibility of reading taxpayers' appeals. I read an awful lot of them, and I accepted quite a few of them. I read how much people hate the provincial sales tax, how arbitrary and ridiculous they thought it was with all the long lists of exceptions and needing to have accountants.
If you're a guy who buys a tractor with a front-end loader and you use it in your business because you need it and you think you're entitled to provincial sales tax exemption, you might find out that you aren't entitled, by some arbitrary rule. There are schedules of these things. They drive people crazy — weird schedules of exemptions. It's very onerous for small business, and they really dislike it.
When I heard all of those small business people say, "The best thing you could do for us is harmonize the sales taxes," I consistently said to them: "We won't be doing that. That does not jibe with our way of doing things."
I was the Minister of Community and Rural Development after my friend Stan Hagen sadly passed away while in office and right through the election. I don't think anybody asked me all through the election — no opposition candidate, no member of the public — about whether we would harmonize sales taxes, because people knew our position. That was our position, and it remained our position right through the election.
The first time I ever heard one of my colleagues say that we should reconsider that was after the election, and he said it for very good reasons. We had no such intention up until after the election, but my colleague said we should reconsider for a number of reasons.
For the first time ever, the federal government is offering flexibility. There was no flexibility before. You had to go at 13 percent, which would have been a tax increase across the board, because we're only paying 7 percent PST here and 5 percent GST, so the sum is 12 percent. But for the first time we had the option — if we wanted to harmonize, if we wanted to listen to all those small business owners — to do so and only charge the existing 5 percent plus 7 percent, or 12 percent. To my constituents, that is what HST will mean to you for almost everything that you're presently paying sales taxes on — 12 percent, 5 plus 7, just what you're paying now.
The second reason was that Ontario, the largest economy in Canada, had committed to the HST. That is a very, very serious challenge, a threat to our economy, because if Ontario had HST and British Columbia didn't, we would lose investment dramatically to Ontario.
A very clear illustration of the fact that Ontario is a power economy when it makes a move that's more attractive to taxpayers than what we're doing is film tax credits. Ontario increased film tax credits in July 2009, since I became minister responsible for that industry, and immediately the industry was calling and saying: "We've got a real problem here."
There were seven months of anguish in the industry about whether or not we would find a way to match that challenge, because they said film production was moving and would move in volumes to Ontario. The NDP, my opposition colleagues across the way, were shouting: "We must act. You must do something." My critic was after me to do something about it. What he wanted me to do and what the industry wanted us to do was to match Ontario.
Well, we didn't match Ontario. We found a B.C. way of doing things that the industry is by and large very happy with. But if the NDP are so convinced when Ontario makes a move on tax credits for the film industry, then why don't they realize — if they think we ought to match Ontario — that the HST is a far more serious threat if Ontario harmonizes and British Columbia doesn't?
Every independent economist of repute in the country is telling us that. Even economists that we don't normally rely on because we think of them as the NDP's think tank, like the CCPA, are saying that HST makes sense. Sadly, when it's politically convenient, the NDP opposition will say the opposite things on positions where they really ought to be saying the same things. On the HST, they don't care about what Ontario does. On film tax credits, it's the opposite. They really care about what Ontario does.
There's flex that was provided by the federal government — the ability to go with 12 percent instead of 13 like every other province in the country that's using HST. And there was the Ontario issue, a huge issue for us. There are also new and large financial benefits to the B.C. taxpayer.
In a time when we're all dealing around the world with the worst recession that most of us have seen in
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our lifetimes, the federal government — recognizing that this is a pretty drastic change for a provincial government to undertake — put on the table $1.6 billion, which has helped us pay for health care, education and social services and soften the blow of the worldwide recession on British Columbians.
The federal government took 400 people from our payroll, or will be taking them, who have been administering the provincial sales tax, and they'll pay their salaries for the rest of their working lives and their pensions. We went for the flexible position, 5 plus 7 — 12 percent HST, the same sum that people in British Columbia have been paying for most goods and services up until now and, as I've said, the lowest in Canada for HST.
Now, there's a problem for those industries where provincial sales tax was not being charged on the economy up until now on their goods and services. Some of them deal with customers — the fast-food industry, for example. Many of the customers are very low-income, so those businesses have been concerned about that.
Well, there's a response to that, as with every tax move we've made. With many of the difficult decisions we've had to make over our nine years now in office, we've made a special provision for low-income earners. Some 1.1 million British Columbians who have low incomes will receive HST credits. They'll receive cheques. For a family that has less than $25,000 income, the HST credits will be $230 for each family member. For a family of five, that would be $1,150 free money, cash, to make sure that they aren't badly affected by the HST.
Much of the civilized world has switched to value-added taxes. There was a really interesting letter published in the Kamloops Daily News. I live in Kamloops. I represent Kamloops–South Thompson. An individual, who I know is respected by the NDP, and should be, because he was one of their caucus in the '90s, so respected that he went straight into cabinet, I believe, when he was first elected — he's an engineer — breezed into the NDP cabinet, and rightfully so…. He's been apparently aghast at what the NDP are saying and who they're in league with in saying it, so he wrote this letter.
I've noticed that the opposition members across the way are fond of reading letters into the record. Surely they'd like one from one of their former colleagues, so I'm going to put part of it into the record. I won't read it all.
[L. Reid in the chair.]
It's entitled "We Get What We Pay For." The former NDP cabinet minister, Art Charbonneau, the respected engineer, asks why people complain about the tax levels here. He says: "I like paying taxes" — I'm not making this up — "because that allows me to live in a country with good services and good regulation. Across northern Europe, countries like the Netherlands pay higher taxes than those we complain about."
I don't think he complains about them, actually. I certainly don't. Never have.
"The value-added tax in the Netherlands is 19 percent; in Denmark, Sweden and Norway, 25 percent." He goes on to say what those countries do with their tax revenues, and they're doing things like we are.
We have the best education system I know of, which gets the best results that I know of. The only reason British Columbians don't have confidence in it is that some of the unions who live off that education system, and the members opposite constantly spread their version….
A. Dix: Are you still quoting from the letter?
Hon. K. Krueger: No, this is not still a quote from that letter.
Hon. K. Krueger: Yeah, I am very concerned about accuracy. The member's right. I went off on a bit of a tangent.
Those Scandinavian countries spend on social programs like we do, doubling the health care budget, doubling the number of doctors and nurses in training, vastly increasing the amount that we put into the school system per child.
The member across the way, famous for his memo-writing abilities and habits in the past, I might add, urges me to go back to Art Charbonneau's letter. I think he's right. I should do that.
He says: "All of this is supported by higher taxes. I would point out that these countries have always been governed by social democrats, close brethren of the NDP." I'll keep on reading, and I'll try and mention if I start adding my own thoughts, so this is still a quote.
"The strategy of some Tories like that of the Republicans in the U.S., is quite simple: cut taxes, cripple government, and let the poor and unfortunate take care of themselves, or let them rely on charity."
Now I'll add my own comment. That doesn't happen here — does it, Madam Speaker? That doesn't happen here. We look after the unfortunate in British Columbia. I know that the members opposite think that's what we should do. I know that's what they tried to do when they were in government, but it was hard for them because they were constantly running huge deficits, and they just couldn't afford to look after people the way that we are.
I'll go back to quoting from Mr. Charbonneau's letter. He says: "So the tax rebels in B.C. would block the HST. In fact, I believe they would roll back both the PST and the GST." That's what he thinks. Oh, that was my comment. Back to Art:
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"But the unfathomable thing is that many of those who would lower or eliminate taxes are the very same who complain about shortfalls in funding for health care and education.
"It appals me that the NDP is standing with Vander Zalm to block the HST. Are the NDP and Vander Zalm also recommending higher income taxes to offset the loss of government revenue? I don't think so."
That's what Art said.
I do think so. I think the NDP would jack up income taxes like they did before. I think they would jack up HST, like the government of Nova Scotia, which is an NDP government, just did — just jacked up HST.
Deputy Speaker: Members.
Hon. K. Krueger: I'll go back to quoting Mr. Charbonneau, Art Charbonneau. He says: "I can understand Vander Zalm's position, but darned if I can understand the NDP's, unless they are just jumping on the anti-tax bandwagon like a bunch of Johnny-come-lately Reaganites because they know it will garner votes."
The members opposite have been wanting to heckle. I would like to hear what they think of Art Charbonneau suggesting they are Johnny-come-lately Reaganites. That must smart a little bit.
I'll go back to what he says. "It can't be because they want to protect the poor, because with the HST the poor will receive an increased quarterly credit, just as they receive a GST credit right now." I like that paragraph. I'll read it again. "It can't be because they want to protect the poor, because with the HST the poor will receive an increased quarterly credit, just as they receive a GST credit right now."
My own commentary here for a moment. I didn't hear any heckling when that was said, because Art Charbonneau wrote it. Art Charbonneau was the darling of the NDP government of the '90s, and he deserved to be because he was one of the few smart ones, and he was a guy everybody respected. He wouldn't have said that because he's so modest.
Now I'll go back to quoting him. Art Charbonneau says: "So I'm puzzled. How do people think we can fund education and health care at the levels we all desire unless taxes are increased?" Now I'll go to my own commentary. Because we aren't increasing them, for almost everything. It's just the sum of the existing taxes.
Back to Art: "How can people complain endlessly about the level of government services and want lower taxes at the same time? But most of all I'm wondering: when did the NDP become an anti-tax party? Why aren't they standing, not with Vander Zalm, but with the social democrats of Europe in support of better social benefits based on higher taxes? Tommy Douglas must be spinning in his grave." That's Art Charbonneau. That's the end of his letter.
I really wonder what the folks opposite think of that — a very respected man, an honest man who was caught in the socialist web for a while. It still sounds like he thinks like a tax-and-spend socialist. He left cabinet by choice. He left the government by choice. He had actually been nominated for re-election in '96, and he decided not to run. He said personal reasons at the time. I suspect he was heartsick at the lack of positive results of the NDP.
When he was first elected — and he didn't know that I was not an NDP supporter — he was such a good guy that he would call employers in from the chamber of commerce, and he would ask us to have breakfast with him. He'd talk to us, and I'd go to his meetings. It really never came up who was a socialist and who wasn't, because he just wanted to know what we thought. He was that kind of MLA. Even as a cabinet minister — very busy.
You know what he said to us at the end of his second year? "I just can't understand it. We thought we ought to increase welfare rates in the province, so we did," and I think they were the richest welfare rates in the country at the time. He said: "At the end of our first year we had 20 percent more people on welfare than we did to start with. We couldn't believe it. At the end of our second year we had 20 percent more than that total."
Art just couldn't understand it because he sincerely believed NDP theory and NDP dogma, and he saw that that way of doing things doesn't work. But if you let people keep the money that they earn, if you're very judicious with what you do with that money, if you cut taxes every which way you can, if you're efficient, if you do things to encourage productivity, you build an economy. A rising tide does lift all boats, and we've made sure that that happens. Our economic results speak for themselves, and they put the NDP to shame.
I heard a story one time that kind of has application here, and I thought: "You know, I hope Art Charbonneau lives to be 150 years old." But when he passes on, his tombstone may well say: "Here lies Art Charbonneau, an NDP-elected person and an honest man." Little kids walking by might say, "Hey, mom, there's two people in that grave."
There's a lot of dishonesty that goes with being a person who would stand up in this House and say the kinds of things that get said, when the public is told that things are going to be subject to HST that aren't. The members know that. They know that things that they're putting on the record as being HST taxable will not be.
A member just before me tried to frighten seniors. That's a common tactic of the NDP, and that is reprehensible. It isn't an honest thing to do, so yeah, we're going
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to have 1.1 million British Columbians receiving those tax credits. We're going to have a value-added style of tax such as is working in the progressive economies around the world.
All of the leading unaligned economists in Canada are saying it's the way to go. Very low-income people receiving credits won't be paying any HST at all. With lower-income people who pay some, the less they spend on anything that is HST applicable, obviously the lower the HST they'll pay.
The higher-income people who spend more will pay higher HST. If you can only afford a $10,000 car, you'll pay one-fifth the HST of the person who buys a $50,000 car. If you can only afford $2,000 worth of furniture, you'll pay 1⁄20 the HST of the person who can afford $40,000 worth of furniture. The taxation by the HST is commensurate with spending power and spending experience. What could possibly be fairer?
Now, Art was both an NDP politician and an honest man, and he's a straight shooter. He's not afraid to publish a letter like that in the Kamloops Daily News, knowing probably that some of the NDP, who can be pretty nasty in Kamloops and elsewhere, are going to punish him for it. But he was too smart to stay in NDP politics.
There is very real and present evidence of how smart Mr. Charbonneau is and how smart the NDP are. I want to talk about his comment about how in the world they could be working with Bill Vander Zalm. People have said "in bed" with Bill Vander Zalm and with Chris Delaney. What a weird bunch of bedfellows.
Chris Delaney, a perennial ship-jumping, erratic wannabe, always a bridesmaid — and a pretty strange one — never a bride. And Bill Vander Zalm. Fantastic Bill had the brass ring. He was the Premier of the great province of British Columbia for the mighty B.C. Social Credit Party, the party of W.A.C. Bennett, and it was a mighty party. W.A.C. Bennett built it. Back in the day — his day — the NDP slurred him. They corrupted his initials and called him Wacky Bennett.
I always feel like slapping people who say that. He was a wonderful guy, and he deserves respect. I never do slap them, because I don't do things like that.
Hon. K. Krueger: Oh, careful what you say, Fraser-Nicola. Careful what you say.
The NDP corrupted his initials and called him Wacky. I loved him — my whole family did — and for good reason.
He was an excellent Premier. He built the highway system. He built the dams that are the heritage properties of B.C. Hydro, still benefiting us — our children, my grandchildren, British Columbians for generations. Built the dams and the highways. Wouldn't run deficits. Kept the books himself. Was his own Finance Minister while he was Premier.
Now they praise him. They talk about W.A.C. Bennett as if he was their patriarch, and I can almost hear him laughing every time they do it. I bet he cracks up every time the NDP praises him. When he was Premier, he would say, "The NDP couldn't run a peanut stand," and they proved it.
S. Fraser: I'm happy today to take my spot in this debate for Bill 9, the Consumption Tax Rebate and Transition Act. The previous member…. I see there's a lot of latitude, because I can't remember if he was talking about this bill at all. He was talking about W.A.C. Bennett. I don't know.
I'll move on to the bill. The bill itself, the Consumption Tax Rebate and Transition Act, doesn't really tell the true story of what's going on with this act. This is the precursor to the HST. This is what's needed to bring in a tax that has been rejected by British Columbians.
Call me old-fashioned, but I believe that the role of government — any government, any party — is to represent the will of people. We do that through a polling system called elections — elections, Madam Speaker. People vote in elections based on certain ideologies sometimes, based on promises, based on assurances and that sort of thing, based on policy positions.
I think the debate today on Bill 9 is a very, very fundamental one. The people of British Columbia voted to not have the harmonized sales tax. That was the mandate that this government has. This Liberal government got elected on a mandate to not bring in the HST.
I hear the debates here. You know, there are lots of numbers thrown around, but for me it's a much more fundamental debate.
This is a tax that is reviled by British Columbians — has never been accepted by British Columbians. Poll after poll has said that, post-election. The election, which is the main poll for British Columbia…. The real tale there was that British Columbians voted no to an HST, and this government got elected on that premise. They have no mandate to bring in this tax.
A year ago — if we went back a year ago…. I think it's a year ago today that the writ dropped. I believe it was the 14th of April 2009. This government — the writ dropped — ceased to be government. They went to the polls, as we did in opposition.
The people of British Columbia had to make a tough decision at the polls: who to vote for. The assurances given by the B.C. Liberals, by the candidates in that election, have changed since then. The electorate voted to not have an HST.
I don't know which poll it was. It was Ipsos or Angus or one of those. It was about two months ago that they polled just B.C. Liberal voters. The question put…. I'm
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paraphrasing, but the question was: would you, as a Liberal voter, have voted Liberal had you known that they were going to actually bring in a tax, as opposed to saying they were not going to bring in the HST? And 17 percent of those voters, Liberal voters, said they would not have voted Liberal if they had known the truth.
That's how fundamental this debate is today. It's about democracy. It's about failures of democracy, because the electorate expect to be able to take to the bank the assurances, the promises and the policies of a party that they're electing to government. They have been betrayed, Madam Speaker.
If we go back in time, one year ago today the writ dropped in this province of British Columbia. B.C. was immersed in an election campaign. The Liberals were looking for their third mandate.
Hon. K. Krueger: And we got it.
S. Fraser: The minister is correct, Madam Speaker. They got it. They got it by saying that the HST is not even on the radar screen — in writing — assuring their supporters and others, assuring British Columbians that this was not part of the platform. "This isn't part of the package you will be voting for." That's what they told the electorate.
Now, having access to substantial polling resources themselves, the Liberals were aware that telling the electorate, pre-election, during the election, that they were planning to impose a brand-new and massive tax on them would be, I would suggest, problematic. It would be as bad, or worse, as saying that once again the B.C. Liberals would be running the worst deficit in the history of the province of British Columbia — which, of course, subsequently they did. The question, then, for the Liberals was how to win the election with these kinds of challenges, with these kinds of handicaps.
Tell them what they want to hear: "No new tax. No HST." Tell the public that the HST would be damaging, that it wouldn't even be contemplated. This was a premise and a basis for the election platform of the B.C. Liberals. Tell them that the deficit would only be $495 million and not a penny more. Remember that one? Before the election, $495 million deficit, and after the election? Well, they were a bit out — 600 percent out, almost $3 billion.
Now, for anybody who has run a business — small, medium, large, corporation — if you're out a bit, you've got some explaining to do. If you're out 600 percent, you're turfed. That's what would have happened if this government had been straight during the election. After getting elected on those premises, on those promises, the next challenge would be to find a way to do the original plan, which was the polar opposite of those promises, no matter how distasteful to the public and no matter how big of a betrayal the public would feel.
The first thing the Liberals did was to make, in my opinion, a very flawed decision. To assume that the electorate that put them in office based on promises that they did not keep…. Their assumption was that that electorate was stupid, gullible and easily manipulated. It is a story that is reminiscent of Mark Twain, The Adventures of Tom Sawyer, I would suggest. It connotes that to me.
One of the most famous scenes, for those who recall, in Tom Sawyer is the whitewashing of the fence. Now, after Tom Sawyer…. He got in trouble, if you recall. Aunt Polly punished him by making him whitewash the fence. Now, this was a distasteful job for Tom Sawyer, because his friends were not working. They were enjoying themselves, playing, eating apples. Of course, everyone who has read Mark Twain and Tom Sawyer remembers that Tom manipulated the other boys into completing the job for him. He manipulated the other boys into completing the job for him.
By the time the fence was finished, Tom was becoming a wealthy fellow, relatively speaking. As each boy was manipulated into buying turns at the fence — painting the fence, the dreaded job — he gained treasures of marbles and firecrackers, bits of glass and other goodies.
Well, there's an analogy here to Bill 9, Madam Speaker. Thank you for allowing me some leeway here. The analogy with the HST and Bill 9 is quite clear. The B.C. Liberals adopted the persona and tactics of Tom Sawyer. The boys to be manipulated, as depicted in Twain's famous novel, were seen by the Liberals as the electorate, the public, and the distasteful task of whitewashing the fence was the implementation of the very distasteful HST.
Tom Sawyer manipulates the boys into believing essentially the unbelievable: that Tom's punishment is actually desirable for them. That is reminiscent of what we're seeing here with the B.C. Liberals and their attempt to sell what amounts to a broken promise by implementing the HST.
The Liberals, as Tom Sawyer did, are spinning this to the public. They're trying to get them to believe that the dreaded HST, spurned by the Liberals before the election and during the election, suddenly became the best single thing for the economy — 180 degrees. Tom Sawyer would be proud. Whitewashing the fence becomes a wonderful thing to be desired, better than playing with your friends. And the HST? It becomes the biggest whitewash of them all — a real, real whopper.
You know, the public is not stupid. They're not so gullible, and they're not so easily manipulated. That is reflected in the polls, as we know. The public does not support this bill. They do not support the HST. It is not what the public voted for. The Liberal government has no mandate to bring in this tax.
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The public remembers Mark Twain. They know this deception, and they are mad about it. The Liberal members should know that, if they dare go to their constituency office on their days off. We don't get many days out of the Legislature right now, but surely Liberal members talk to their constituency assistants. They know the anger out there over this betrayal.
Nobody in this province, I would submit, believes that the single greatest tax shift in the history of this province, which is now being foisted on them by this Liberal government…. No one believes that that election deception was not on the radar screen before the election and during the election. I would submit that no one — certainly no one I've talked to — believes that adding $1.9 billion a year to the cost of everything from haircuts to hockey helmets will help the people of British Columbia. They're not buying it.
Nobody believes that taxing funerals and bicycles and restaurant meals and hockey ice time for kids in minor hockey is going to help the people of British Columbia. That is who this government, any government in this province, should be representing — the people of British Columbia. They have rejected this tax, and they are rejecting this government for bringing it in after promising not to.
No one believes that shifting $1.9 billion a year on to the backs of British Columbians, that to shift almost $2 billion a year to benefit a few corporate sectors that donate to the B.C. Liberals, will trickle down to them. That stuff went out with Reaganomics. Let's look at that. The Liberal government is trying to spin to the public in a way that Tom Sawyer would be very proud of. He's trying to spin to the public that this $1.9 billion tax-shift burden on the people of British Columbia will somehow trickle down to them.
