2011 Legislative Session: Fourth Session, 39th Parliament
The following electronic version is for informational purposes only.
The printed version remains the official version.
official report of
Debates of the Legislative Assembly
Tuesday, November 22, 2011
Volume 28, Number 6
Orders of the Day
Second Reading of Bills
Bill 7 — Regulatory Reporting Act (continued)
Hon. K. Falcon
Bill 17 — Finance Statutes Amendment Act, 2011
Hon. K. Falcon
Hon. K. Falcon
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TUESDAY, NOVEMBER 22, 2011
The House met at 10:03 a.m.
[Mr. Speaker in the chair.]
Orders of the Day
Hon. R. Coleman: Good morning, Mr. Speaker.
The lineup today will be second reading of Bill 7, intituled the Regulatory Reporting Act; followed by second reading of Bill 17, intituled the Finance Statutes Amendment Act. As we go through the day, we will get to Bill 6, which is the Personal Property Security Amendment Act, in committee as well as the Nurse Practitioners Statutes Amendment Act in committee and maybe even Bill 19, the Miscellaneous Statutes Amendment Act, in committee. We'll see how the day goes