There's been no agreement — formal agreement. There's been no commitment. There's been no quid pro quo negotiated by this government with those corporate sectors to reinvest one dollar in the province of British Columbia out of that $1.9 billion bit of largesse, a windfall for Liberal donors.
They don't have to create one job. In Bill 9, which will bring in the dreaded HST, there's nothing that says any of that massive tax shift has to go towards creating one job in the province of British Columbia. They could, those corporate sectors, turn around and pocket every dime. There's nothing to stop them — not this government, because they're not looking out for the public interest. They're trying to spin something that is unspinnable.
All of that $1.9-billion-per-year shift could go right to bonuses for CEOs. It could go into the pockets of shareholders as dividends. There's not one commitment to pass on any of those savings to the public — nothing. Yet the Minister of Finance and the Liberal members claim that it will happen somehow, by a miracle — that they won't just pocket the money. We're being told that. British Columbians are being told that. Well, the Liberals have shown by example that that's not likely to happen, that they're not going to pass on the savings to the public.
Corporations need to make profit, so to suggest that they'll voluntarily pass that profit on to the public instead of to their shareholders, with no requirement to do so…. Well, that might be a bit of a tough one. You never know. It could happen. It hasn't happened. It could happen, yes, but it's not going to happen, because the example set by this government says the complete opposite. If the Liberal government is trying to get us to believe that that money, those savings, will be passed on to the public, then why aren't they doing it themselves?
Let's have a look at this. Let's look at the liquor tax portion of this. The PST on liquor was 10 percent, but the HST will only be 7 percent, so there should be a 3 percent trickle-down to the public. By the same rationale that these members and these ministers have been using, it will automatically flow because the benevolence of the corporate sector will allow for all that profit, $1.9 billion a year, to trickle down somehow.
The Liberal government is doing the opposite. Rather than passing on 3 percent savings on liquor to the public, this government, which has a monopoly on the distribution of liquor, will adjust the liquor markups to maintain government revenue and keep after-tax shelf prices constant. They're taking that trickle-down that should have gone to the public, by their own analysis of how this HST should work, and they're pocketing it. They are picking the pockets of British Columbia with this tax.
The public still remembers 2003. Rural communities like Port Alberni and all the forest communities in the province remember it very well. That's when the Liberal government went along with what they call forest revitalization. I hate using that term. The Liberal government went along with a premise that if they gave that corporate sector everything — massive tax breaks, deregulation, self-policing and control over massive tracts of public land for free, paying nothing back to the taxpayer…. If that happened, that one sector would create zillions of jobs, billions in investment.
Well, those corporate donors got everything, more than they asked for. They got over 800 square kilometres of land out of public control of tree farm licences for their own benefit, for free — massive profit there. Where was the trickle-down? The promises that were made — where did they go? They went nowhere.
We've lost tens of thousands of jobs in the forest sector since forest revitalization. There's been no investment. Well, I should pull back on that, for accuracy. There's been investment in mills in the United States, so that our raw logs can get transferred over there at the expense of
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our jobs, our mills. Seventy-one closed down under forest revitalization.
There's been no public benefit. It has been all to the detriment of the public, and this government is trying to spin to the same public of British Columbia that the same model — transferring the wealth, $1.9 billion a year, from the people of British Columbia to several corporate sectors who donate to the B.C. Liberals — is going to benefit them because it's going to trickle down. Well, the two examples I just gave prove otherwise.
The B.C. Liberals have failed to provide the benefit of trickle-down with the changes in liquor taxation, which should have resulted in a 3 percent drop in pricing for the public, but they pocketed it. They haven't even got it yet. They've already announced they're pocketing it. Trickle-down — with liquor tax, yeah. There's a good analogy there.
The exact same thing. They're saying that giving a bunch more tax dollars, shifting it to the forest corporate sector, is going to benefit us in jobs and in reinvestment and innovation. None of that happened in 2003. The opposite happened.
You could have an argument, I suppose, if you were a government that was looking out for the public interest. You could put it to the public. You could tell them. You could say: "Look, we're going to bring in this tax, and this is why. We want to talk to you about it. Let's consult with you. Let's base an election on it. You can make that decision. If you buy our arguments that this is somehow going to benefit you — spending $1.9 billion more a year on such a huge variety of goods and services in this province…. If you believe that, well then you can vote for it."
They didn't give British Columbia that opportunity. British Columbians didn't get that opportunity. They were led to believe they got the opportunity with the election that was almost a year ago. When the writ dropped one year ago today, the Liberal voters that voted for Liberals voted for no HST. If they had known the truth, they wouldn't be government. They have huge resources for polling. They knew that.
It was an election by deception, and it is personified by Bill 9, the Consumption Tax Rebate and Transition Act. At this point in my 30-minute speech on Bill 9 the Consumption Tax Rebate and Transition Act doesn't seem to be a very accurate title. Sounds pretty innocuous compared to what happened in reality — over $1.9 billion a year to several corporate sectors out of the pockets of British Columbians.
We have lots of numbers. We've heard from all sides of the House. "Here's what it might mean, how much it's going to cost. Here's where it might benefit." It's the largest tax shift in the history of the province of British Columbia. It is moving wealth from most British Columbians and putting it in the hands of a very few. That's known as a regressive tax — hugely beneficial to those at the very top of the economic spectrum at the expense of those that need it most.
The next sales pitch on this one. Again, Tom Sawyer would have been proud, and I think the Liberals are actually way out of that league. Tom Sawyer would never have thought of this. "We'll link it to health care." That's what the Finance Minister said. He said: "Every dime of the HST will go towards health care."
Well, anybody knows how the treasury works here, and members on the Liberal side know that too. These moneys collected through taxation and other income to the Crown, to the treasury, sort of go into the general scheme of things. They're used for all kinds of things, like health care; roads; education; in theory, protecting the environment; other things, too, that we're seeing dismantled; into forestry. It used to.
But to suggest that all of the money that's going to be collected from the HST is going to go into there is ridiculous when you consider that at the same time, the minister is saying it's revenue neutral.
That was before a lot of the exemptions came through because of the political pressure to try to give exemptions for this dreaded tax because of how much damage it will do to so many sectors. That pressure was extreme, so exemptions were given.
Now, there are several calculations, but somewhere between $100 million and $200 million a year is going to be lacking from the treasury of British Columbia after this tax is imposed. We're going to see a loss of between $1 million and $2 million a year in services to the public.
Tom Sawyer trying to convince his buddies that painting the fence, the dreaded job, is a good thing. It's the same idea. It's just been taken into the stratosphere by the B.C. Liberals, because they're trying to convince the public that voted in the last election against the harmonized sales tax.
They're trying to convince them that spending $1.9 billion more a year, which will create a loss in the tens of thousands of jobs in the restaurant and tourism sector, just to name a couple — that this huge tax burden, which will lead to massive job loss — will also give us the added benefit of reducing by $100 million to $200 million a year the services that the government can provide to the people of British Columbia.
How do you dare sell that one? That is why we must fight this tax. That is why we on this side of the House in the official opposition are standing up for the people of British Columbia. That is why seven MLAs from the Liberal benches must represent…. It just takes seven of them to, I would suggest, live up to their oath of office and represent their constituents and vote this tax down.
M. Dalton: I am pleased today to stand in support of Bill 9, the Consumption Tax Rebate and Transition Act.
[ Page 4309 ]
I've had numerous conversations, as have most members here, to talk with constituents over the past number of months. I find that in general, most people get it. They understand, even if they have been initially quite hostile towards it. As we have a conversation and explain the benefits and the rationale, I find that almost everybody seems to understand it.
I know that we have a task ahead. I have a task ahead of me in my riding to explain this, but I believe that the message is getting out, will get out, and that British Columbia will be in a much better place in the years ahead because of this tax.
I'm hearing that we did not run on the HST, that we hoodwinked the population. That's from the opposition. I would like to say this. When I was in the election, I didn't hear one word on the HST. There were no questions, and I talked to thousands of people. But I will say one thing, and that is that we ran on the economy.
Normally, anywhere in the world, when you have an economy that is souring, that is tanking, in a democratic country, that is not the time to have an election for the governing party. That's normally the time when the governing party gets voted out, because people are angry. Well, this didn't happen. Why didn't it happen? Well, I believe that there's still some memory out there from the 1990s, when the NDP…. They still remember. There is still that memory.
There is a reason why the NDP went to two seats in the election in 2001. There's a reason for that. That's because they tanked the economy, and we'll talk more about that later on.
They voted for us. Why? Because there were positives. There was prosperity. There have been a lot of positive things that have been happening — infrastructure. Taxation has gone down. The province has prospered under the B.C. Liberal government. There were some tough choices that had to be made.
As far as the HST, think of an illustration. Perhaps different members have gone on a cruise or a trip, and the cruise ship has an itinerary. We're going to go from this port in Mexico and to this port. It could be in the Caribbean. Then what happens? A hurricane happens. Well, I suppose that ship could go from port A to port B, but there would be consequences to that. We faced a hurricane last year, an economic hurricane, and it took political courage. We adopted the HST last year. We're in the process now.
Now, this is not new. The HST has been recommended, has been advocated for every year for over a decade by various business groups, by the B.C. Chamber of Commerce. Every year it's reviewed. What happened last year? Revenues collapsed. Natural gas prices collapsed. We were losing hundreds of millions of dollars every month. Exports were tanking worldwide.
This wasn't just something happening in B.C. It was something that was happening worldwide. In Alberta they had 15 years of surplus budgets, and then they went into a $6.9 billion deficit. The federal government had 11 years of surpluses, and then they went into a $56 billion deficit. There were job losses. There were a lot of things that were happening economically. Also, Ontario is moving into the HST.
We are in a global economy. We're also in a Canada-wide economy. We are competing with the other provinces — Ontario, for example, with the movie industry. We were beginning to lose a lot in the area of the movies. They're starting to move that way there because of tax incentives. We're in a competition. Things have swung in our favour again, and we saw an increase in movie revenue last year, and we're going to see that increase. So this is not new as far as the HST. There were a lot of economic reasons for adopting it.
Also, there was increased flexibility on the part of the federal government as far as exemptions, so we're able to have a much more made-in-B.C. tax. Some of the exemptions, as we know, are gasoline, books, prescription drugs, home heating, children's-sized clothes, women's hygiene products, diapers, and so forth.
One other thing is that the federal government permitted different HST rates. We will have the lowest HST rate in Canada. We have the lowest income tax rates, up to $120,000, and we will have the lowest HST rates also.
Another factor is that the federal government gave an incentive — $1.6 billion. Now, why is there an incentive? Because the federal government recognizes that the HST is good not just for British Columbia but for all of Canada. So we have this extra $1.6 billion, which comes in very handy at this time. It's the responsible thing to do. It's not been easy.
We see the polls also. But the people of British Columbia elected a government that they felt would make the tough choices, even though it might be politically unpopular. The popular thing might be to just totally ignore it. Just keep on going. Forget the HST. Keep on going as before. We made a tough choice. I know that this will benefit the entire province.
We are not a tax-and-spend party, and I'm not a tax-and-spend politician. For one thing, we've seen surpluses year after year. We have a triple-A rating, which is basically evidence of good fiscal policy, of being well managed as a province. It's the reason I joined the B.C. Liberals — because I saw how they handled the economy, how they were making good choices.
Now, 85 percent of Canadians will be in an HST jurisdiction by July 1.
Income taxes. We have the lowest income taxes, as I mentioned, to $120,000. Why am I going to talk a little bit about taxes when I talk about the HST? Well, I think I need to show our track record, and our track record
[ Page 4310 ]
is reducing taxes. Making it easier for small businesses, making it easier for corporations, making it easier for individuals — these things are important for growth.
Let me just give a few examples. I know that the NDP advocates supporting those that have lower income. When they were in, in 2001, income taxes for someone earning $20,000 were a little over a thousand dollars. Today it's $91. That's a savings of $917. It's about four months or more, 4½ months, for someone who has a subcompact car driving every day — $50 to fill up their tank a week. So every time for the next 4½ months someone in that wage category can thank the government for reducing their taxes, or perhaps their transit fare for half a year.
Now, what about at $50,000? A savings of $2,000 now, as opposed to when the NDP was in, which would pay for perhaps a vacation or some furniture. Someone making $80,000. Well, $80,000 is how much I was making as a teacher. How much we're being taxed now is over $4,000 less than when the NDP was in.
At $80,000, a $4,000 savings could pay for university tuition for a term or two per child, or you could remodel your home, or within five years you could pay for a car — just in income tax savings. That's our motivation — to keep taxation in families', in individuals' hands and in businesses'. We want to see growth.
In comparison to other provinces, we are paying $5,000 less in income tax now, for someone making $80,000, than in Quebec. Someone earning $20,000 would be paying a thousand dollars less than in P.E.I.
I heard one of the members say a little earlier that it's the wrong tax at the wrong time. It kind of reminded me of what the opposition leader said about the Port Mann bridge: "The wrong bridge at the wrong time." It also reminds me of the Olympics and the opposition towards the Olympics year after year, saying: "This is going to drive our economy down. This is a terrible thing."
When we see the results, it's like: "Hmm. Well, maybe this is a good thing." And it is a good thing. It was a good thing to bring the Olympics here, and the HST is a good thing.
The NDP does not have any credibility on tax matters. I went back to their 1992 budget, their first budget, and it was very interesting. What did they do in their first budget? Well, they increased income taxes. They increased small business taxes. They increased corporate taxes. They added a corporate capital tax.
The next year they were on a roll. "We'll increase sales tax." The PST. Like it? They increased it. Taxed us to death. They drove businesses out, and people moved out of the province. Now, that's sad.
I know that the members on both sides of the House are not here to want to harm the province. I have respect for the members. They're good people. It's the taxation policies which I don't agree with, which I'm speaking against.
The NDP. What happened, we all know, is that it became a have-not province in comparison.
Now, I taught in the public school system for many years prior to being elected. I was a socials teacher in high school when the NDP was in. It was interesting. I would receive forms. There were graphs, and it was talking about employment in the different sectors. It was interesting. I saw month by month the employment in the private sector going down, the employment in the public sector going up.
As a teacher at that time — and I know that the BCTF has had a close relationship with the NDP — we saw zero percent for increases in our salary year after year, for several numbers of years. It was very little as far as increases, and this was all at the time while the rest of Canada and North America was booming.
What have we seen as teachers? What did I see as a teacher? I saw my salary going up very significantly under the B.C. Liberals. It was depressing driving around during the '90s in the Interior and north Vancouver Island, where I used to live. You'd see for-sale signs all over the place. People were moving out.
We are for strengthening, improving small businesses. That's why we're bringing in the HST.
Under the NDP, the small business tax for most of the '90s was between 9 percent and 10 percent. Now what is it currently? It's 2.5 percent. It's going to zero — up to half a million dollars in earnings for small businesses. That's the lowest in Canada. So what does that mean? It means a business that is earning $100,000 will be saving up to $10,000 more — just on $100,000 — with us being in power as opposed to the NDP.
We are thoughtful and considerate of small businesses. We understand the importance to the economy of British Columbia. Over one million people are employed in small businesses. One-third of our economy is related to the small business sector. The HST is the most significant thing that we can do for small businesses, and for most businesses, it will mean significant addition to their bottom line.
Now, let's just talk for a moment about corporate taxes. Again, on the topic of taxation, we're talking about the HST and credibility. I hear this often about our corporate pals — that we're going to give a few tax breaks to our corporate pals. I want to talk about a few corporations here. It was 16.5 percent under the NDP. It's going down to 10 percent, the lowest in the country.
These corporations. Well, who invests in these corporations? It's not just a big, fat billionaire that owns all these corporations. A lot of it is owned by our funds — our pension funds, my teachers pension funds. We the people benefit when corporations do well. It helps us in our retirement.
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The B.C. Liberal tax policy is about jobs, a strong economy, and it's important. Why? It pays for our social services. Half of our taxation revenues are going into health care.
Now, just a few of the employers. The B.C. Agriculture Council, representing farmers. The B.C. Chamber of Commerce supports the HST. These are all the small businesses.
I can understand the NDP speaking against the HST — okay? It's the mood. Fear sells. Bad news sells. The people connect with this. And I can understand: "Well, this is something we can link to." But you know what? It's dishonest. It's dishonest, and I know that.
So who else? Other employers. The manufacturers and exporters, the mining industry…. We have mines. We have members on both sides that have mines in their ridings. Those mines are important for the economy.
Deputy Speaker: Members.
M. Dalton: They're important for here.
Deputy Speaker: Members.
I would appreciate private conversations happening outside the chamber.
M. Dalton: The Retail Council of Canada. Retail. What's that? That is stores. Go to a mall. There are lots of stores. Go down the streets. There are stores there, and the organization representing them is saying that this is a good thing for the retailers.
B.C. Trucking Association. We all have people who are truckers in our communities. This is important for their well-being, their financial well-being, for our communities.
The new car dealers. I have a number of car lots in our riding, and they employ a lot of people. I'm sure they are for this.
There's a list of forestry companies. They say this is good. It will save. It will bring investment to our communities. It will bring investments to all of our communities.
Motion pictures. Now, the motion picture industry is for this. That's important. I read something today in my local paper. It said this right here. Maple Ridge. A film company could be opening a major studio in Maple Ridge, and it is capitalizing on the Olympic Games — okay? — on the outreach program that both the government and municipalities had to businesses.
What they are saying is that what has attracted this film studio and the movie industry to increase investments here is the taxation rates. It says that visitors — talking about these business people — were all shown videos extolling the business advantages of Metro Vancouver as a powerhouse paradise. For instance, in 2012 Canada's overall corporate tax rate, including all provincial and federal taxes, was the lowest — 25 percent — compared to the U.S., which is 40 percent. And we're the lowest; we're going to be the lowest in Canada.
So this makes us very competitive. We've got a beautiful province. It's already attractive. And we are number-one-rated. We have the nature. When you have the tax structure to attract more businesses, we all benefit from that.
Railways, independent contractors, the media, technology, shellfish — and it goes on.
I was talking with the Ridge Meadows Chamber of Commerce, the executive director, Dean Barbour, yesterday. He said this. He told me that with the HST, the cost of business is going down. The HST allows for more investment, increased marketing, research and development, and improved technology. The end product means growth.
I talked to a fellow — Dirk. He's a manager at Fraser Valley Building Supplies in Mission — a big employer in my constituency. They bought a truck a couple of years ago, and they do this probably every couple of years or so. A $300,000 truck — $21,000 in savings. So significant savings on the bottom line, but you know what?
He told me that wasn't the big thing for them as far as the company. I was quite surprised when I saw the savings that they were achieving. He said that for him, the big thing is compliance. The compliance costs and the hassle of managing the PST were even a bigger factor for him and for that company — just all the compliance and all that. You know, the PST, when they get audited, it's a couple of times a year. If they make a mistake, it's averaged out throughout the year. Anyways, compliance issues are a big thing.
Companies are saving probably about $200 million, a little less than $200 million, in compliance charges a year in British Columbia. That's a saving. Also, provincially we're saving $30 million a year because we're not administrating the PST.
Another business owner — at Beckville, a cabinet manufacturing business in Maple Ridge — told Dean Barbour a few days ago that he estimates that at that smaller company, they save about 50 hours a year in savings just in the compliance.
There are a few misconceptions which I'd like to address. One, it's been portrayed as a tax grab. I know that the member for Alberni–Pacific Rim mentioned that, in fact, we are not coming ahead as far as sales tax revenues this year from this. This is not a tax grab. We're making less from it. It's a tax shift, and I want to go more into that. I know that's the point of contention, the opposition says,
[ Page 4312 ]
because they feel that it is just going to be shoved upon the consumer. Well, I don't believe that that's the case, and I'll explain a bit more of that.
The second misconception is that we're just slapping another 12 percent on top of everything, and that simply is not the case. We're not adding 12 percent. Most items already have PST: furniture, appliances, cars. Many things already have PST. Just look at when you purchase something. See if it says PST. So that — there's no change. It's called harmonized, harmony. You're adding 7 percent provincial sales tax to 5 percent GST, federal sales tax. We're putting them together, and that makes 12 percent. So there is no contention here as far as the rate, because we're not changing the rate.
The contention has been more the exemptions, and I'd like to talk a little bit about exemptions. I said that for the ones that already have PST, the rate will remain the same. There are many things where there will be no additional cost, because they have no GST — for example, basic groceries; residential rent; new homes up to $525,000; pre-owned homes, which are about 80 percent of housing sales; prescription drugs; health, medical, dental services; child care; music lessons; legal aid services; and most goods and services provided by charities.
Another misconception is that this is going to cost thousands of dollars more. This isn't true. One million British Columbians will receive more from this HST because of the rebates. We expect, according to Jack Mintz and other economists, tens of thousands of jobs. If you're someone that gets employed or has family that is employed with this, then you are making thousands of dollars.
Somebody that, let's say, is making $60,000 to $70,000 perhaps, would be paying $300 to $400 more. Royal Bank of Canada estimates that it will be a 0.07 percent inflation increase, which is less than 1 percent, one-time inflationary pressure, which is very marginal when we consider all the benefits that we will get from it.
Now, HST — I know it's been called certain things — is an acronym. But I'd like to call it an honest sales tax. Honest sales tax. Now, why do I say that? We'll give a little education here. I'd like the opposition just to put that in their repertoire, so we're going to sit back, and we're going to listen now. HST — honest sales tax. How could it be an honest sales tax? Well, let me explain this.
You know where the dishonesty is? The PST. The PST is not an honest sales tax. Why do I say that? Because there are cascading costs inside the PST. In other words, approximately one-third of PST revenue that the government receives is embedded costs. When businesses pay for a computer, when businesses pay for a vehicle, when businesses pay for a new stove in a restaurant, when they pay for anything, they pay the PST. They don't get a rebate on the provincial side of things. They get a rebate on the GST. They don't get a PST rebate. They add that….
That's their cost of doing business. They put it in and then they do a markup. So what ends up happening is that we think, the consumer thinks that they're only paying seven percent, when actually they could very well be paying 8 or 9 percent on things because of the embedded sales tax.
I just talked about where there already is PST. Now, what about the goods where it is already exempt? Well, you know what? Consumers are paying a tax on that. They're paying an embedded sales tax where there are already exemptions, where there's no GST, because it's embedded in the cost. So it's an honest sales tax.
So what will the NDP do? We've asked for solutions. We've asked what their position is. I've heard here: "We will vote against it." Well, that's fine. It's not a surprise, because they've voted against every budget bill and all tax cuts. So it would be nice to hear if they came clean on this. Will they repeal it? No. It's highly unlikely. But perhaps I'm giving them too much credit, remembering their record. If they did repeal it, what would they replace it with?
Every independent, reputable economist that I'm aware of supports this tax as being good for British Columbia, and that's economists on both the left side and the right side. There are sound economic principles that will benefit us all. A long list of independent economists say this is good for British Columbia.
It is good for British Columbia. That's why I'm prepared to stand for it, to vote for it, and I'm glad that we are introducing it. I know that we will all — all of us, the members on both sides — benefit from this, looking forward to the positive change that this is going to bring to our province.
R. Austin: It's a privilege to rise and take my place in this debate on Bill 9, the Consumption Tax Rebate and Transition Act or, as my colleague who just finished speaking said, the honest sales tax debate.
I'd like to begin by speaking to a few of the comments that I've heard here today. It's very interesting listening to the debate, not only here in the House but watching it down in my office over the last few days. While a whole variety of reasons have been made by government members as to why this is a good thing for British Columbia, my basic premise is that all of this debate shouldn't just be taking place in this House now.
These debates should have been taking place in communities right across British Columbia at election time last May, when all of this could have been canvassed openly in front of the people of this province. But that, of course, didn't happen.
Let me start off by going back to the analogy that the good member for Maple Ridge–Mission spoke about
[ Page 4313 ]
when he talked about the ship of government suddenly hitting a hurricane, hitting a storm. You know, there was a dramatic shift in the world economy. The day that the hurricane really hit…. I think historians will look and say that it was probably the fall of Lehman Brothers in September of 2008.
I don't think it's justifiable for any member of the government to get up here and say that between that tragedy in September 2008 — when the world economy was going into a massive recession and government revenues were falling all over the world — and May of 2009, this government didn't have the knowledge and the guts and the fortitude to say to British Columbians at election time several months later: "Hey, we're in deep trouble here. We've got to make some changes. We're hitting a hurricane. Here's what we're going to do. We're going to bring in a harmonized sales tax, and this is why we think it's good, and let's have that debate." But they didn't do that, and therefore we are having this debate now, a little bit too late.
But you know what, hon. Speaker? The people of British Columbia aren't so stupid. They understand what is going on here. They understand that government revenues fell. They know full well that there's a large bureaucracy that probably tracks government revenues — if not on a daily basis, certainly on a weekly basis — and they know that the government of the day, the B.C. Liberals, would have been fully aware of the financial situation when they went into the election last May.
The only reason why we're having this debate now and not then is because the government didn't have the courage to bring all of these arguments, all of this debate out into the open and have it during the election time. Instead they were double-crossed.
I'd also like to mention and refer to the last member who spoke who talked about the Finance Committee. He brought up the fact that in the Finance Committee, submissions would be made on an ongoing basis suggesting that bringing in this honest sales tax was a good thing.
Well, I sat on the Finance Committee the year before the election and, true enough, the accountants came, as they always have done. I've looked into this historically. There have been certain professions like the certified management accountants that have come year after year. Indeed, they came during the 1990s when the NDP were in power and said: "This is what we want you to do."
They came back for the first eight years when the B.C. Liberals were governing this province, and said: "This is what we'd like you to do." Guess what. For eight continual years the B.C. Liberals said no to harmonizing the sales tax. No.
In fact, the former Finance Minister, Carole Taylor, said: "Not on my watch." No way would she harmonize the sales tax. Why? Why would she not do that? I think she's a fairly bright individual. Most people recognize her in this province as being a very bright person. So why did she say that this was not a good thing?
The reason why she said it wasn't a good thing was because it would be harmful to consumers of British Columbia. That's the reason why. So why do we have an about-face change only a few months later? Simple reason. You couldn't get elected by pushing their arguments. Therefore, let's keep quiet about it. Let's pretend everything's fine. Let's not mention the hurricane right now. We'll get through the election, and then we can tell the people of British Columbia that this is what we're going to do. We're going to take a tax shift and give $1.9 billion…. Take it away from corporations and give it to you, the poor schmucks who just voted us in. You can now pay that tax.
The Minister of Tourism the other day was mentioning about the fact that Ontario had brought in the HST and, therefore, we had no choice but to do this. The HST was suggested in Ontario months before the election. Again, why would the government not say: "Oh, look what Ontario's doing. They're a big economy"? Why did they not bring that argument up before?
In spite of that, in spite of Ontario doing this, many other provinces have said no. I don't think that the people who live in Saskatchewan or Manitoba are sitting there quaking in their boots worrying about whether investment is not going to flow. In fact, the last time I looked at the Saskatchewan economy, it's doing very well. So is Manitoba. But they've said no to the HST. Why? Because they also recognize that this is a harmful tax for ordinary people, for consumers.
The hon. member who just spoke mentioned that really, you know, this isn't such a bad thing. After all, the PST and the GST added up to 12 percent. So what's the big deal? It was 12 percent.
But here's the thing, and I'm going to start with this list. What he fails to mention is that the 12 percent now is applied to a whole raft of things that were not under the PST, and that's what this argument is about. If British Columbians had realized that this whole raft of items that wasn't taxable under the PST was now suddenly going to be taxed, they would have started to ask some questions. And once they'd started to ask some questions, they would have said to the government of the day: "We don't want this tax."
Quite frankly, that's why we on this side are standing here, on the side of the people of British Columbia. The member said: "Well, the HST is basically the same as the old GST and PST." But let's talk about some of the things that weren't taxable under the PST, which are now going to be taxable.
Of course, the big one is restaurant meals and catered foods. I'm going to speak more about this later, having spent approximately 20 years in the hotel restaurant industry. I have a lot to say about how this is going to damage my old industry.
[ Page 4314 ]
[Mr. Speaker in the chair.]
It's going to be added on to many groceries, such as snack foods — not groceries you buy to make food at home but certainly the snack foods. It's going to be on school supplies.
It's going to be added to taxi fares. Every time I take a cab in the Lower Mainland, I hear these stories from cab drivers who are already suffering and worrying about their economic well-being. I mean, changes have happened in Vancouver recently. We've got the new Canada Line. This has taken, in my understanding, speaking of taxi drivers, around 25 percent of their revenue. On top of that now, they're going to have to face the HST.
It's going to be added onto recreational services like live theatre and movie tickets. It's going to be added onto accounting services, tax preparation, mutual fund management fees. Think of this: we're trying to encourage people to put money aside for their retirement. They already have to pay fees for those people who manage their mutual funds, and on top of that now it's going to be the HST on those fees. How does that help us to encourage people to set aside money?
We're going to see it on veterinary care. Last week I was speaking with a constituent of mine who lives on a very modest income, whose dog had a tragedy. It cost her $600 to take the dog to the vet and to have the dog fixed up. Imagine another 7 percent added on top of that.
It's going to be added onto classes for yoga, dancing and martial arts, on membership fees for clubs and gyms and fees for sports teams. Surely in this day and age we should be encouraging people to go out and stay healthy. It's going to be added onto facilities and ice rinks at a time when we want to encourage children to go out and do more sports.
Noting the time, I would like to reserve my right to continue in this debate at the next sitting and move adjournment of the debate.
R. Austin moved adjournment of debate.
Committee of Supply (Section A), having reported progress, was granted leave to sit again.
Hon. B. Penner moved adjournment of the House.
Mr. Speaker: This House stands adjourned until 10 a.m. tomorrow morning.
The House adjourned at 6:54 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF HOUSING
AND SOCIAL DEVELOPMENT
The House in Committee of Supply (Section A); H. Bloy in the chair.
The committee met at 2:36 p.m.
On Vote 39: ministry operations, $2,719,996,000 (continued).
The Chair: Good afternoon, everybody, and welcome to the Douglas Fir Room. We're doing the budget estimates on the Ministry of Housing and Social Development.
S. Simpson: Thank you to the minister and his staff, who are around liquor today, for the moment. We'll do that, liquor for a bit, and then move on.
I'd like to start just with some questions that relate back to the Olympics. I'd like to know whether the Liquor Distribution Branch had purchased or received tickets related to the Olympics.
Hon. R. Coleman: First, I'll introduce, on my right, Karen Ayers, who is the general manager of liquor control and licensing branch; and Jay Chambers, who is the CEO of the Liquor Distribution Branch.
No, they did not.
S. Simpson: Could the minister tell us how many public stores we have currently in British Columbia? Maybe he could just separate them out. I know there is what are called the signature stores. How many signature stores, the other stores and then outlets that the province and the Liquor Distribution Branch use? Not private stores necessarily, but are there other outlets they use where they don't have a public store?
Hon. R. Coleman: Maybe the best would be to just give you all the numbers at once. There are 197 government liquor stores today. There are 670 licensee retail stores, which we call LRSs, which are the private liquor stores. There are 224 rural agency stores. There are 214 on-site manufacturer stores, and those would mainly be related to on-site winery stores; 20 off-site manufacturer stores; one tourist wine store; 20 VQA wine stores; 12 independent wine stores; and 11 duty-free stores. There are presently, out of the 197 government liquor stores, 21 signature stores.
[ Page 4315 ]
S. Simpson: Has that number changed? Maybe we could just get a sense of what the number has looked like in the last couple years. Has that number changed, particularly around the government stores?
Hon. R. Coleman: I'll tell you what. How about we go back five years. Does that work? So 2005-2006, there were 208 government liquor stores; 2006-2007, 201; 2007-2008, 199; 2008-2009, 197; 2009-2010, 197; and 197 today.
S. Simpson: The stores that are there…. I know that there was some discussion at some point. I know that there's been a freeze — I believe it's a freeze or moratorium or whatever the terminology is — put on the closure of stores, government stores. I think I heard something about the formula being if a signature store is opening, then a regular store can close, or something to that effect. Could the minister maybe explain kind of what that policy is around maintaining stores?
Hon. R. Coleman: Yeah, I can. In the last collective agreement we were allowed to close five liquor stores — in the collective agreement as agreed with the B.C. Government Employees Union. If we create a signature store, we're allowed to go two for one. So we can close two government stores to create one signature store.
S. Simpson: I think it may make sense as a policy, but I believe the government has been moving to the notion of signature stores, where it makes sense in the broader range of services. Is that where the government is in terms of the strategy or the plan of the LDB — to increasingly move to the signature stores' broader selection, those kinds of things?
Hon. R. Coleman: Just for the member's information, there's a new collective agreement, but it hasn't been ratified, which has a different store number closure and some other calculations. I guess we can't talk about that until the union actually deals with it.
There are no plans right now for any new signature stores. We have a signature store in every major community, with the exception of New Westminster and Nanaimo. In those two communities we have not found a location yet. We're not averse to it, but a location would have to make sense to the LDB before we'd move into something in those communities.
S. Simpson: The minister went back and provided numbers for government stores from '05 through, showing the number of stores. Does the minister have those same numbers for the private stores? I think it was 670 private stores. Does the minister have those numbers for those years?
Hon. R. Coleman: Yeah, and I'll go back to the same five-year period, because it probably works the best. In '05-06 there were 592; '06-07, 631; '07-08, 654; '08-09, 674; and '09-10, 669.
S. Simpson: I'm curious. It looks like the numbers have stayed pretty close over the last few years. Could the minister tell us: is that because there haven't been additional applications to grow the number, or has it been a policy decision of government to hold the number of stores?
Hon. R. Coleman: When this file changed in 2002, there was a moratorium put on any new LRSs, and that moratorium is still in place today. What happened from 2002, when the policy changed on how licensed retail stores could separate from their location and find a proper retail place to be in, was there was work done on all the stores or licences that existed. Some fell off and didn't get built. They had certain times to accomplish that. There's a moratorium on now for no new stores.
S. Simpson: One of the things I've noticed when I look at some of the private stores now…. It's not that there are more of them. Maybe it's similar in some ways to the casinos that used to be sort of smaller operations. Increasingly, you're getting the River Rocks or the Villas and these bigger, larger casinos that drive greater amounts of revenue because they have a number of revenue streams within them.
Is that the situation with the private stores? Are you finding that? I'm noticing with the private stores that some of them are getting bigger. They're providing a more full range of services in terms of the kinds of product they're selling, a wider variety and, presumably, a greater volume of sales. Are we finding that the level of sales in the private stores has climbed significantly over the last few years?
Hon. R. Coleman: I think the evolution of the market took place for some of these folks. They found a better location, chose to invest in better, brighter lighting or some better stores. Some have done well by doing that; others, not so well. I think that there are some stores that still lead me to think that they could improve, you know, for their customer.
Certainly there has been an improvement, I think, in the private sector — in their stores and the quality of inventory and those sorts of things — over the last number of years. Their sales, actually, haven't gone dramatically up over the last five years. Their market share goes anywhere between 36 percent to 40 percent over that period of time, and that's been pretty standard for a number of years.
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S. Simpson: If the minister could just maybe get a copy of those revenue numbers at some point in the next few days, that would be great, if that's not a problem.
In terms of services…. We talked about this, I think, a little bit last year — the minister and I — but I'll inquire again, because every year brings new thinking to what government is going to do. Is there any thinking with the LDB around beginning to engage in some of those services?
I'm thinking particularly of increasing hours. I know there's been talk about the idea of Sunday openings. I know that some stores, a limited number of stores, I believe, do have Sunday openings, but it certainly is not the norm. Sunday openings for stores, and also things like the provision of chilled product. Is there any thinking within the LDB about changes in terms of the types of product or the way product is provided or the convenience — i.e., hours? Is any of that discussion ongoing?
Hon. R. Coleman: As we've sort of built this system over the last number of years, one of the things we tried to concentrate on was…. We knew that there were, sort of, two tiers of operation. One is the convenience store side of liquor, which is covered by the private sector stores and, then, our larger stores, which are more like the supermarket side, so I guess you could classify one as a supermarket side of liquor and the other one as being the 7-Eleven side of liquor.
The 7-Eleven side of liquor provides the convenience and after hours and stuff. I like the fact that most of our folks don't have to work on Sundays. There's not a big push to open on Sundays. We do open Sunday where we think that it's appropriate for the volume of the store. We don't open just for the sake of it.
On the cold product, we haven't actually found, in the stores that we've tried it in, that it's driven a difference in revenue. In actual fact, in our 41st and Cambie store we took it out, because we got better revenues when we didn't have that in the store. It gave us better opportunities for display of our product and those sorts of things.
So there are always discussions with regards to our services and hours and those sorts of things that we try and have and balance off with our collective agreement and the union as we work with them.
S. Simpson: I'll put on a little bit of my Vancouver-Hastings MLA hat for the next questions, which relate to the 2800 block of East Hastings. The minister will know that there had been a longstanding store there. The lease had expired. The owner of the building, as I understand it, who had the lease, chose to not renew it. They also happened to be the owner of some private liquor stores. Government store moves out; private liquor store moves in.
Those instances, I understand, are the only times you'll find that kind of closure and replacement with a public versus a private store. That's the agreement, and that's fine. But I know at that time, there was continued discussion about a government store reopening in that vicinity.
I know, in discussions I had with the branch, that every indication was that that store was a positive revenue generator for the LDB. It was a store that they had not desired to lose, necessarily, in terms of the location. There was talk, with some of the new construction that's going on on Hastings Street, about the potential for a location there.
Could the minister tell us…? I believe that it was going to be last May that there was going to be a decision, or last Easter. Somebody told me it would be before Easter — not of this year, of last year. So maybe the minister could tell us what the state with that is.
Hon. R. Coleman: I think last year at this time we had actually thought we might have a location. We're continuing to look for a location in that neighbourhood. We've been unsuccessful in finding the appropriate location and lease to actually put a government liquor store back in that neighbourhood. We're going to continue to do that.
The anomaly the member describes actually only exists in Vancouver. The people that bought the premises, when they bought the premises and then didn't renew the lease with the LDB, were able to put a private liquor store in there because Vancouver allows that to happen. It's an anomaly, again, that Vancouver created within its own bylaws — that that could happen.
We would have probably been happy to renew in that location, but the people that owned it wanted their own retail outlet, and that's why they had made the business decision to buy the building in the first place, I suspect.
We're continuing to look, and when we find a location that makes sense, we would probably move back into that neighbourhood.
S. Simpson: I would certainly encourage the branch to continue to look vigorously. I certainly know that I continue to hear on a very regular basis from members of the community who, if they had their preference, would prefer to patronize a government store for any number of reasons, whether it be cost or variety of selection or just simply the choice to do that. So I certainly would encourage the branch to continue to look, because I think that there is a market there that it would recapture very quickly from that private store.
I know that in that instance the private store encouraged, among others, the business improvement association to be opposed to a government liquor store
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coming back, and interestingly, the business improvement association declined to do that and made it very clear that they were certainly not unhappy with the government store. They felt that it was a very good neighbour, and they were not prepared to do that, because….
As the minister would imagine, now that the private store is there, they don't have much enthusiasm for the idea of a government store coming back to the neighbourhood. That would be of no surprise to anybody, I'm sure.
In terms of the revenue stream that comes through liquor sales, could the minister just explain a little bit so that I better understand this…? We know that we have the markup price that is collected in government stores. So the government store buys product, marks it up by whatever that amount is, and that's our revenue stream out of the government stores. Then there's the markup, the price, for a private store that purchases product, and then there's a markup on top of that that the government puts on to take its share — tax, whatever we'll call it, for lack of a better term.
Could the minister tell us: what is that pricing structure for where a government store prices product, a private store prices product, and what piece comes to general revenues from those two sources?
Hon. R. Coleman: We get it everywhere. All the way down the food chain, we make money. We actually make a fair amount of money, as you probably know.
The LDB actually sets the retail price. The liquor distribution branch sets the retail price for the floor price of liquor across British Columbia. So a case of beer of a particular brand is the same price in each community, wherever it is, because we have this…. I forget what the term is. Is it postage-stamp pricing, I think we call it? We have a term for it anyway.
Then what happens is that in our stores there's a markup component that's done by category, which is very complicated, and I don't have, probably, the time to go through what that is. But each store runs on a gross profit. Our gross profit is based on…. The sales less the operating costs become the gross profit. But their pricing is based on a category price that is established at the LDB.
In the private retail stores they get a 16 percent discount to the retail price that is set, which is what's set in the liquor stores. The private wine stores get a 30 percent discount on the wine that they sell, and then the rural agency stores get a 10 percent discount.
S. Simpson: What happens with the vineyards and the wineries that have their own outlets and sell product either out of their own outlets or out of dedicated stores that they own themselves elsewhere? How does their pricing get set?
Hon. R. Coleman: This gets even more complicated. There are about 20 what we call VQA stores in B.C., but they actually have a name that is a bit different than that, and that would be…. I think that we call them independent wine stores or winery agency stores. Anyway, what it is, is there are basically 20 licences that are held by, I think, the B.C. Wine Institute. They're off-site industry stores. Those stores get the ability to sell. They get a discount, but they get to sell their wine — VQA wine only, which is 100 percent B.C. grapes.
The B.C. wineries get to have a store at the winery. They don't get a second store off the winery. It's a farm-gate store, so they can sell wine from that store. Any VQA wine that they sell from that store is sold tax-free. They're markup-free, so they don't pay us tax or markup, because that was one of the things to build the wine industry — to make sure that 100 percent B.C. grapes, under the VQA label through the B.C. Wine Institute which is established today, gets that.
They also get to do what we call direct delivery, so they don't send it to the liquor distribution branch. They can do direct delivery without markup — markup-free, without having to pay us — to restaurants and bars within British Columbia.
They can do that only with what is referred to as VQA wine, which has to be wine that's 100 percent B.C. grapes. The grapes are grown in British Columbia, and the wine is made in British Columbia. It's part of the agritourism model that was built around the wine industry many years ago.
S. Simpson: The saving, then…. The minister went through a bunch of numbers — complicated, as he pointed out in the previous answer. "The government takes it everywhere," I think he said.
On a VQA wine, a Mission Hill VQA wine that they're selling — either direct into a downtown Victoria or downtown Vancouver restaurant or out of their shop right out of the Okanagan at the vineyard — what's the difference in terms of that price? In terms of percentage, not dollars — because every bottle of wine is different — what would be the percentage difference, in terms of the markup they don't face there, versus a different type of wine?
Hon. R. Coleman: There's just one clarification that I need to make because, as I was away from this file for a few years, I thought we'd solved one problem with regards to 100 percent B.C. grape wine, and that was that it all had to be VQA.
Evidently, we still allow a winery that isn't a member of the VQA, that doesn't have the VQA label — as long as it's 100 percent grape — to also get the same benefit of being markup-free. Basically, what it means is that if a Mission Hill or a Hester Creek or whatever
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winery in the Okanagan or elsewhere has a wine that's 100 percent B.C. grape, most of it is VQA. If they send it out, it's sent out markup-free, so they get to keep the markup that the LDB would normally take if the wine came through their system.
If the wine goes to the LDB — a lot of the larger wineries' wine does go through the LDB because we have a very good sales package for B.C. wines, they're very well promoted in our liquor stores, and frankly, a lot of the smaller places can't do the volume that would be necessary for the larger wineries — then they pay the normal markup like everybody else.
S. Simpson: That's great; I understand that. And I understand that it's not the VQA label that makes it work. It's the confirmation that it's 100 percent B.C. grapes, essentially, that is important.
Could the minister tell us the markup? When he was rolling out those numbers before, the number went past me. What would that saving be on a typical bottle of wine, in percentage terms, with those markups that, presumably, the vineyard gets to keep?
Hon. R. Coleman: Our markup is 117 percent. If somebody was selling…. We don't have a calculator, but let's even say it was 100 percent. It would mean that if a bottle of wine sold for $20 in the store, the markup was probably $10, which would mean that they get to keep that $10 plus the $10 which was their cost.
S. Simpson: I've recently…. I'm sure the minister has had these conversations as well. We know that the growth and the success of the B.C. wine industry has been predicated on a number of things — first of all, the VQA, the bringing in of VQA. What that did to just raise the standard and the profile was, I think, a bit of a master stroke. It really was the key to building an industry that is world-class, no matter how you look at it.
Certainly, I would imagine, in terms of some of the smaller estate wineries and the vineyards that aren't the Mission Hills, this creates a real opportunity for them, particularly as they can direct-sell to restaurants, where a lot of their product goes, as well as in shops. It's really built an industry that is not only the big players, but we have such a fabulous collection of smaller estate wineries that make great wine and that are able to make a living out of it — not get rich but make a living out of it.
We have now started to see just the beginning steps of a distillery industry, and I think probably the most prominent example, or one of them, might be here with Victoria Gin in Victoria. I know that I've had some discussions with folks in that industry as they begin to try to develop an industry. They've looked at what this kind of an opportunity has meant for wine, to be able to generate revenues.
Could the minister tell us: what's the thinking about the support for the growth of an industry like the distillery industry for companies — like the Victoria Gins — that are trying to break into larger markets and could use a little help as government has helped the wine industry over the years?
Hon. R. Coleman: I don't want to say anything that would jeopardize any future trade deals. The reality is that the VQA and the direct delivery were in place pre a number of trade deals that exist, and that's why they've been allowed to continue under those, and the same thing with some of the stores that we were allowed to have as appointment stores during that situation.
What we do with our distilleries, which have a different relationship because they don't have direct delivery…. We are working on some of the delivery issues they've asked us to, but we cannot move at this time to the same type of arrangement for a number of reasons.
Basically, British Columbia distilleries are allowed to sell their product directly to the public from the distillery site. They may also deliver products to the public that are ordered by phone or on the Internet.
The LDB's commission paid to the distillery for sales to the public was recently increased from 10 percent to 30 percent. So they get a commission for selling it, rather than coming through our system, and it's actually consistent with the policy of the other provinces in Canada. The government is not considering any changes to the existing distillery policy at this time.
S. Simpson: I believe, and I heard the minister…. So what they've done is they've got a bit of a greater break. I think he said it went from a 10 percent to a 30 percent rebate of the markup that goes back. If I make a gin or whatever and I sell it out of my shop at my distillery — the little shop I have — for 30 bucks, I get my 30 percent back, whatever that is, on top of that which would normally go through the LDB to the government revenues. That would be correct?
How many…? Just to get a sense of this industry — I know it's small, but I think it's starting to come along — what are we talking about in terms of an industry in British Columbia around distilled alcohols?
Hon. R. Coleman: There are ten small distilleries licensed in the province today, with a further four in the approval stages. A number of these distilleries want changes to the Liquor Distribution Branch and pricing policies similar to the wine industry, as you've said. I think that I've already articulated the differences, because distilled products are treated differently, even between provinces and also with regards to international relations.
Basically, that would be the number that we have. There are no provinces in Canada that allow distiller-
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ies to sell their products directly to bars, restaurants or private liquor stores, except for the Yukon, and no provinces have preferential policies for small versus large distilleries.
S. Simpson: I think we're going to move to housing. Thank you, to your staff.
Hon. R. Coleman: Just before we leave, I want to thank the general manager for coming. We didn't get into liquor control and licensing issues, but I do want to say that, you know, we just came through the Olympics.
Karen's staff and team at the control and licensing branch actually handled what really was thousands of extra seats of licences going into the Olympics, had to manage different changes to the liquor rules so that we could actually host the world. They did a remarkable job on behalf of British Columbians, both on the inspection and on the licensing and the work that was going into working with consulates from around the world, as well as large suppliers — people like Heineken House and those types of folks who wanted to do it.
They were also the ones that…. Well, actually they are not ones — the one. The general manager is the person who makes the decision as to when liquor stores close early. Unbeknownst to what the media might say — that it's a police decision — it's actually the decision made by the liquor control and licensing branch general manager, who has the statutory authority.
Karen was the one that made the decision to actually close the stores early, after talking to inspectors and law enforcement and the security people at the Olympics and made the statutory decision that actually changed a couple nights of how the celebration went in Vancouver.
I think that they did a remarkable job, and it would be remiss of me to not mention that and put it on the record in estimates today, hon. Chair.
S. Simpson: If I thought that there had been any mess-ups, we would have had questions, but there weren't any to talk about.
I would agree with the minister. I think the licensing control and that, particularly during the Olympic period when there was so much greater demand on their services and things could easily have gone sideways because of the nature of an event like that, was handled extremely well. It was a good job. There's no question about that. I'm sure that we'll all be watching as the Canucks advance through the playoffs to see what unfolds there.
Hon. R. Coleman: I have Sharon Moysey and Molly Harrington rejoining us — and I won't introduce their titles — and, of course, my deputy minister, Cairine MacDonald. And, of course, the president and CEO of B.C. Housing, Shayne Ramsay, has now also joined us.
S. Simpson: So that the minister knows, I've got a couple hours of questions, and then I expect members to be coming in after that, probably after five o'clock — members who have housing-related questions. They'll be putting those forward, and we'll see how long that runs as we get to seven o'clock. We'll have a similar situation tomorrow around grants in the afternoon.
I'll ask this question just to, I expect, get it out of the way. Did B.C. Housing in fact purchase or receive any Olympic tickets?
Hon. R. Coleman: No, they didn't.
S. Simpson: I'll go right to the service plan for B.C. Housing. I go back to page 35, the "Summary Financial Outlook." It's interesting. As I look across the years, of course, for the 2010-2011 forecast, we have what is quite a dramatic increase in the budget. It goes from $623 million up to $884 million and then drops back down the next year to $622 million. So it pops up for about $250-odd million of additional money. Could the minister explain that?
Hon. R. Coleman: Further down on the same note in the service plan it details this. "In 2010-11, B.C. Housing's…budget will increase to over $800 million, a 44 percent increase from the '09-10 current forecast." The budget highlights are these. The first one is that capital funding to increase the supply of housing for those at risk of homelessness under the memorandum of understanding with municipalities and VANOC will add $125.5 million of provincial funding and $20.2 million of federal funding to the budget.
Capital funding for infrastructure projects to increase the supply of provincially owned housing for seniors and persons with disability will add $59.6 million of provincial funding and $59.6 million of federal funding. That's for the seniors initiative that we have, and we're happy to explain all that to the member.
Capital funding to renovate and modernize aging publicly owned stock will add $30.3 million of provincial funding and $54 million of federal funding. And then a full year of funding booked into this year with the women's transition house and supports program will add $15.9 million, and a completion of funding on HEAT shelters results in a reduction of $2 million.
So basically, almost all of it is capital. As we continue to build, we are building projects across British Columbia for the homeless, mental health and addictions side and also for seniors. And then we're also doing a bunch of renovations on product that's getting old. Because the federal government has a matching program, we're doing some renovations of that stock.
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The Chair: If I could remind the gallery that there's no communications with members here. Any communications are to take place out in the hallway.
S. Simpson: Well, could the minister explain a little bit more the memorandum of understanding with municipalities and VANOC? What did that mean? Who put money where to get to that $125 million? Where did that money come from?
Hon. R. Coleman: What we've started doing a few years ago was working with municipalities who provided land — forgiveness of development cost charges, in some cases zoning relaxations, that sort of thing — to build housing in their communities if they came to us with MOUs. So we have MOUs in places like Victoria, Nanaimo, Vancouver, also in Surrey, Abbotsford, Chilliwack, up through the Okanagan Valley into Kelowna and also up through Prince George.
Those are all projects that have come through various levels of zoning to building permit and tendering. All of this is our money going into actually building those buildings on those lands. The VANOC piece is…. The member may or may not be aware that the village at Whistler was actually a modular unit for a large piece, because Whistler didn't want to keep the housing in Whistler for employee housing for the future employees in the city.
What we did is that we made a deal with VANOC to get that product at a substantial discount that they absorbed within the cost of the Olympics. Then we are moving it to a number of communities across B.C. which will become supportive housing — well, for basically homelessness, mental health addictions and, in some cases, seniors. That product is going to places like Enderby and Armstrong and Chetwynd. It's being moved now — and, actually, to Sechelt. I was there doing the groundbreaking on the weekend for some of these units that are going to Sechelt for the same use.
That's all our capital money to make sure all those things get built.
S. Simpson: Then the $125 million of additional dollars are all provincial dollars? The minister is nodding in the affirmative, so we'll just leave that at that.
The capital funding then. As we look down, it talks about what is largely renovation and upgrading money. Some of that is the federal stimulus money. Could the minister tell us again: how much of that falls into that category? What's the timing? Or how is that going to be spent? Is that going to be spent primarily on B.C. Housing projects? Or is any of it going to be made available to co-ops and non-profits that are held or owned by agencies?
Hon. R. Coleman: Just for the member's information, this is $177 million over two years. It's in a relationship with the federal government, and the breakdown is on page 35, for this year. The total projected commitment would be $13 million as being spent on single-room-occupancy hotels. And $140 million is being spent on directly managed stock that's owned by B.C. Housing that we acquired from CMHC some time ago. That is some of our oldest stock and requires most of the upgrades. Then $24 million is going to non-profit groups to do their building.
So it's a total of 20 SROs, 52 directly managed buildings and 29 non-profit buildings for a total of 101 buildings. We don't do co-ops. The federal government is doing something separate for co-ops that we are not involved in.
S. Simpson: The other piece of this, as I read it, is that capital funding for infrastructure projects to increase the supply of provincially owned housing for seniors and persons with disabilities adds about $119 million. That, roughly, I think is the number there. Could the minister tell us what it's expected that will build?
Hon. R. Coleman: This is a remarkably successful project, and we're very proud of it. Of course, because it's not centred in the major centres for media, it doesn't get the same sort of hit that it would be for others. We identified across B.C. one of the things we really wanted to accomplish, which was to provide some seniors housing where people could age in place in smaller communities across British Columbia. It's something that kept coming to me as a minister, since I became the minister in 2005, at UBCM.
There were a couple of challenges with it. One of the first challenges was: how do you get your numbers to work so that they can carry themselves as an affordable rental? The second thing was: how do you get product into some communities where there may not be the trades available to actually build the quality of housing, the type of housing that you need, because this might be a project that's in a small community of a fourplex or an eight-plex or a 12-plex, but really you can't find the trades to manage it in the same way.
So we did a dual-project call on this. What we did, basically, is we decided that we would go to the modular industry for some of it and also to the stick-built industry for the other, depending on which was more economical. We initially thought that with our matching dollars from the federal government, we could do about a thousand units of seniors housing across B.C.
By the time our numbers came in and all the work we'd done with the non-profit lands that were available, where we could actually put product in some communities — municipalities that put up land or gave us deals on opportunities to put them in their communities —
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we're actually doing 1,305 units instead of 1,000. We're delivering these starting now. Some of them are already under construction, and some of them are being delivered as we go through the next number of months, because they're being built in factories.
They are a remarkable product. I would defy anybody, once they are in place, to tell me whether it was built in a factory or built on site because it's all architecturally designed.
It's going to do a number of things. First of all, it's going to bring us a really nice affordable unit for seniors in small communities like McBride and Valemount and Chetwynd and Fort St. James and places like that across B.C.
In addition to that, it's also going to show people what modular can do as far as modular construction of housing. I don't know if the member knows that we have three pretty substantial manufacturers of modular housing in British Columbia that do very good work. They're basically known for what we call manufactured home parks, but for a long time they've been building some pretty creative stuff, including the PNE prize home, which for probably the last decade or more has actually been a modular structure.
We're very pleased — I'm particularly very pleased — with how this one is turning out and the work that's getting done. It includes the stuff that we're doing in other communities. That, coupled with the VANOC stuff that's modular, is going to change the landscape with regards to how we can deliver certain types of housing — and buildings, probably — in the future in B.C.
People will know that there's more than one alternative to how we build things. At the same time, we are meeting a need that small communities have continued to identify to me, as a minister, since 2005. It was one of the objectives to try and get to the opportunity. When the federal government asked us about matching funds for seniors and we told them what we'd like to accomplish, they got pretty excited about it and matched up the funds with us.
S. Simpson: The $250 million or $260 million that seems to kind of appear in this one year of the budget after fairly consistent numbers heading up to it, and then the numbers drop back down afterwards…. Out of that $260 million or roughly what that is…. If I do the math, I see about $115 million of federal money from a couple of programs here. Then, would all the rest of the dollars be provincial dollars?
Hon. R. Coleman: Over the next two years we're going to spend about $600 million in construction of housing for, basically, the seniors and their renos for the affordable…. The lion's share goes to the MOUs for homelessness, mental health and addiction. Out of that, $180 million will be federal, and the other $420 million is provincial.
S. Simpson: This money, this additional sum of money that has come into this particular year's budget…. Having it all put in this year, is it, then, the intention that all of that money will be committed this year either to construction or to retrofit or renovation? Will it all be committed in this fiscal year?
Hon. R. Coleman: Yes, that's correct. We have basically been doing these projects, getting them committed, and this money is actually committed to projects.
[D. Horne in the chair.]
S. Simpson: That being the case, then how many new units, in total, does the minister anticipate or expect to be getting on line — obviously, not to get built this year completely — this year somewhere in the process of either starting construction or in the soft-cost process, the development process? How much stuff is he expecting to have starting to happen this year?
Hon. R. Coleman: There's so much stuff going on. There's some stuff that's almost complete, some stuff that's about to go in the ground. There's some stuff that's actually…. You mentioned soft cost. There's a bunch of other projects already in the planning stage in addition to these. But this year 2,371 units are either in the ground, completed, or will be in the ground this year.
S. Simpson: Those units — we'll come back to those. Maybe I'll put this question. I don't want to eat up the time with a long list, but would it be possible for the minister or B.C. Housing to provide a list of those projects that are expected to come out of those 2,371 units that are on line for those units?
Hon. R. Coleman: That's really not a problem. We have them. We will provide that to the member opposite. You'll get a list. There are actually 45 properties that were bought by us for the homelessness initiative, including 23 SROs in Vancouver. Then there's the construction that has been going on in Vancouver and other communities across B.C. for new product, which has been going on for a few years now, plus the stuff that's in the pipeline, plus the stuff that's under construction.
We'll give you a list, and if there are any other questions around the list, we're happy to provide that for you because we have all those. We can tell you by community, etc. We actually have community scans where we have the ability with any member of the House that asks the question to tell them how many units of social housing, how many seniors in SAFER, how many
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in RAP, what the annual subsidy by community is, what the capital cost by community is. So when they ask, we have the ability to provide that information to all of them as well.
S. Simpson: I appreciate that. What I might do, if it's fine with the minister, is get one of my research staff to contact somebody at B.C. Housing or in the minister's office and maybe make an arrangement to get that information. I'd be particularly happy to just get the list of developments, but our research folks, I'm sure, might want more information than I do on the face of it.
We see — just to get a sense of this…. In 2011-12 the numbers drop back down to $622 million more or less, comparable pretty much to what the '09-10 numbers were after this year. They come back down. Then they drop actually a fair amount — about another 12 or 13 percent on that in the following year, to about $550 million. Could the minister tell us what his expectations are for those two years as it levels off and then goes down and drops a little bit more than that in the following year?
Hon. R. Coleman: This budget reflects the bubble coming through, with the federal stuff, the seniors stuff, the renovations and also the stuff….
As it drops back, there's still capital money in there for other projects that we anticipate coming forward. Then as we get another program or we see other opportunities, then we go back to the capital side of government, which is a separate sort of submission we make every year in the budget process, which we go through this fall. We would come in and identify what's next for Housing with regards to capital.
Then, of course, there are a number of projects we will do where we'll do them in a partnership with a non-profit, where we're actually more on the operating-fund side than the capital, because the capital side will be mortgaged through them. We'll actually support the project, which changes how it's accounted for, but those projects will go ahead as well.
S. Simpson: Coming back just for moment to the issue of renovation or retrofit, I believe that the minister said about $24 million of that pot of money would go to non-profits who had properties.
Could the minister tell us: has that money been allocated to a series of non-profits, or how is that money to be allocated? How do those groups come forward and ask for the money?
Hon. R. Coleman: Because we work closely with non-profits and there were timelines attached to the money relative to the federal stimulus dollars, we had a priority list already developed with regards to our non-profits. So we went to that priority list and worked with the non-profits that were on the priority list that were in the highest of need for renovation.
S. Simpson: You know, I can think of a number of groups that may well have been on that list. Was there a system? I'm sure that there were groups that maybe felt that they had buildings that should have been provided some support and didn't make the cut of the $24 million. Were there buildings that had come looking for money or had inquired about support for this and they didn't make the government list or the dollars ran out before it got to those projects?
Hon. R. Coleman: Every year we have a number of millions of dollars, base dollars, that we allocate for what we would call modernization, upgrades or whatever for the stock in our relationship with non-profits.
This was because it was actually a job stimulus project and came in as a…. That's in addition to what we would normally do. So we were able to accelerate some of the stuff we would do, which would actually help us in the outgoing areas with some of the folks, the non-profits, with regards to being able to help them with their upgrades and on a renovation.
We spend about $100 million a year in both non-profits and our direct-managed projects in renovations on an annual basis, on the upgrades as we keep doing them and working on our stock over time.
S. Simpson: I'll move a little bit from that. We're going to come back and talk a little bit about some of that, particularly with the direct buildings.
The minister said that the government now had bought 23 SROs in the Vancouver area. I believe it's what the minister said, or he can correct me. Could the minister tell us: how many units are there in the SRO component or portfolio that the government owns?
Hon. R. Coleman: We've acquired 26 single-room-occupancy hotels in Vancouver, New Westminster and Victoria, totalling approximately 1,550 rooms, at a cost of $92 million. We also preserved additional affordable housing stock with purchases of buildings in Kamloops, Burnaby, Victoria, Surrey, Quesnel, Port Alberni, Prince George, Penticton, Williams Lake, Mission, Logan Lake, Nanaimo, Abbotsford and Osoyoos, totalling another $41 million and 610 housing units, for a total investment of $133 million on 47 buildings, 2,150 units.
S. Simpson: Of the 26 SROs in the Lower Mainland, I know that most of those buildings, if not all of them, probably required additional investments in renovations and upgrades. Have they all been completed, or how many of those are completed and now occupied?
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Hon. R. Coleman: Hopefully, this will help the member. There are 24 single-room-occupancy hotels in Vancouver. Most of those are in the Downtown Eastside, and some are in other areas of the city. We're investing $57 million in renovations on those between 2009 and 2010-11. That's the upgrades to the hotels as well as to the others we've purchased in Victoria and New Westminster, because we did purchase in other communities. When we do our numbers, we do it provincially. We don't just do it Vancouver-centric.
All of the units are completed for a health and safety upgrade, so they're now all habitable, and they're all occupied, with the exception of the Pender Hotel. The Pender Hotel we bought; it was vacant. Once we got inside and looked at it — it is the exception — we actually determined that it needs to be torn down and a new build put there. It's going through a rezoning process to replace it, because it is just not worth the investment to salvage that particular building.
Over time we will continue to do other upgrades to the buildings. Now that we have them, they'll be on our natural upgrade schedule to do things like upgrades to flooring, and those sorts of things, as we go forward with other systems. But that's the status of them today.
S. Simpson: Of the 24 SROs in Vancouver, excepting of course the Pender that the minister talked about…. All of those units, which is the vast majority of the 1,550 units that the minister talked about, are currently occupied. Those buildings are currently fully occupied. I'm not worried about, sort of, somebody moving out last week and somebody else moving in next week, but occupied in that no units have, say, sat vacant for more than two or three months' time.
Hon. R. Coleman: One of the buildings we have in the 24 is the Dunsmuir. The Dunsmuir has 166 rooms. About a hundred of the rooms are occupied, and the other 66 will be ready for occupancy as we complete some system upgrades. As we've had some vacancies take place over the winter, we've actually targeted a certain number of units to be available to take the pressure as we deal with the HEAT shelters.
S. Simpson: Could the minister tell us how many units B.C. Housing is holding back or intends to hold back to either deal with people back on the street after the shelters close, assuming that they close, or holding back for other situations or circumstances like that?
Hon. R. Coleman: I don't have the number right off the top, because we've actually been occupying people from those shelters for the last number of weeks now. As we've identified where they can go, we've actually been moving them into housing stock not just in Vancouver but, if they had wanted to move, in another community where there was stock available — that sort of thing.
We've always managed to have, because of our vacancy turnover…. Obviously, there's a transient population with regards to some of our housing. We try and maintain a relationship to what we think the balance of the marketplace is. It's like what we did last year with the HEAT shelters. We spent the time to identify who could go into housing. We also knew how many shelter beds were available elsewhere, so we could actually identify where people could go to. B.C. Housing did that successfully last year.
Of course, we have four shelters, as the member knows, that have significant commitments from both the city of Vancouver and the provincial government that they would not stay open in those neighbourhoods after April 30, and that's the smallest number of people in the shelters, actually, in the global sense. It's about 160 people, and we're pretty comfortable. We're very, very close to being able to have identified shelter or housing for all of those folks if they want it.
S. Simpson: I know that B.C. Housing keeps vacancy reports, and they report in a number of ways. One of the ways, I believe, is that they report the number of units that have remained vacant for, I think, 90 days or longer. I think that's the period. I can certainly be corrected on this. I believe they report this out on a quarterly basis or something to that effect. Is that accurate? And then does B.C. Housing keep a similar data system record for its holdings in the SROs?
Hon. R. Coleman: I think the one clarification I need to give to the member is that we're not managing the SROs. They're managed by non-profits who are partners with us in these.
We have an inventory of ours and other SROs in Vancouver, and what we do is monitor the vacancies twice a month with those operators who we deal with. Right now, we're actually monitoring daily as we do the transition from the shelters.
S. Simpson: I understand that there is management, that there are non-profits or service delivery organizations that manage the buildings, but it was my understanding that B.C. Housing essentially has control and controls the issue about residency and who gets accepted and who moves in — that those decisions are not made by the non-profits and that ultimately the decisions are made by B.C. Housing.
Presumably B.C. Housing has control of that system of who's in the buildings and who's not. I assume they get reports when folks move out so that they can keep current records. If that's the case, then wouldn't B.C.
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Housing, in fact, be managing who's coming into the buildings?
Hon. R. Coleman: We have a centralized tenant selection process that we work with the non-profits on. We manage that centralized tenant selection process right now, but it is being transitioned to the management of the non-profits over time. They will take over that process, which we would continue to monitor. Every one of these is basically a partnership and a relationship with a non-profit. We all work together, and we manage that.
Like I said, twice a month we get reports on the vacancies that we monitor. But right now we're doing it daily because of the anticipated shelter closings. That's why we do it daily, but normally our average is we have a tenant-monitoring system that we run twice a month. Then we have the tenant selection process where we have identified tenants for buildings ahead of time.
S. Simpson: If B.C. Housing is monitoring that, and rightly so…. I know that all partnerships, particularly between governments and service delivery agencies, have their up and downs, and I know that there are questions.
I'm glad to hear that there's going to be a greater role for the non-profits in the tenant selection process as it moves forward. They certainly want that and have expressed that to me, the same as I know that there's always an ongoing debate about the level of services for operations and staffing levels and those kinds of resources that come in buildings, and not always an agreement about how much should be there.
If at this point B.C. Housing, at least currently, kind of controls or has control of the tenant selection process before the transition completes to some other kind of partnership, then shouldn't B.C. Housing have some idea, even in a broad sense, of how many vacancies there continue to be? The minister talked about vacancies but wasn't sure of the number. Shouldn't we have some idea, then, if we're getting reports a couple of times a month?
Hon. R. Coleman: I'll give you a snapshot example — for instance, like last week on a day when we had 46 rooms that were vacant. We had 29 of those rooms that were actually allocated, so that means we had somebody identified that was going to move into them.
That doesn't mean they had moved in immediately that day. Oftentimes what we find…. We had 17 vacant that we're obviously allocating now, and we're doing that again today, tomorrow, every day with our data. We could give you snapshots by days or whatever, but it's really…. We don't have that right here, because today's snapshot won't be done, for instance.
The challenge we have, though, even when we allocate units, is in finding our tenants sometimes. They could have been in a particular shelter or they could have been staying with a relative or they could have been on the street. We've now allocated a unit, and we have to actually find and locate that particular tenant.
The other thing we find with our vacancies is that because of the transient population — and the non-profits will tell you this too — they'll have a room that they think is occupied, and the person has actually moved on but not told anybody. So sometimes we find we have a vacant room, and it may take some time to find that out. Then you have to prepare the room, which means you clean it, you get it ready, you check it for the issues that may be there for the next tenant, and then you get it ready.
There's always that turnover, particularly, and this is a very difficult housing stock to manage for the people that manage it. I think they do a pretty good job, actually, but it is a very difficult population with regards to the issues around mental health, addictions, and those sorts of things. I think they've got a pretty good management program, and we will continue to monitor.
Given the recent experience of one non-profit, it's very important that we have the systems in place and the monitoring in place. Another member thought it was good that the non-profits would move more to the control of the allocation of tenants, but we do have a recent case where the allocation of the tenants became the subject of a significant audit with regards to abuse.
So we have to make sure that our monitoring systems match up to the relationship as well, and that's why we work this through the non-profits to make sure it works for both sides.
S. Simpson: I appreciate that, and I'm sure the minister would be the first one to agree that while there's a situation out there today, the vast majority of non-profits do a great job and deliver a very efficient and effective service for the people they serve on behalf of the province. They do a great job, and I'm sure the minister would agree with that.
The minister talked about sort of 46 vacancies at this point, about half of which, or maybe a little more than half, are targeted for occupancy with somebody. There's somebody coming in at some point, if they're coming or if you can find them.
Is it fair to say that out of the 1,400 units or so the vacancy rate reasonably kind of stays — and I understand this is a hard clientele to deal with — sort of in the 2 percent, 3 percent range, under 5 percent? Is that kind of what it's been like consistently since these buildings have been opening up?
Hon. R. Coleman: Yeah, you're pretty close. Our monthly turnover is one to three units per building. We
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have 1,500 units, so 2 percent would be 30 units, sometimes 40 units a month. We do find, as we go to higher upgrades in some buildings, that the turnover is less. We find a lot of people that move from one building to another.
As new product comes on, we'll have people that will want to move into those buildings, and that stabilizes a longer-term tenant. Then you still have this for whatever population turnover. It's about 2 percent. That would be fairly good, actually, when I think about it, even in the private market. Back in the days when I did know the rental business in B.C. a little bit, 2 percent was not unusual, actually, and some months it was worse. So that's being managed pretty well by the non-profit groups that are managing it.
S. Simpson: One of the areas around the SROs in particular, some of the other hard-to-house buildings, certainly, but the SROs as well…. I guess it would fit for both, particularly when you're dealing with the harder-to-house population. The staffing levels in the facilities are always a point of discussion, because it's different than your traditional or conventional apartment block; that's for sure.
I know that some of the agencies, the service providers, have had concerns about whether they're getting the staffing levels they need. I know the ministry has made determinations, B.C. Housing, about what they are, and we now have a situation as it is. I don't want to debate whether that was right or wrong.
What I'm wondering is: is there a process of evaluation by B.C. Housing as those buildings continue to operate and the discussions with the non-profits that run them go on? Is there a process of evaluation for B.C. Housing to determine whether, in fact, those service levels — resources, staffing levels — are appropriate, or there may be room for a review and a determination that, yes, maybe we do need another half-staff person or a full-time staff person, depending on what the situation is? Is that review process in place?
Hon. R. Coleman: We continue to monitor the level of service in all our buildings, everything we deal with. We have enhanced our relationship with Health and with health authorities with regards to other services that can come into buildings. Basically, we undertake a review on an ongoing basis and, in fact, have actually increased where we felt it was necessary — with working with our non-profits that felt they had a particularly difficult population or whatever the case may be. Or we brought in additional mental health services or whatever, where we can do it with health authorities.
You know, we're undertaking on a pretty regular basis a detailed review. I mean, this is a file that changes over time, and we've learned a lot since we started to add services in the buildings with our non-profits. We feel, for the most part, that we're giving adequate funding to the services that we do, but we do work with the non-profits on our annual budgets and what have you when we sit down with them.
We've integrated services across ministries — health services, mental health services, and also even between housing and over to Housing and Social Development — with regards to being able to provide additional funds for things like meals and supports, and stuff like that.
S. Simpson: The situation there with the non-profits. One of the things that the minister will know for sure…. This may actually bear out in some of the 2,371 units that the minister spoke of which this additional money that's kicking out in 2010 is going to build, as these new units come. Not in the case, necessarily, of things like seniors buildings, but I'm sure some of those are for the homeless, for people who have other challenges and barriers.
The minister will know that sometimes as you move those into communities, you get push-back in those communities from people who aren't keen about having those buildings in their neighbourhood. Part of the argument to be able to place those buildings and make the case for it, of course, is the level of support services that is in a building or available to a building to provide some confidence to people that there are folks there 24-7 whose job is to make sure that the building is functioning properly — and, by that, that the broader community can be confident that it's a safe place, depending on the makeup of the building.
Part of the challenge with that, of course, is that it's always a negotiation around that. Will there be some kind of public assessment done of how that works? How does that work so that you begin to satisfy people that those levels of service are being provided, to leave communities confident that this is a good idea, or at least an acceptable idea, to put these buildings in their community?
Hon. R. Coleman: On every one of the MOU sites we do a community consultation on the population and on the services that would be in the building. A minimum for every building that we're building is two staff 24-7, plus support staff. That's the minimum.
But I will tell the member that it doesn't matter. In many cases what you will have…. You will do the consultation with the neighbourhood. I'm sure that the member is familiar with the massive public hearing a number of years ago on a project on Fraser Street that was basically supportive housing for people who had addictions. Hundreds and hundreds of people came out to a public hearing that took days — right? — to fight the project, to not have it happen in the neighbourhood.
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The project got built. The supports were there. I was at the opening of the building, and I talked to people from the neighbourhood, who said: "You know, I'm kind of ashamed I attacked this project, because I don't know what all the fuss was about now."
There's always this fear of the unknown for people in neighbourhoods. We do have to recognize, and communities have to recognize, that we do need to have projects like the ones we're doing in communities where we can integrate people into communities and have supports for them.
In my experience, even back in the days when I used to do social housing for non-profits and stuff, long before I entered politics, there was always discourse at a public hearing, even for the simplest social housing project. I think we've gotten better, from the standpoint that our local governments have actually been a lot stronger, particularly places like Vancouver, Surrey, Kelowna, Victoria — and Prince George, I guess. Prince George did have one that they turned down and then changed, and now they have a project that's finished. It's made a huge difference in their city.
It really comes down to other people in the community supporting the local council to make tough decisions. There is always the fear of that on a public hearing level. I don't know how we get past that. We've worked to get projects, to get properties identified within community plans for this type of use, for supportive housing built into community plans for communities, because long term we have to continue to do this.
What we do on all of our sites is have a community consultation. We identify what the services are that we're putting into the building and what population we expect will occupy the building, and we do that in conjunction with our partners.
It could be anyone from the Portland Hotel Society to the mental health association or the Salvation Army or any one of those groups who are actually the partner in the building. They're also involved in that community consultation to let people know what the services would be in the building and to try and build that comfort more into the sort of redesign, the rezoning or predevelopment process so that we would have a better outcome for the neighbourhoods at that time. But I do know, in spite of a lot of that even, that you still get discourse in regards to a project coming into particular neighbourhoods.
S. Simpson: The Fraser Street development is a good example. Of course, part of the success of the Fraser Street development was that there were significant pressures.
There was a pretty good envelope of services able to be provided there, as well as, I understand, the creation of an advisory committee of the local community so that the people who were most keen about this or who tended to be active in their community had an opportunity to be part of an ongoing discussion and, hopefully, to deal with challenges before they became problems. That's part of the success of what happened on Fraser Street, and I think it is a good example, actually, of how to approach some of the challenges of putting buildings in communities.
People do have concerns, and they have to be responded to. I think there is that challenge there.
I want to move a little bit to the shelters and the shelter closures in Vancouver. As I understand the situation — and the minister can correct me — we have the three shelters that will continue to remain open and four that will close at the end of the month.
The question about what appears in their place is an open discussion. Largely, it seems to me to be a debate over operating dollars, with the minister saying, "I want a 50-50 split" — or something to that effect — "on operating costs," and the city saying: "Operating is a provincial responsibility." That affects what happens in terms of any other partnered developments that might be put in place.
Could the minister tell us: is that a fair portrayal? Or maybe the minister could explain the problem.
Hon. R. Coleman: I want to be very clear about this. The history of the HEAT shelters is that they came into being in the winter about a year and a half ago. At that time the city of Vancouver put up $500,000 in operating dollars, the province put up $500,000 in operating dollars, and Streetohome put up $500,000 in operating dollars.
After the first couple of months of operation the city said: "We can't afford to pay any more operating dollars." We thought the outcomes weren't too bad on some of the shelters, so we kept them open longer, and we paid the freight to the tune of about $7 million.
The funding for last summer, when we closed two shelters, one on Granville and one on Howe…. They were part of the original HEAT shelters. They were shut because there was a significant problem with them. As the weather got warmer, the issues with the shelters moved outdoors into the neighbourhoods. We had significant neighbourhood backlash on some of the issues that were taking place.
I'm not going to get into all of them, but I'm sure the member is aware of the stories and what went on. There was some significant concern about that. So we closed those last year, and as we did it, we transitioned those 80 people into other shelters and into housing.
As we came into this winter, we decided, with the city — because they decided they had some other facilities that they could do — that we could try some additional shelters in some other neighbourhoods, because they had concerns for the winter in those neighbourhoods. They were four additional HEAT shelters: one on
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Broadway, one on Granville, one on Cardero and one on West Fourth.
We committed, as did the city, to those neighbourhoods that those shelters would not have the same experience as what had happened at Granville and Howe a year ago and that they would close on April 30 for sure. We've maintained that commitment.
There was a short period of time where I think the city was prepared to not keep that commitment, but we said to them: "Look, we really cannot keep these open beyond those dates for a number of reasons. One is that if you ever want to put a project that's more permanent in the neighbourhoods where these shelters are, you will lose your credibility with those neighbourhoods that you would keep your word on the closure of these shelters." So those are closing.
We have been identifying places for folks to move into. We've identified additional shelter space that we already have, because vacancies start to come and shelter space starts to reduce this time of year, winter versus summer. So we actually have space for the folks that will come out of those shelters, and we feel very comfortable that we can transition those.
At the same time, we've had discussions over a lengthy period of time on a number of files with the city. Last year when we talked about this, they made certain commitments to us on some other things that we were doing with them that today have not been done.
We have not made a decision on whether those additional three HEAT shelters will close on April 30 or will remain open. We expect, with the discussions that are taking place, because there are some negotiations taking place, that that decision will take place very soon. It may take place while we're sitting here, for that matter. We may get to the point where we feel comfortable making a decision one way or the other, and we will make that decision based on those discussions.
I do get that sometimes the city thinks they shouldn't pay operating costs. I respect that position that the city has, and I also respectfully say to the city: "That's great, but then don't create something without consultation with us in the future and then come for operating costs after the fact."
This is a partnership. We have to have a relationship with the city, and to this point it's been a pretty good relationship, not just with this administration but with the previous one as well, where we've always been able to work out our issues and solve these problems.
As I watch some of the public discourse about this…. Last year I had to be patient and work through the issues and let B.C. Housing do its job and let the city staff do their job, and I'm doing the same thing this year. I will get the report back and the appropriate information and make the appropriate decision within the next couple days. At that time we will show people how we will manage the issue going forward, whatever the decision is.
S. Simpson: We'll talk a little bit more about what happens in the city. I'm sure the minister would agree that the shelters…. Whatever happens to the three, we know the four are closing. Is it 160 or 180 people or so that might be in those shelters? I'm not sure what the number is, but they need to have a place to go. Certainly, one of the questions to the minister will be: is he confident that there are places for these people to go, if they're looking to remain in shelters or other forms of housing, whether it be SRO units or whatever it be?
In the longer term — and we'll have a bit of this conversation now — the minister, I would also believe, would be one of the first ones to agree that shelters are a stopgap measure and that they don't constitute housing. They're a place to get people in off the street and provide them a little bit of service and hopefully be able to transition them off to something that's a better situation down the road.
Can the minister tell us: as, in our city of Vancouver — and it's true in other communities — they try to begin to look at ways to deal with the number of people who are on the street and who are potentially on the street, what is his thinking about how that housing gets provided?
It's interesting. The Downtown Vancouver Business Improvement Association released a study today that they had done showing that since the shelters had opened…. I think they had projected about an 80 percent reduction in panhandling and trespassing and disorder, by their standards, and I see that the Vancouver police have also come out today and indicated their support for the shelters or for an alternative that does what the shelters do in terms of getting people off the street.
I'm just looking here. Regardless of the debate between the city and the province over how this all plays out, the issue is: are these people going to have a place to go after April 30, when the doors close on those four shelters for sure and possibly on the seven shelters? Are these people going to have a place to go that isn't the street?
Hon. R. Coleman: I guess the member didn't quite get my previous answer. I said to you that we are working on a plan and have identified that we will have a place for everybody coming out of the four shelters to go. It's housing. In some cases it's other shelter, because we have space in other shelters.
I know that people like to point to one piece of a puzzle to say: "Boy, it's the shelters that have changed Vancouver." And I don't get the downtown businessmen's association thinking on this, nor do I sometimes get the board of trade or sometimes even the police departments.
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There are 24 SROs that were purchased, which have been renovated — and a number of them were vacant — where housing for people was provided in the last few years. There are outreach workers that go into the shelters in Vancouver and across British Columbia every single day. So 8,700 people that were previously homeless and suffering from mental health and addictions across the province have been housed, and 80 percent of them are still in some form of housing today.
We set out with a long-term strategy. For the member's information, we actually expanded the shelter space and took it 24-7 at an expense of well over $40 million three years ago, long before the HEAT shelters were thought of. We actually expanded the shelter space. We put meals in them. We put in 24-hour staffing so that we didn't have to turn people out into the street every day. We have continued to add all these different spaces.
The long-term solution, no question, is additional long-term housing for people. In Vancouver right now there are six sites under construction. One of them hasn't gone in the ground as quickly as we would like because it has a soils issue. The first site which the city put up…. This is where the relationship with the city is very strong. They put up property under the previous council and made a commitment to those sites. In February 2011 the first city site will be completed. That's on Station Street. It's under construction, non-profit selected. It's being built.
There's another one at Main and I forget the corner and another one downtown, just off the edge of the Downtown Eastside in Chinatown, which are actually under construction, and one over on Dunbar, which isn't in the Downtown Eastside area. All of those sites had significant dollars committed to them to build them.
As we go through this, the long-term plan is that you continue to build as you provide what…. The member is correct in saying that shelter isn't supposed to be the long-term housing solution.
We are the only jurisdiction that does a 24-7 with meals for shelters. We're the only jurisdiction that's had the success with the outreach workers. We're the only jurisdiction that put in a homeless intervention program to actually tie services together. In the last 18 months alone 2,400 people in five communities across B.C. have been connected with housing, supports, medical supports, mental health services, and that sort of thing.
The package that goes with that also includes what a long-term solution is for the individual. The biggest change that was made in this jurisdiction, which is now being copied in other jurisdictions on a model that some people call Housing First, is that you don't stop at Housing First. You actually have services for people. You try and identify their mental illness issues, their addiction issues and try to get them the services they want.
Out of all of this, over the last few years, has come the Burnaby Centre for Mental Health and Addictions, which is a place for people with severe mental illness and addictions to go. That taught us something as well — that we had some folks that needed a longer-term stay with more institutional help. That's why we've now renovated and opened additional beds at Riverview for those folks — because we know that they can't necessarily function in some of the supportive housing that we'll be developing.
We have a significant commitment to the city of Vancouver. As a matter of fact, just in the last year alone — a little over a year and a half — we put a $300 million commitment into this city, not counting the $120 million a year we put into supports for 26,000 units of housing in the city of Vancouver alone. We are a partner with the city to solve this problem.
We're going to get there. The only difference is that this time — and that's what I've told the city — as we come through dealing with the last three shelters and we make a decision on them, if they're going to continue, we're going to have a long-term plan attached to them as well so that people will know what the long-term outcomes for those folks will be and so that everybody is focused in the same direction.
I've always said to everybody that there's a housing strategy. It's called Housing Matters B.C. If your programs can match in and match up with what is considered in Housing Matters and how we do the long-term strategy for housing, we're there as a partner. But if you go off and do something separate without consultation with us that doesn't match the plan, then the difficulty is that we've already committed the money to the plan for the long term to make it work, so you can't just all of a sudden pick money out of a cloud somewhere else.
These HEAT shelters, which have been a good experiment, have taught us a number of things. At the same time, we must remember that initially they were thought by the council of the day to be a stopgap, temporary decision and not one that was long term. Of course, they did initially, as I said, put in a small amount of operating money, which is no longer there.
So we're working through it. We're discussing some things with the city now. We will make a decision, as I said. Quite frankly, given the briefings and information I had earlier today, I don't think people are going to be dissatisfied with the decision we make.
S. Simpson: I guess, at the end of the day, the success of the HEAT shelters has also been their low-barrier nature, which was very important for the clientele that they were looking to have. There were some innovative decisions made there, and certainly, the decision to apply services too, which adds to the cost. But it made them work.
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In terms of the views of what we know are the business improvement association and the police and others, I'm sure the minister could debate with them in due course over their positions that the shelters are important. I think their position is more than the shelters being important. It was that people have opportunities to get off the street in some way, shape or form.
In regard to that, the minister talked about the 14 sites in Vancouver, six of which are in progress right now or in some degree of progress to completion. Could the minister tell us: what is the status of the other eight sites?
Hon. R. Coleman: We have a capital plan that we deal with every year, and we also have financing arrangements that we work out for non-profit relationships. Those go through, even though our proposals….
First of all, let's be clear. We're committed to the sites. We're committed to the six sites under construction, and we're committed to the others, but we're also committed to all the MOU sites we have. We're not just committed to Vancouver's sites.
We have to manage them within a capital plan. They have had money invested in them. They're not all ready to go. They need to go through development permit, building permit, building design, and go to tender and that sort of thing.
As we identify those dollars that are needed, we have the ability to make presentations to our Ministry of Finance on additional dollars that we would be accessing to build out projects across B.C. We've been very fortunate to have that flexibility given to us so that we can actually phase these things in as they're ready to go.
Even though we have a substantial amount of capital committed this year because it was matching some from the feds, we have an ongoing relationship on the ability to finance additional projects. What we do right now is have some presentations in the mix that will lead us to get the balance of the MOUs to the point that we think we can get them done.
It's all a matter of government processes, but we're pretty confident that our numbers in the stuff we presented work. Everybody will be agreeable, and we'll get there. If not, then we have to adjust how we build the business plan around it. But we'll get there, because we do have the commitment that we made and the government has made to do these sites and try and get them done. We know, as the member probably knows, that it sometimes takes some time to get a project on the ground.
Woodward's only took nine years, but Station Street has been pretty good. I think it will actually be about 28 to 30 months from start to finish in the process, which is pretty good. We've invested significant millions of dollars in all the predevelopment work on all the sites, getting them ready and starting to design them. We wouldn't be doing that if we didn't intend to build.
S. Simpson: Of the other eight sites that have not moved forward yet, could the minister tell us when it's expected they will have funds committed? I know that I've spoken to the city about them, and the city says that they're…. It's a bit of chicken-and-egg going on here, I get the sense. But they're moving ahead and prepared to move ahead on those sites. That's what the city told me as early as a day or two ago. When would the province be in a position to commit the dollars to move those sites ahead?
Hon. R. Coleman: We have a commitment to do these. I said to the member that we're in the process of taking them through now. I can't prejudge a decision of government, but I can tell you that we're very confident that we have the support where we need it to get these things done.
There's a lot of childish rhetoric that comes out with regards to a number of these sites in the city of Vancouver from individual members who might sit in elected positions. I don't actually bite on that. I don't actually react to that, simply because if anybody looks at the history of the partnership we have with the city, when you think about buying 24 SROs, spending the hundreds of millions of dollars we are in the city and the commitment…. Every time we've made a commitment to projects in the city, we've followed through, and this will be no different.
They may have those types of comments, but I can tell you that we're spending money on predevelopment design on all of those sites right now. We wouldn't be spending it if we weren't working towards the next phase, to start the construction.
S. Simpson: I think that's fine. I understand that sometimes these processes to build things take more time than was originally anticipated.
[J. Thornthwaite in the chair.]
But the minister, of course, will know that these projects, the 14 — and I'm sure he'll tell me the timeline — were committed to a couple of years ago, which is when that announcement of these sites was first brought in — I'm sure the minister will provide me with a date — and that most if not all of those projects should be done or well on their way to being done, based on what the initial announcements were at the time.
We know there have been delays and that delays will occur. All I'm asking at this point is to get some sense of how the province is meeting its responsibility there, but the province and the city will sort that one out.
At the time that the 14 in Vancouver were announced — or I guess it was the 12 and two at that time — there were also announcements of a number of other
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sites, a comparable number, I believe, spread around the province in other communities. I know there were some in Kelowna and in other communities around the province. Could the minister tell us: of those announcements that occurred at that time, what is the state of those projects, in terms of completion or in development or what?
Hon. R. Coleman: I want to be clear to the member, and I want him to hear this. The announcement at the time was that there would be 17 MOU sites done across the province of British Columbia, six of them in Vancouver.
In addition to that, Vancouver later found six additional sites they wanted to add to the mix, and then they bought two more sites or added two more sites later. We actually committed the predevelopment funding for those and said that we would go to work on doing those in addition to the six that had been committed.
For the member's information, the other communities…. There were 17 MOU sites in total. For instance, in Victoria there were three sites. Two of them are actually in construction today, and the third one is under proposal. In Kelowna there were three sites. Two of them are actually under construction, and the other one is being worked on.
In Surrey the funding is committed to two, and we're starting to work. One of them is under construction, and the other one is working through some development issues. In Abbotsford there are two. The same situation — the funding is committed, and the other one is proposed through a process. In Maple Ridge there is one progressing there. There's one in Campbell River.
In Nanaimo there are two, and another one or two that are actually to be determined, because they're new to the game. In other words, they were not in the original 17. As well, there's one that has been completed in Langley, and some other projects across the province as well.
In addition to those, and then on the six in Vancouver, there's $170 million being spent right now on the construction of the six sites, and there's been tens of millions of dollars invested in the other eight. We've made the commitment to proceed with the other eight, as I said to the member. We're going through the government process right now to identify how we will finance and fund those. I think our proposal is solid enough. The commitment is strong from government to do them, and they will get done. That's where we're at with them.
I think we've actually moved pretty quickly, to be honest with you, hon. Member. The announcement wasn't that long ago, and you actually have a number of them under construction. As I said to the member earlier, sometimes…. This is where you get into some of the rhetoric around some of these.
There's one site that's a very difficult site, in Vancouver. It's a triangular site. It may have some very difficult soils and construction issues that we're working through. That is one of the six where we thought maybe we'd be in the ground by now, but quite frankly, it has some significant issues that need to be worked through. You can't just go on a site where the soils aren't correct, where your geotechnical doesn't work and all those things.
There's significant work and investment going on, on all of these, and we've committed to them. There is no question at all that we've committed that we're going to do the balance of sites in Vancouver and the other MOU sites across British Columbia.
Each year we go through the cycle. When something is ready to go, as I explained, and we think we're ready to tender, then we know our numbers. We go back and say: "This is the money we need for this site or this site." Sometimes we bundle three or four, and Finance then gives us the envelope to go ahead and do that. That's just the normal financial process.
S. Simpson: Could the minister tell us: of the 17 initial sites — that excludes the other eight in Vancouver, I assume — that were initially in play here, just specifically, how many are under construction? How many are in some other level of development? Maybe he could just remind me, since I'm not clear, of what the date of that original announcement was.
Hon. R. Coleman: All of the other sites of the other 11 are under construction. Of the six sites in Vancouver, they're all under construction. Then the next step is that we've committed…. We believe it's the fall of 2007 when the announcement was made.
The city of Vancouver subsequently brought some other units, some other properties to the table. We committed to do the predevelopment costs, which was in the millions of dollars to get them ready, which we've been doing. We said that at the appropriate time — as they got ready and as we worked through the first envelope of money to build the first six — we would get the money to build the next eight, and that's what we're working on now.
S. Simpson: Is the deal — the Little Mountain agreement over the sale of Little Mountain — now entirely finalized and closed off? Now the developer is working with the city on the development permit process. But the actual agreement and the business transaction between the province and Holborn, I believe it is — is that transaction completed and finalized?
Hon. R. Coleman: The transaction was finalized in April 2008 with Holborn. They're just in the process of
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starting their public consultation and their rezoning process now.
S. Simpson: Does the finalization of that mean that the province has received the cheque in relation to the sale of the property?
Hon. R. Coleman: It's a complex agreement that has some phased payments to it. We received a substantial payment on signing, which was part of the agreement. The agreement is actually subject to a very important confidentiality clause because of market conditions and what have you. I can't get into the details of the agreement here. That's why you haven't had the city talk about it either. They will go through their process.
I can tell the member that it was a well-negotiated deal. They were the right financial numbers, I thought. Obviously, they were the high bidder anyway on the transaction, and they have met their conditions today without any problems.
S. Simpson: As part of the conditions of this, I know there were 200-plus units of social housing, non-market housing. Is part of the binding agreement here…? Does it say that those non-market units get built first and that they're first into play? I believe I recall having heard that somewhere, but you can't always believe what you read in the newspaper apparently.
I thought I'd ask the minister whether, in fact, that is binding, that those units — the non-market piece — get built first or at the beginning of the process.
Hon. R. Coleman: The commitment is to replace all 224 units that were on the site within the phased development as it gets done. Our hope would be that they be done in the early phases, but the one thing we want to make sure of is that we integrate the housing in the entire project. It's not a question of putting all 224 in a single building. It may be 40 in one area and 30 in another and 20 in another.
We're comfortable in our discussions that the early phases will contain the 224. That's the commitment we've asked the developer to make, and that's the commitment we're making to the project.
Any large property like this will obviously be subject to market conditions — whether the market is going to be there for the project when it actually gets to go into the ground. As you know, real estate is cyclical. We want to make sure that the project's health works out just fine. We have made the financial commitment, and we've actually committed the dollars within the financial relationship of the project to ensure that all 224 units are replaced.
S. Simpson: I'm going to move on to an issue about some innovative building of housing. The minister talked about modular housing, when he was talking earlier in our conversation, and about some of the interesting innovations. We know that there have been a number of proposals put forward in Vancouver around modular housing, container housing. It's called a number of things.
Some pretty prominent Vancouver people in the design and development industry, people like Gregor Henriquez and Michael Geller — those folks — have brought forward different proposals that they thought might help to support putting some housing in place at relatively economic terms compared to the cost of some housing that gets built, using these models.
Has the government given consideration to that? Is the government through B.C. Housing looking at building a project or doing any of that work as a model or to test-fly it?
Hon. R. Coleman: We don't support container housing. We've looked at it. Basically, it's always presented to us as temporary housing, which isn't cost-effective in either the short or the long term. What you end up doing is basically orphaning a site that you could actually put long-term housing on, which is way more cost-effective for the long term.
I've always said from the very beginning that I didn't see the solution to issues for housing is to go take a bunch of shipping containers and have people live in them. I've always had that position, anytime I've looked at this. Although I did say: "Let's go look at the numbers." Let's talk about it just in another environment.
Containers can be stacked up two or three floors with hallways sort of attached or walkways in between them to turn them into this container housing. I've seen the models. You could build that modular and do exactly the same thing. The difference is you'd be building out of wood. You'd be building more architecturally designed. It would be a better product, and it would probably be in a position to do what we did with the Olympic village — actually turn it into more permanent housing rather than having it as a temporary housing solution.
We think that's more cost-effective and much better. To be honest with you, I haven't found a community that says they want this form of housing, and I haven't found anybody in the private sector who thinks they would take it into a marketplace as a cost-effective model for housing that they might want to put into a rental market.
At that point I have to ask the question: is this only for one type of person that you want to build this housing? You wouldn't have anybody else live in it, or you wouldn't make those decisions with regards to it? From my perspective, I think that the build we're doing in Vancouver with the buildout to the six sites, the commitment we've made to the next eight, is a way better investment of dollars for the long term for housing. We
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already did the temporary housing investment when we bought the SROs.
We also know that if we can find additional existing housing that's vacant and that may need an upgrade or what have you, it's way more cost-effective than going this route. I've read the reports on these guys — I've even met with them — and from our position, from what we were prepared to fund into, container housing isn't one of the things we want to fund.
S. Simpson: I've seen some limited examples of this. Certainly, I'm interested in seeing more of it to see how it works. I believe this weekend there's a design charette, work being done this weekend in Vancouver. Some people are working on this to try to advance the discussion around it again. Quite frankly, I don't have enough information to know whether or not I agree with the minister on this.
What I do find, though, is that we're in a place, particularly in our urban areas like greater Vancouver and that, where cost pressures on housing are obviously huge. I'm told by the folks who advance these ideas that they don't view it simply as a place to put homeless people. They view it as an option to meet some other housing needs, and I'm interested in knowing more about what that means and how that works. I think there are lots of questions to be answered.
I appreciate that the minister has a position, and I know that one thing about the minister is that he's always prepared to take a position and tell you what it is. It probably would be good to have another look just to see how this all works, particularly as we get past what looks like kind of the rough and tumble box on an oil rig site or something where you're putting people or they're living today in these things. That is of interest, absolutely.
I'm going to move from that discussion to just a little bit of information in regard to the B.C. Housing projects that exist — the Stamps Places, the Skeenas, those projects.
I know that last year at the time when we had estimates, I asked the minister whether there was any consideration of looking at the Little Mountain model for any other projects that were held. At that time the minister said there was no intention to look at replicating the Little Mountain model anywhere else in terms of demolition and rebuilds with some sale. Can the minister tell us: is that still the position in regard to developments, or are they looking again?
Hon. R. Coleman: Just before we move on from the last subject, on the container housing. The other thing is that it doesn't fit our wood-first policy within government with regards to what we build. We try and build with wood first. Although when we build higher in Vancouver, for instance, we do go concrete because we're getting density on a tighter site, so we get more units.
As I discussed with the member when we talked about Little Mountain last time, I believe I said that we always try and take a look at our inventory and opportunities as they come along. What we've done is formed an asset strategies branch within B.C. Housing that is basically undertaking a detailed review of all our sites and all our properties to see what opportunities may exist with them.
Each site is unique. We don't have a Little Mountain–type project of that magnitude within our portfolio, but we certainly have some opportunities for some infill from stuff that we may have. We have some duplexes in one community that are really not serving us well. It may be better if we sold that inventory and built a larger project off the revenues of that within the community on another piece of land that we have.
We have, for instance, a place like MacLean Park, which is in Chinatown — not that we're going to do anything with MacLean Park — but it has a lot of surface parking. Now, in today's economy it might be well worth your while to take the parking underground and build some additional housing on the parking lots in that particular site.
Those are sort of examples. The asset management strategies branch is looking at all of those. They will bring back what they think are opportunities to be able to do that type of thing.
We're also working with a number of non-profits that have some very old sites where they have come to us and said: "We think we could redevelop these sites for more density and maybe take care of our clientele." In some cases some of the projects are really where you'd have two acres of land with ten units on it. They've come to us in these communities and said: "These are old. They're 50 years old. Our society thinks we should do something better with it, to infill it."
They've come to us, and what we'll do is work with the non-profit to give it some predevelopment dollars to look at what they could plan and densify within their community to take it through some processes in the municipality to see what's possible for them. Then we work with them on the business cases — how they could make it happen and replace their units and add more into what they deliver to the community and how they do it.
We do all of that on a regular basis. We are making sure that we're maximizing our opportunities going forward on our sites to add more. Obviously, one of the biggest challenges anytime you're dealing with development, particularly in more dense communities, is the availability of land. So if you do have land that you can densify, whether it's parking lots or whatever, you can
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actually save one of the larger costs you've got by not having to buy land. You can actually deliver a much more affordable product for the people you want to support with supportive housing.
S. Simpson: I certainly have no qualms about models that say a non-profit that has a piece of property that has an existing development on and wants to increase the density on it or upgrade it or improve it and add some units to grow the amount of non-market housing that it has under its umbrella…. That's a great idea.
I see that as a somewhat different model from the one that happens at Little Mountain, where the decision is made to sell a property into the private sector in return for a commitment to replace the number of non-market units and then build a significant amount of market housing on top of that and offset that. So it's a slightly different model.
When I look at the B.C. Housing developments…. Certainly the ones in the Lower Mainland I know pretty well. I think about some of them — that it might not make sense. I grew up in Raymur — I guess it's Stamps Place now — and I know that's one that probably doesn't work. But you look at Orchard Park. It's a little more dense, but it reminds me in some ways of a Little Mountain in terms of acreage and fairly low-density housing there.
I think about those kinds of developments as ones that, based on what I assume were the criteria that the ministry looked at to make the Little Mountain decision…. The criteria might not be the same, but it might be similar for a place like an Orchard Park in terms of acres versus units per acre.
I believe it's the asset management group or whatever the minister talked about within B.C. Housing. How does that discussion unfold? Is there a public part of that discussion where people get to talk about this, or are there criteria available for that group that talk fairly explicitly about what the objectives are in terms of retention of social housing, in terms of numbers of units, in terms of retention of the makeup?
You know, the minister has said it's not a priority of the government at this time to build new family housing. The government has other ways that it wants to deal with that — rental assistance programs and whatever, not to build new housing. But is there a commitment or a criterion that says that if we do make changes here, we are going to do our best to keep that inventory of family units that exist in those projects? While we might not be necessarily growing the numbers at this point, we'll not be reducing them either.
Hon. R. Coleman: First of all, I think you should look at Little Mountain a little differently. It's 224 units, bedroom for bedroom, replaced on a site. Then it'll be a Little Mountain legacy in Vancouver, for the largest part, and across B.C. of probably another 1,000 units of supportive housing that will come out of the dollars that can come out of Little Mountain — dollars that would not necessarily be available during tough financial or capital times. But because every dollar is committed out of that site, it will actually have a long-term legacy not just to Vancouver but to housing in general in B.C.
We start from the position that we want to replace all units bedroom for bedroom. That's the position we start from. So as far as the member's question on replacing housing, we replace it.
The asset management branch hasn't brought me a final report or any recommendations yet, because they're working on the review of the properties. They wouldn't bring it to me, first of all. They'd bring it to the present CEO, and they would sit down. They would come and brief me on what they thought the opportunities were and what properties they had, and then we would have a discussion about it.
Anytime we do a property, it obviously goes out to a pretty extensive public process, including rezoning and public consultation on the sites. We always do that. We would continue to do that.
If we have a non-profit partner on a site, it really comes down to what they actually drive. In the case of where we partner with non-profits that own a site, they drive the agenda. We try and work them through to make sure their expectations meet the economic realities of what they want to do on the site, because sometimes their expectations of clubhouses or whatever additional amenities they want to get out of a site are beyond the expectations or the ability of the project to pay for those types of amenities.
Each one is pretty unique, always has been. Frankly, each community is pretty unique with regards to what densities they'll accept and all of those things.
We'll go through the process, but our starting point is unit for unit and bed for bed. If we can get some additional benefit for the community by doing it, then we would. If it doesn't make economic sense, we won't do it.
S. Simpson: Could the minister tell us: is there a timeline, even a rough timeline, for when the asset management group is going to complete this piece of work, which I assume from the minister's comments is ongoing at this point? When might that be completed, and might there be some indication, some public indication, about what the thinking is or what the discussion is within B.C. Housing and within the ministry about the inventory and the asset?
Hon. R. Coleman: Actually, the initial report should be coming out later this year — to me, after it goes through the CEO. The reason for that is that we basic-
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ally have about a billion dollars in assets that we need to review. This is actually a big body of work for not a ton of people. It's a small group of people that are doing the work. They will get back. This is what I've asked them to do. I've asked them to go and look at our assets and whether there are opportunities on them to do more. That was the whole initiative that was started with them. So they'll report out later this year.
Madam Chair, at this point maybe we could take a five-minute recess.
S. Simpson: That's great to have a five-minute recess. I'll have the minister, when he comes back…. Maybe he could just answer the quick question when he comes back about whether it would be his intention to release that report after he has a chance to review it.
Then after we come back, there are a number of members who will have questions regarding housing. Then if we have some time, we'll get back and finish up with some of this with myself as the critic, after the members have had their chance. But we'll come back after five minutes.
The Chair: Thank you. We'll take a five-minute break.
The committee recessed from 5:05 p.m. to 5:15 p.m.
[J. Thornthwaite in the chair.]
S. Simpson: Just to reiterate the question before we took the break, which was: is it the minister's intention to release this asset management report after he's had a chance to review it?
Hon. R. Coleman: I don't know what the form of this thing will look like, but I do know that we don't usually discuss land issues in public, or valuations, because it would affect the marketability of opportunities or future tenders with regards to them.
It would be unlikely that we would go to the level of detail site by site. We would probably identify, if there were opportunities out there, what those opportunities were, and then we would engage the tenants and communities at that point in time. But we wouldn't breach what would be the normal confidentiality that would protect commercial interests — no different than what a municipality does when it does land use deals.
R. Chouhan: My questions are also related to B.C. Housing and some housing shortages in the Burnaby-Edmonds area. In one part of Burnaby-Edmonds the concentration of people who live there are either refugees, on welfare or working poor or low-income people. They are facing a huge challenge to find a good size of houses which have at least two, three or four bedrooms. The situation there, as Mr. Ramsay can testify, is that my office sends lots of letters to B.C. Housing on a regular basis asking for help to find those units to accommodate larger families.
For example, Hillside Gardens in Burnaby-Edmonds is still not complete. There was a fire a few years ago. They only have one three-bedroom unit and two four-bedroom units. In fact, the families who live in that area are quite large. They need larger units, more than what we have already in Burnaby-Edmonds.
So my question is: what are the ministry's plans to address the housing shortage in Burnaby-Edmonds in particular?
Hon. R. Coleman: First of all, Hillside Gardens is 162 units of market rent where we changed the model to rent-geared-to-income — 60 percent of that — and 40 percent of it to market. We increased the subsidy to the project, and we're rebuilding eight units destroyed by fire that are going to be ready this summer. Those will be made available to larger families from within that development. We don't differentiate between whether they're an immigrant family or a non-immigrant family, because that's not one of our criteria.
SUCCESS manages the building. They have a good array of support programs for immigrants, including that project.
Just for the member's information, in Burnaby there were 4,909 units of subsidized housing with an annual subsidy of $18,562,550. There are 683 seniors households getting Shelter Aid For Elderly Renters, which is the SAFER program, which is $1,436,582 a year.
There are also an additional 678 families, and this is where I would suggest that the member send people to actually apply, as well as to the rent assistance program.
There are 678 families in Burnaby receiving rental assistance, at a total cost on an annual basis of $2,943,830. There are a very small number of units under development in Burnaby for very good reasons. The total number of units in Burnaby is 6,412, for a total annual subsidy of $22,942,962.
R. Chouhan: Well, I appreciate these numbers, but obviously, these units are not enough, because the community is growing. More and more people like to live there, and we do face the challenge to accommodate those people who have decided to live in the Burnaby-Edmonds area.
Now, the lack of affordable housing, as we all know, is connected to increasing homelessness in Burnaby. I'll give you a couple of examples. There are many, but let's deal with just a couple of examples here.
I have a female constituent who is a victim of crime. She is currently receiving therapy through the crime victim assistance program. She's also a person with a disability receiving income assistance. Due to a lack
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of income, her options for affordable housing are very limited. She can't afford current rental rates because she doesn't have a job and is a person with a disability. Landlords do not want to offer her tenancy.
For a person like that, what kinds of options has she when she can't find housing because she's disabled and a victim of crime? Is there anything available for a person like that?
Hon. R. Coleman: This is not a community, Burnaby, that does anything innovative in housing, that finds any cooperation with any government with regards to actually creating any opportunities for housing. It does not do anything that would be innovative with regards to coach houses and basement suites and other opportunities in housing in this community at a local government level.
The affordability factor and the availability of product are not just driven by somebody like government going out and building social housing. It's also driven by the availability of product. The availability of product can come if a municipality looks at densities, looks at innovation and looks at opportunities. They are not known for that.
We have actually been trying for two years, with money we've committed, to put a shelter in Burnaby. Every single site we've identified has been turned down by the municipality, not by us.
If you want to look at opportunities and innovation, take a drive to Clayton Heights in Surrey, where you will find coach houses behind homes, and you'll have homes with basement suites — a neighbourhood that used to have an affordability issue where today young families can buy a home and have extra income when they can rent it out to someone like the person you described.
Rents in that area of Surrey used to be $1,250 a month for a two-bedroom basement suite or a suite. Today it's $850. The reason? Because that municipality decided to bring innovation and density to housing to create a solution on the ground in their community.
If it takes two years to try and give a site to a community that we're willing to pay for, for a shelter, imagine how difficult it is to justify building certain projects in that community. We had a project in that community a few years ago that actually made us spend between $25,000 and $50,000 for a car wash bay in a project for people that were paraplegic and quadriplegic, and they wouldn't even forgive that type of cost for that population.
There are times when local government has to step in. I know. I've heard the comments from Burnaby — that they have no responsibility for any of this. So it's everybody else's problem. That's fine.
We have a rental assistance program that has 668 families living in that community who we've subsidized to live where they live. Another 600-plus seniors in that community get subsidized where they live. If there was more product for them, we could subsidize more seniors or more families, but the innovation and density cannot be created by the provincial government. The ability to zone and develop land for these purposes…. When you don't have that cooperation, it makes it very difficult for us to perform.
I'll tell you what happens, Member. We have Vancouver come and say: "We've got 12 sites we will give you for a dollar. Would you please build some supportive housing for people that are homeless with mental health and addictions? We'll provide you with a building and a site for a shelter. Would you come and put in the supports and pick a society to do that?"
Down the road, adjacent to Burnaby and New Westminster, we have the College Place Hotel. We bought it as an SRO, renovated it for people in that community for these types of uses and had terrific cooperation from the local government.
We just don't have that here. I can't tell you why or why not, because it's not like we've ever done anything to not, you know, engender the cooperation.
As a matter of fact, when you are sitting and saying you'll actually spend the money for a shelter and for two years you go looking for sites and you keep getting them turned down, there is a point where you say: "Well okay, we're not really welcome there. But Vancouver wants it. North Vancouver wants it. Surrey wants it. Langley wants it. They're working with us. Maybe we should wait till Burnaby is prepared to help us find a site and find some solution, do some innovation for their citizens so that we can be there as a partner."
We're always willing to be there as a partner with any local government that wants to work with us. But in this particular case this does not exist in a relationship in that community.
R. Chouhan: Well, thank you for that answer, Minister. I understand and am aware of the challenges, or whatever you want to call it, between the Ministry of Housing and the municipality of Burnaby — or lack of communication. I don't know what the problem is there. But today we're talking about the government of B.C., the Ministry of Housing here, so my questions are directed to the minister. That's why I'm asking these questions, and I appreciate his insight.
[H. Bloy in the chair.]
I'll give you another example. You know, these are the challenges that I, as the local MLA, am facing in Burnaby. There's a single mother with three teenage boys, and one of them is autistic. They live in a two-bedroom basement suite — not enough space for three teenage boys, obviously. The mother is also on income assistance, and she receives $886 per month. Her rent is $900.
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She has applied for B.C. Housing but again has been told that she has to be on the waiting list, which, we know, is a long waiting list. She's in a desperate situation. She has no money to buy food, not enough to cover rent. She wants to work, but she's unable to because of depression that she's going through and the stress, too, of finding money for rent and food and dealing with an autistic son.
My question, again, is: are there any plans to deal with or to find housing for people who are disabled and for a person like this which I just gave you as an example? They're in a very desperate situation. What are the ministry's plans to build more housing to accommodate disabled people, especially those with mobility issues?
Hon. R. Coleman: The first issue for that is: provide us with the information on the individual. I can't really deal with individual files here today, but we can certainly look at it.
The challenge sometimes…. I often find that once we peel back the file, there are some issues. One issue may be that they don't want to move out of a specific neighbourhood or a larger neighbourhood in a community where we don't have any product available. So there's no opportunity to provide them with housing.
The other issue could be issues in and around, you know, what they really want to have and what they will accept and will turn down with regards to affordability. There's always that challenge whenever we try and deal with a specific issue. So if the member wants to provide my office with that information, we'll look into that specifically.
We're right now building 1,305 units of seniors and disabled housing across British Columbia at a cost of $120 million a year. We're building another, somewhere around, I think, 1,500 units of housing for people with mental health and addictions across British Columbia, in communities all across B.C., to a cost of about $260 million, in communities where communities have come forward and said that they're prepared to work with us and provide land and even forgive, you know, some densities or parking or these development cost charges and those sorts of things.
We believe that it's an important partnership between us and any community that wants to do that with us. So that's what we're doing. We are building.
We're not building a bunch of family housing, because we have a rent assistance program. The rent assistance program is there for people with low incomes. As a result of the rent assistance program and the improvements to SAFER and the rent subsidies put in for the homeless issue, our wait-lists have gone down well over 50 percent at B.C. Housing. So we're now able to actually manage our stock better for the folks that the member describes.
The challenge is that I may have a vacant three- or four-bedroom unit in Aldergrove in a townhouse, but the individual family says: "I don't want to move there." I can't house them there because I can't move the house to Burnaby — right? So each one is an individual case.
We're happy to look at the individual cases and see if we can work with the family to find solutions. You may find, as we do sometimes, that it's a case of: "I don't actually want to move from here, from this area." And if we don't have product, then it's a challenge to say: "Well, we don't have anything here that we can even put you on a waiting list for." Those are the challenges that we face.
What I like to do with MLAs, and I do it all the time with B.C. Housing, is to take individual cases and look into them individually and see if we can answer the questions that you have and see if we can find the solutions.
R. Chouhan: There must be some provincial land in Burnaby which can be used to build this affordable housing. You know, I'm sure that there's plenty of land in Burnaby that is owned by the province. There must be some land owned by the province of British Columbia in Burnaby which could be used to build these housing units there.
My last question. There's a successful, community-based employment initiative that has emerged in New Westminster. It's called I's on the Street. It is a program that has homeless people — some with mental health and/or addiction issues — who are here to do street cleaning. It's very similar to what the Hastings North Business Improvement Association is doing with Coast Mental Health.
Could the minister consider piloting this kind of program in Burnaby with the support of JobWave and financial incentives such as the volunteer incentive program?
Hon. R. Coleman: If the member wants to send me information on the program, we'll look at it. It's not really a program that I'm familiar with, other than that I did meet with a group from New Westminster recently that has put strategies together that are pretty innovative for housing and homelessness in that particular community. Again, it is a community that works with us.
You know, Member, even when we might find land…. Here's the example. We were two years trying to put a shelter in your community. Yet people come from Burnaby all the time and ask us: "Would you put a shelter here?" We say: "Well, we've been trying for two years, and every site gets turned down." So I don't have an answer to that.
I think that one other thing that this community should know is that you actually have a casino in that
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community sitting at Highway 1. There's $56 million plus in revenue sitting in the bank from that casino in that municipality. So you'd think that they could find an innovative way to do something with some density or something for some social housing with government, but they refuse to work with us.
I'm not critical of them, to be honest with you. It's their choice — right? It's their choice to make those decisions as to how the council does their business on their land use and their business in any municipality. We as a provincial partner are there to be partners with communities. The Premier started this, made it clear at the UBCM convention — I think it was in 2006 — that we would come and work with communities that would have land or forgive densities or help us with things to reduce the costs so that we could deliver more housing across the province.
Tons of communities across B.C. have taken up that challenge. It doesn't matter whether it's Campbell River or Nanaimo or Victoria or Richmond or Vancouver or Surrey or Abbotsford or Langley or Maple Ridge or Chilliwack or Penticton or Kelowna or Vernon or Prince George or Kamloops — all of those communities and more.
Yours doesn't. It's their choice. We'd love to be able to have a shelter for people who are homeless in that community, and we've had the commitment sitting on the table and tried for two years to get approval and can't get it done.
N. Simons: Yes, indeed. Well, it would be nice if we addressed the homelessness issue without having to resort to setting up new shelters, but that's another issue.
Minister, I'm hoping that I can ask some questions about the Homeowner Protection Office. Specifically, a constituent of mine has had some serious issues with respect to his home and the construction that led to serious problems with the envelope. Al Chambers, and I'm sure he's written to both of us, wrote about concerns about getting independent assessment of the problems with his home. He's had to pay a lot of money out of his own pocket in order to finally get a resolution on the faulty building.
I'm just wondering. How often do these kinds of complaints occur with a single-family home? How often do complaints arise from constituents from this province about the Homeowner Protection Office in this regard?
Hon. R. Coleman: I think your letter…. That's what I was reading, the letter that you sent me. I haven't had a chance to read the rest of the details, so I will. It doesn't happen often. Most people are pretty good builders in this province. I don't know the details of this one, but often there's a misunderstanding about who is responsible.
The Homeowner Protection Office licenses builders — right? A person pays their licensing fee and, in order to be qualified to be a licensed builder in B.C., they have to have a third-party warranty provider. A third-party warranty provider is like your car insurance. That's basically a warranty that is now insured by a third-party warranty provider. When a house is turned over, that's where it is. The Homeowner Protection Office doesn't have any involvement in the insurance relationship with that warranty, so that's where you end up with a dispute over what was insured and what was not.
Now, today we have a 2-5-10 warranty — two years on, basically, construction stuff; five years on water egress; and I think it's ten years on structural, or something like that.
We are doing some work. As you know, we've just brought the Homeowner Protection Office from the Crown corporation, where it was existing, into B.C. Housing, to actually have an integrated approach to some of these issues.
In response, to some industry leaders and consumer groups there is some concern to increase some of the professionalism on the building side of residential construction, so we're doing some work on that now. We're going to review the results of trying to come up with a minimum qualification process, what that might look like and what makes sense. The guys that really do have to have responsibility here are the people that are collecting the insurance premium, that they're actually guaranteeing and warranting these homes. They collect the premium, and they're supposed to take care of the insurance.
So when what the member describes takes place…. It looks like this one went right through a court process, so of course, I'm not familiar with the court process. That was just from the one article that's here that I haven't had a chance to read. Really, I can't comment on this specific one, but I can tell you that we're working to try and improve on some of the standards and the licensing and the rigour so that we can make sure it's good in the future.
I've been through this recently when I bought my own home a few years ago. I know that there are some challenges with deficiencies and stuff, and sometimes a discrepancy between a homeowner, what the deficiency is, and what the builder's deficiency is, and then it goes to the warranty provider at some point in time.
The experience is that you can usually work through these things, but sometimes you can't. Sometimes you have a situation like what the member describes, which is really not acceptable, and I think that's what we have to look at as we move forward on some kind of consumer guide and information.
N. Simons: Yes, indeed, it was a nightmare for my constituent, and he seems to indicate that the relationship between the warranty provider and the builder is
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potentially the root cause of the concern. What is a consumer to do when the builder and the warranty provider agree but contradict the homeowner's claim to an envelope problem, for example? He had to spend about $3,500 to get an independent builder to come and actually make it very, very clear that the structure he had had built was not up to code.
I'm wondering if others have brought this, what could be seen as a bit of a conflict, to the attention of the ministry. If so, are they contemplating any changes at all to regulations that would protect the consumer in these cases?
Hon. R. Coleman: We're actually dealing with licensing standards now and working through that with industry and with our people since we brought this into the branch. We also have meetings scheduled, and we're working through with the insurance companies to establish some effective third-party dispute resolution processes.
I'll give you a couple of stats. I'll read them into the record even though they were in a letter I sent back to you on February 11. In 2009 there were over 256,000 new homes covered by home warranty insurance. Of these homes, 71 owners contacted the Homeowner Protection Office with their concerns.
The warranty providers report to the HPO on their claims actively, and the HPO posts that information on its website for the public to review so that people can see who's actually not performing. I guess that would be the best description.
Of the 3,392 claims received by warranty providers in 2009, 221 were found to be not covered by the home warranty insurance, 25 went on to mediation, and eight went into litigation. The majority of claims were resolved by the original builder under the warranty provider's direction, which is usually what happens. The warranty provider will basically say to the builder: "You fix this, this and this, because this is on the deficiency list." If they don't do it after two years, then they say: "If you don't do it by such and such a date, we'll send in the contractor to do it, and we'll charge it back to you." That's what they do.
Unfortunately for the member, that doesn't give you the answer to your question: what does this couple do, this family do — your constituent? I'll have a little bit of another look at this in maybe a bit more detail. I suspect that we have a situation where the parties disagree, and I can't get in the middle between an insurer and a homeowner and a warranty. Certainly, there is concern when people don't get the experience they're expecting when they're wanting to build their dream home, and I think that's a legitimate concern for everybody.
N. Simons: Just to clarify, Mr. Chambers of Gibsons did receive a settlement. It did take quite a long time. He expresses a concern that I think would be shared by others who would be in this situation. If you don't have a lot of financial resources to engage in litigation or a battle, you expect that the Homeowner Protection Office would protect homeowners. In his case he found that somewhat lacking.
I don't want to generalize and say it's always that way, but he certainly did run into problems. If only 71 contacted the office per year — if that's their caseload, in fact — he wonders why it would have taken two months to even have a response to his concern. I just wanted to put it on the record that it's something that I think we need to be watching closely to make sure that homeowners are protected in fact, not just in words.
I'm glad that the statistics you indicate seem to suggest that most people eventually find resolution. My comment in that respect would be to hopefully be able to protect folks like Mr. Chambers from that kind of problem in the future.
The other question. I had an elderly gentleman enter my office and talk about the fact that his condo was suffering from some envelope problems. He's on a pension, on a fixed income, and he's living on reserve, on leased land. He wonders — and he hoped that this scenario would be presented — how a person in that situation, who is on a pension, who's in his late 70s, who needs to make necessary repairs to his home…. How is he expected to financially manage that now, with the disappearance of the program that would provide some financial assistance — even if temporary and repayable?
Hon. R. Coleman: First of all, the first part of your comments, before your question on the second individual. That's why we're sitting down with the insurance companies to come up with an effective third-party dispute resolution process, so we can keep people out of the more expensive option that your constituent went through.
On the other one, I would actually need some details on the age of the building and how long the lease is for — some of them are more bankable than others — what the fixed income is and when the leaking was identified. This was supposed to be a ten-year program, and it ran almost 12 years. It was supposed to be $250 million, and it cost almost $700 million. In the time frame that was identified at the beginning of the program, any buildings built under that envelope period should have had their egress problems identified long before the program would have sunset.
There are options for someone like you describe, and I would suggest that you may want to provide the name or have that individual phone the office. It might be
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more helpful if you provided it directly to us so that we could follow up. With a senior on a fixed income, there are other financing options and stuff that we can help them with. We think that we can work with some of these people through these issues, but it really depends on the details. Each case is so much different, and it's hard to solve this one in this discussion. We can certainly, if we get enough information, follow up the details for you.
S. Chandra Herbert: Thank you to the minister. The question that I have — and it won't be a surprise, since I've been asking these questions since I first joined this House — is related to renters. Certainly, many of my constituents are renters. The question is specifically: is the minister considering changes to the kind of modified rent control situation that we have in British Columbia today, and if so, what are they?
Hon. R. Coleman: There's actually nothing going on right now, except that we're looking at some of the fundamentals of the relationships that exist with regards to residential tenancy. We're trying to see how we strike a balance between the issues that are faced by landlords who are seeing excessive municipal tax increases, water increases and those things — similar to what are allowed to flow through for manufactured home parks versus what can't flow through in residential tenancy in the non–mobile home parks.
Other than that, there's some other work being done with regards to some other things we've reviewed that come to us from both the tenants organizations and the landlord organizations. There's nothing specific that I could tell you is imminent today. I expect to see some stuff in the next, oh, four to six to eight weeks. Maybe we would see some things that we might take forward with regards to regulations and stuff, but there's still a lot of work to be done at the branch before we get there.
S. Chandra Herbert: Well, the minister will know that I've raised concerns many times about renovictions. He knows that I've raised many concerns about geographic area increases.
I know that in my constituency we saw an application for a rent increase of 73 percent. That was brought down to 38 percent, but it's now caught up in the courts partially because of what happened in that specific case in the residential tenancy office. I know there is a range of concerns that have been raised about the practices at the residential tenancy office, which have ended up in the courts.
Again, specifically my concerns are the geographic area increase and the renovictions. Of course I'm concerned that rents continue to rise at a rate higher than we've seen people's wages rise. I've spoken to the minister about this before. He indicated that he would consider dealing with these concerns with renovictions and the geographic area increases.
With those two specifically, can the minister share with us some of the thinking to stop the problem of people being evicted wrongfully and to stop the problem of people being forced out of their homes because of massive rent increases that they can't in any way afford?
Hon. R. Coleman: I know we did some stuff operationally, internally, but our complaints with regards to what the member describes are way down. Actually, in your area we can't remember any recent ones.
There's been a Supreme Court ruling with regards to the Seafield. That has been directed back to have the rental tenancy branch rehear the issue, but we can't rehear it because neither one of the parties have actually filed with us to begin the process. It'll basically sit in limbo until one of the two parties actually files, because we don't initiate that process. It's just that they're now told that it would have to come back to us for a rehearing versus the courts giving them a decision. So we just have to wait and see what happens with that.
I do know that some of the education stuff and some of the other work we've done, work with landlord and tenant groups, has actually improved some of the other issues the member described.
S. Chandra Herbert: I'm just thinking about the comments the minister made after my first question, about the flow-through of cost increases on landlords, flow-through, I guess, to tenants.
I'm curious. I know there are provisions in the current Residential Tenancy Act which would allow for those kinds of things to be flowed through, not in the base rent, the rent increases — that kind of thing. Why is that provision not sufficient for these kinds of unforeseen increases which wouldn't be caught up in the general rent increase?
Hon. R. Coleman: Maybe the member…. I didn't say we were doing anything, just that we think we have to look at the issues that are presented to us by both sides. One of the issues presented to us from the landlord side is that for something like property taxes, for instance, unless you're operating at a loss, it can be flowed through as a cost. Yet that sometimes is a tipping point for properties.
You and I have had this discussion before. The biggest challenge in residential tenancy and in this marketplace is to strike the balance where you don't lose so much product that you'd have a rental issue where people can't find a place to live versus the balance being struck because somebody says: "Okay, I'm getting out of the business" or "I'm demolishing."
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We've had this situation in the past. Or the buildings go to a place of quality because they're not reinvesting in them because there's no opportunity to actually cover their costs, so they just don't reinvest in the building, and then the quality of life for the resident goes down.
There has always been this sort of balance we tried to strike. Successive generations and decades of governments, I think, have tried to strike this balance. You do come across little, unique issues over time that need to have a second look with regards to the issues. What we try and do is keep an open dialogue with the branch between both tenant groups and landlord groups and look at their issues. We don't always agree either way on both sides, but we do at least try and work with them to find solutions.
The member is right. There are some things that can be flowed through in addition to the base rent, but they have to go through a process. The argument on one side is, "That process takes too long and is too onerous, so why can't you streamline it?" and on the other side is: "Don't give them any flexibility to do anything."
I remember sitting almost where the member opposite is sitting back in 1996 and having a discussion with the then Attorney General, who told me that he didn't understand. He actually told me he didn't understand residential tenancy when he was in law school, and he hoped he could learn something that afternoon. I remember having the discussion about how we had to somehow strike a balance in this thing. Otherwise, we're going to have a rental shortage in British Columbia. My predictions actually came true over the next decade because we didn't build new rental product.
Somehow we have to find a way to incent the marketplace to build new rental product. I know the member and I have had this discussion too. I don't know if he has written the federal government yet. I know that every opportunity I go to a housing meeting, and I say: "Why don't you guys do something like they did with the MURBs and create some incentive on the recaptured capital gain so that people could find a way to reinvest and we could create more rental housing?"
What we do have in B.C. is a very large amount of stock that is probably 30-plus years old. There's not a lot of stock that's ten years old or less, unless it's something in new innovative subdivisions that allow coach houses and basement suites and that sort of thing.
S. Chandra Herbert: I'll just finish up on this. I guess the concern I have is that this government, I believe, has focused very largely on one side of the equation. The balance hasn't been met. The minister will know that's my concern and the concern of my constituents, who right now tell me that there has actually been a buying spree of buildings, that it's not a concern that nobody wants to run these. Everybody is getting out of the business.
In fact, the properties are sought after and purchased, and the legislation that exists today has been used to push up rents in just about every way possible. I would agree definitely that there hasn't been rental stock built. I think the MURB issue with the federal government is one of the big ones, if not the biggest reason why there hasn't been that.
I don't know if it's the fact that there's no profit in it. Certainly, the companies that I have talked to are doing very well in the West End in terms of there's no vacancy or low vacancy, etc. I'm very concerned that the solution we're going to see here is an increase in rents allowed on renters when we've already got some of the highest debt loads in the province. We've got continuing challenges with people getting evicted from their apartments, pushed out onto the street and adding to the homelessness crisis because of that and because of the loopholes in the legislation as it currently exists.
I know my colleagues have other questions, so I'll leave it at that.
C. Trevena: I have just a couple of questions for the minister. It's about the memorandum of understanding and agreement to build second-stage housing in Campbell River for the North Island Transition Society. Back in 2008 there was an agreement to build two sets of housing in the town. One was Nikola Road for the Campbell River Association for Community Living. The other was for the transition society. While the Nikola Road is now moving ahead very quickly, the transition society has pretty well reached an impasse and needs to get it kick-started. I'm wondering when we can expect the moneys to come through.
Hon. R. Coleman: I know that the member wasn't in here earlier when we talked about the MOU commitments and the stages we're going through with the funding from government. The first building was in the first phase of the funding that we had. We're now working on the second phase of the funding, which we expect to have nailed down for all the MOUs.
Our commitment is to do all the MOUs we have in B.C., and that's one of them. We're probably going to be in a position to move relatively quickly on this. We're just finalizing some issues with the Ministry of Finance that we have to go through on a process basis.
We basically have the support and commitment to go ahead, but we do have to quantify our numbers and make sure that everybody is happy that our dollars and our actuarials and our quantity surveys and all of that stuff are right. But we're very close to moving on that one.
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C. Trevena: This is very good news, that we are close. I wondered if it's possible to give any indication of timeline. As I say, the Nikola Road one, they got all signed off. It was all ready to go as of April last year. And the Dogwood one, the transition house, they were hoping that it was going to be the same time frame.
In fact, they were hoping to start building by October last year. So if there is any indication of what time frame they can look at, because they've got everything basically backed up until they get the moneys coming through. Everything is on hold, and all their plans are just ready to go. They just need to know when they're going to get that money.
Hon. R. Coleman: I've learned in government that we get all our work done, and then we're in the hands of others. At this point in time we're in the hands of others. I don't think there's going to be any difficulty whatsoever. It's just a question of when the meeting that is going to be scheduled can get scheduled within the next few weeks, and then it'll move on from there.
C. Trevena: I thank the minister, and I hope that he'll be up in Campbell River to announce the opening very shortly.
D. Routley: I understand that this may be difficult for the minister to answer, given the staff who are in attendance today, but I'd like to ask him a few questions about the integrated case management system that's being considered, if that's possible.
Hon. R. Coleman: We can try.
D. Routley: Okay. The obvious privacy issues have been brought up by a number of stakeholders in the province: the freedom-of-information association of British Columbia and also the acting Privacy Commissioner, Paul Fraser, in his submission to the committee reviewing the Freedom of Information and Protection of Privacy Act.
What does the minister think of those concerns? Does he consider them to be valid? If he does, what steps does he envision taking in order to continue to protect the privacy of British Columbians?
Hon. R. Coleman: We actually canvassed this with your critic yesterday for a period of time, with the person that's responsible for the integrated case management system in attendance. She's left the building as of yesterday, but that's okay because I can remember most of it.
We have a pretty old system right now. I imagine the member is aware of that and has heard. It's probably over 30 years old. It doesn't have the capacity to do the job for our clients as far as being able to integrate information across so that we can give the right services to people.
We really do have to replace the system because it has a risk every month. First of all, when the cheques are being done, we actually have to put the system down, on hold, just to do the cheques for social assistance because it doesn't have the capacity.
It's also a very old system, one that is so old that there are only a few senior bureaucrats in government that actually know how to maintain or fix the system. It's gone past everybody else's maintenance schedule, whether it be any of the service providers out there. So it's an interesting conundrum that we face.
What the integrated case management project is about is to fix that and to have integrated case management information so that it's more seamless and we don't have as many paper files and we can share information specifically the way it is.
We are aware of the privacy concerns. I think the recent comments publicly were a little bit, frankly, over the top on what we're actually trying to accomplish, because I think that there was a lack of understanding by the person who wrote one of the articles. It's being designed with information privacy as one of the cornerstone objectives within the system and will contain a number of features, such as role-based access for workers, thus restricting access to information only to those who need it.
It actually means that you have it password-protected. If you are the clerk, level 1 — or whatever the description is — this is your access. You're not able to go beyond that access because that's what you need to do for your daily work, and you don't get to go into the system for the rest of it. It's actually better protection than the old systems probably provide today.
It gives us enhanced audit abilities to make sure that the system…. We can electronically audit the system, its usage, its time and all of those things, so in actual fact, we can make sure the abuses aren't there. It has multilevel security capability so that we have the security to protect the information.
It's very important to us that the system will provide us real-time access to existing information, but it will be very much password-protected and job role–protected so that we're actually achieving what the member has outlined.
D. Routley: Has the ministry conducted a privacy audit of the plan?
Hon. R. Coleman: We do privacy assessments at each stage. We're in the very early stages of the system, so we will do a privacy assessment as we get through the first phase. Then we'll do an audit of that. Then we'll move on to the next phase. We'll do privacy concerns working through that phase and make sure that the audit is there for privacy concerns on each stage.
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This is a $181 million project that has a number of phases to it. It's going to take some time. We're at the very early stages, where we've identified the software. We've made an investment in some providers. At each phase we are assessing the project, not just from the privacy issue but also from the functionality issue, because we want to make sure we're getting what we need as we build this thing.
D. Routley: One of the themes in Mr. Fraser's submission to the committee reviewing the act was that the notions of privacy protection, as represented and described in the act, are not outdated. The act, he argued, was not outdated, but the application of it has been challenged.
He suggested that in fact the training level within the public service, where it comes to dealing with documents and with people's privacy issues, is where there's a real falling-down. Assuming that he's at least somewhat correct in that, what kind of training programs exist in the ministry now to train staff to deal properly with the privacy act?
Hon. R. Coleman: We've moved from ICM to a different question, I take it. The question doesn't relate to the ICM project as much as it does to training for staff.
There is a very strong training component in the ICM project for the staff on its procedures and forms and all of that at each phase as we come through it, as we build the system, but we also have ongoing training in the ministry today with regards to management of forms and what have you. We have confidentiality agreements signed with our staff, and we remind them of those on a regular basis to make sure that they know their responsibilities. By doing that, it gives us a pretty high level of staff professionalism.
This is a ministry where employees deal with well over 100,000 clients and offices throughout the province on an annual basis, so the risk of breach is only minimized through training and professionalism, which is what we work at — continuous improvements to procedures and training. We encourage our folks to tell us how we can improve things, because that's a very important part of our operation.
Giving regular reminders to staff of their professional and personal responsibility regarding the protection of information in their care is a regular process within this ministry, and the instruction of staff on how to handle any personal and sensitive information is very important as well, because we have sensitivity around our clients, as you would well appreciate, I'm sure.
They're trained to report, in addition to that, actual or suspected breaches immediately so that any appropriate action can be taken to limit information exposure, because we don't want that to happen either. So it's an ongoing, rigorous process within the ministry on a regular basis with our staff.
D. Routley: I think the question was still related to the ICM in a sense. Perhaps integrated case management represents an attempt to handle information, personal information, in a more efficient way to government's goals and the public service's goals that could impact people's privacy if we lose sight of our role under the Protection of Privacy Act.
In order to illustrate what I'm saying, maybe I could tell a little story that Mr. Fraser told the committee. He told us about two moose hunters who had bagged a moose out in the bush. They were dragging that moose back towards their truck by the hind legs when they encountered a wildlife officer, who asked them if they had licences, and indeed they did.
He talked to them a bit, and then he observed their lack of progress and suggested that maybe they should get on either side of the antlers and pull the moose that way. So they did that. After making tremendous progress, one of them said to the other, "Boy, that guy was really right. You know, we're going a lot faster," and the other one said, "Yeah, but we're getting further and further away from the truck," because they were dragging the moose the wrong way.
I think that ICM poses that kind of a risk to the basic intent of privacy protection. If we lose sight and if we assume that the obstacles that we see in the Privacy Protection Act are simply obstacles and not values, then a system like ICM can have us dragging the moose very quickly in the wrong direction. That's why I would say that the questions are related when it comes to training staff to observe the privacy act.
That being said, if I could switch to one basic question about housing issues in Nanaimo. I wonder if the minister could share with me any plans for low-income or optional housing in the Nanaimo area.
Hon. R. Coleman: While they're digging up some information on Nanaimo for me, I will first of all tell you that I heard that joke in Canmore, Alberta, in 1974. I don't know whether that dates me or….
Hon. R. Coleman: I was stationed in Canmore. It was actually my first posting when I came out of Regina.
I do want to answer the ICM part of this question, because first of all, I really do think that it's important to emphasize…. I wouldn't want anybody reading Hansard to think that we do not emphasize how important privacy is to our staff and how important it is that they do.
I also wouldn't want anyone to think for a second that I don't believe my staff are professional and do the best
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they can for the protection of privacy of our clients. If you look at the history of the management of this ministry, these people are very, very good at what they do. They have a tremendous emotional heart for the people that they serve in very difficult circumstances, and they protect their information and their privacy.
I think that's important to know, because sometimes the written word would say, "The question was this," and I don't want to leave for a second the thought that we don't pay attention to and train and improve on privacy.
The next time I see Mr. Fraser, I'll remind him of the joke.
However, with ICM we have a comprehensive security privacy plan for the entire project, which incorporates the best practices and addresses security and privacy at multiple levels, at all levels, including people, training, their roles and responsibility, processes and technology, password authentication, and network and application security controls.
As part of our changed management plan, staff will be trained on new business processes as well as the new technology and upgraded on their information-and-privacy information. This will incorporate privacy and information-sharing roles and responsibility within that context as well.
As a standard practice for all new systems in government, formal reviews are completed prior to implementation — i.e., the privacy impact assessment, threat and risk assessment, and risk and controls. These assessments are conducted throughout the life of the system when functionality is enhanced or expanded, to maintain the overall security and privacy and concern with regard to information.
First of all, I'm going to give you a community scan for Nanaimo. Nanaimo has existing subsidized housing of 1,299 units. The annual subsidy in Nanaimo for those units is $5,153,740. There are 433 seniors in Nanaimo receiving Shelter Aid For Elderly Renters support, for a total of $655,644. The rental assistance program in Nanaimo serves 269 families, at an annual cost of $1,070,703. That's total units under subsidy of 2,011, for an annual subsidy of $6,880,087.
We have two projects under construction in Nanaimo that are being done with regards to certain capital costs that the funding is committed to. One is the Canadian Mental Health Association, mid-Island branch, at 437 to 445 Wesley Road. Then the second one is at 447 Tenth, which is the Tillicum Lelum Aboriginal Society, and that's a $3 million project.
In addition to that, there are three other MOUs that are presently in process with regards to financing to also be done in Nanaimo as part of our commitment to complete the MOUs that we've signed with municipalities.
D. Routley: Thank you for that detailed breakdown.
I guess we've kind of bounced from issue to issue. But going back to the privacy issues and training, it's obvious, I think, that the public servants of British Columbia are committed to their work. We appreciate their service. That can't be stated with any kind of qualifier, so I'll end that sentence.
The recent Wainwright scandal, what's become known as the Wainwright scandal, the loss of files and compromising of personal information, really challenged people's confidence that government can adequately protect their privacy. Well, 747s can still crash, despite all the technology and all the protections and redundancy and safety measures that are brought to bear, if there's human error. Clearly, there was a falling-down that shouldn't be ascribed to the good public servants of British Columbia.
The reports on that incident do point to a lack of coordination within the ministry when it comes to dealing with privacy breaches — that there were measures that should have been taken as basic measures to cope with the privacy breach which weren't taken; that there were information dead-ends, as the report phrases.
I wonder if the minister has taken any of the recommendations and criticisms from that report and applied them to operations of the ministry when it comes to training and adapting the systems of the ministry.
The Chair: If I could just remind the member that when he referred to a specific case, I believe that it's before the courts.
Hon. R. Coleman: I didn't know if the member was aware that the individual was just recently charged with regards to that.
I don't know — not in relation to that particular individual — if the system can ever completely protect against somebody who has bad intentions and wants to work at having bad intentions with regards to working in any environment. We certainly try to hedge against that.
We have been implementing a number of the recommendations coming out of that particular experience within the ministry. We also have a subcommittee within the ministry that's working and looking at all privacy issues and reminding staff of their responsibility. We will be implementing the recommendations that come out of the report that Citizens' Services will complete on, I think, the 29th of April.
S. Simpson: We've got a small number of housing-related issues to get through. I sent a note to your staff that we'll get through a couple of these and may have to, if it's possible, finish this off in a short period of time tomorrow morning and then move on. I've had some
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conversations with Mr. Ramsay with regard to that. I'll try to move through these relatively quickly.
The first issue is around the strata changes that were made. In those changes, I know that there were a number of pieces that were to be done by regulation. Could the minister give us some advice on the status of the implementation of those regulations? What's still outstanding in terms of regulations to be put in place? Well, maybe we'll just start there with what is outstanding in terms of regulations that haven't been completed.
Hon. R. Coleman: Everything has been done on Bill 8 with the exception of about three things, and those three things are going through an extensive consultation with strata corporations and what have you.
The most significant amendments relate to the dispute resolution process available to strata corporations. They include: (1) improving the arbitration process to provide a workable, inexpensive alternative to going to court; (2) establishing mediation as a new option, including the power to require that certain disputes be mediated; and (3) allowing more strata property disputes to be heard in small claims court instead of in the Supreme Court. Those are being consulted with the particular strata organizations and what have you over the next while, so those regs won't be developed until that consultation is complete.
The other amendments that will also go through the same process are the ones that include fiscal accountability by requiring depreciation reports and audited financial statements in clarifying special levy rules. Those will also go through the consultation process before the final regulation will be developed.
S. Simpson: Thanks to the minister for that. I'm glad that there's a consultation process.
Could the minister just briefly give us a sense of kind of what that consultation process entails? In general, what are we talking about here? Consultation can mean a lot of different things.
Hon. R. Coleman: Some of them will be face-to-face consultations. Some of it will be web-based consultation. It will be very open with strata organizations and those that want to give us the feedback. We're actually working right now, before we even go out with it, on some scoping to frame questions so that people understand the issues and then frame the questions that they can respond to and get some response.
As that's going on, at the same time we'll be working with the Attorney General's office to deal with the small claims issues and how we can deal with the dispute resolution stuff as the consultation comes through so that we can bring the two together and then create the appropriate regulation.
S. Simpson: Just one last quick question on this sector. Can the minister give us some indication of when he anticipates his ministry being able to kick that consultation off and start to actually get out talking to people? I'm hearing from them fairly regularly.
Hon. R. Coleman: On the dispute resolution side it's going to take longer than on the financial statement and the special levy side. We anticipate having those ones done, working on that over the next couple months. The work with the AG's office will take a bit more time. We have to get all of that done so that we can take it out in a meaningful way for the proper feedback. So it's going to take a bit longer — probably, maybe, six months or more. So that one is going to take a bit longer.
You know, I've talked to different condominium owner associations and stuff. They recognize that, and they really want us to get this right because of the frustrations they've had over dispute resolution over the years. I think they understand that, and they're just happy that we've made the commitment to work with them and work them through it to get to where we think is the balance with the regulations. So that's our present time frame.
S. Simpson: I'm pleased to hear that. I know that when the legislation was brought forward by the minister the critique that I heard from the associations wasn't so much about the legislation, but it was some of the process issues. I think consultation was one of the big ones, and hopefully that gets remedied by dealing with the consultation now around regulation. If not, good luck to the minister getting those groups in the room to only talk about the things that he wants to talk about and not the things that they want to talk about. We'll see if the minister has any luck with that.
I'll move on to residential tenancy issues and a couple of residential tenancy questions. I guess at the outset, I'd say that I think…. I've talked to people who work in that sector, and I know that there have been improvements around some of the phone information access and those things where there was some criticism before. Certainly, those things seem to have improved.
One of the areas where concerns have been raised to me by people who work in the advocacy field around residential tenancy matters — and it's a concern they see both for landlords and for tenants; it's not exclusive to one side or the other — is the timing it takes to get hearings into play at the residential tenancy branch.
I'm being told that it can take a couple months or more to get a hearing. For lots of people that may not be an issue, but I think the minister would know that for people who are on a low income, particularly when a number of these can often involve things like getting security deposits back and those kinds of issues…. Those delays take some time.
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I'm just wondering whether there is some recognition that the timeline to get to hearings is a bit of an issue. Is there any work looked at to be done to try to shorten that timeline on getting RTB hearings on the table?
Hon. R. Coleman: I neglected earlier, when the member for Vancouver–West End was asking me about a residential tenancy question, to introduce Suzanne Bell, who is the director responsible for the Residential Tenancy Act.
I must say that this ministry has a number of difficult files — it can be — whether it be homelessness, mental health, addictions, housing, social services and others. I think that one of the toughest ones may be this one. It needs significant leadership from someone that leads the team. Suzanne has done a great job there for our ministry, under the direction of our deputy and staff. We're actually very pleased to have her, because she does a very good job.
On a direct request for non-payment of rent for a landlord, for instance, that direct request — because there are no dispute resolution issues — is about two weeks. The rest of it is a bit longer than we'd like, but it is better than it was, and so is our turnaround on a lot of files.
We are hiring about eight more additional dispute resolution officers right now, so we're in a hiring. When we get those folks in place, which will probably take two to three months, we expect that timeline to shrink down some more. Some of these files get more and more complicated, of course, so dispute resolution officers can be somewhat at a premium. We are getting more so that we can deal with some of the issues with regards to time.
S. Simpson: I know that that was part of the issue — some additional staff in place to be able to handle and manage those hearings. It really seemed to be mostly a case of more demand than there were time slots for people to be heard. If that helps to resolve that, that's good.
The second question here is one that there isn't an easy solution to. It's not a matter of residential tenancy doing anything right or wrong; it's a reality of our time. The minister will know…. He's talked about it before.
We talked about income assistance rolls and the numbers of people on welfare and that, and the number of employables who had decent jobs and ended up on unemployment through no fault of their own. They've ended up maybe on income assistance but many of them on unemployment or back working jobs that weren't nearly as good as the one that they maybe had at one point.
A lot of these people got into fixed lease arrangements around rentals. Fixed leases that worked for them back when they were making a good income don't work so well now. I fully appreciate that this is not a place where the government would usually go — contractual arrangements between individuals and building owners and that — but does the minister have any thoughts on how government can provide support for people who get into those fixed-term lease situations?
They, in all good faith, thought they'd be able to afford this and lost their income through no fault of their own because of where the economy went. They haven't been able to get back there and may not get back to there for a couple of years. They're in a bit of a box because of the lease that, at the time they signed it, made sense for them based on their income. Does the minister have any advice around that?
Hon. R. Coleman: We have no role. I think the member knows that we don't have any legal relationship with regards to residential tenancy. When there's a lease involved, it's between two people and is a business arrangement.
My advice to people has always been — in these situations where they hit a wall financially, when they have these things — don't ignore it, but go sit down with the person you had the business arrangement with. Explain the situation to them and ask if you can work out how you could either rewrite the lease — because sometimes, if there's an economic downturn, they want to keep the tenant, and they'll make some arrangements — or allow for a flexible sub-lease, that sort of thing. It really isn't anything that we get involved in at all.
We do it in our public education, I was just being told. Just try and make sure people understand that you've got to have a good relationship with people if you're going to go into a lease, because you may have this situation occur both ways.
We give the advice both ways. On a lease there are often times where the owner of the lease on the other side has an economic imperative, because he can get more and might want to come and extend it for a longer period to get an average across their costs, and they can have those negotiations too. We don't get involved in those at all.
S. Simpson: I don't disagree with the minister that this isn't a role for government. I guess if I was to make one suggestion…. I know that the public education folks have that, maybe without any prejudice of a role to play, and maybe it's done with some of the bankruptcy folks who are around and who provide debt counselling work as well.
Maybe if there was some thought to producing some kind of a brochure that simply gave people or offered people some advice or ideas about how they might engage or interact with the other party to deal with this
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matter if they find themselves in that box. But that's a matter there.
I think I'll ask one last question here, and then we'll be back here tomorrow — one more to get us out of here. I think it's a fairly straightforward question. It relates to the housing endowment fund. Simply, what is the value of the fund today? Are there any outstanding commitments against the fund?
Hon. R. Coleman: The value of the fund is $250 million. The annual returns on it are invested into housing projects on an annual basis, so there are commitments going out every year or two, whatever.
I think we'll finish that one tomorrow, though, as far as what it has gone into and what have you, because it will take us past the time. It'll probably take me five minutes or so to go through that, maybe more. It may lead to other questions, so it'd probably be just as well to canvass it tomorrow.
Noting the time, Mr. Chair, I move the committee rise, report progress and seek leave to sit again.
The committee rose at 6:43 p.m.
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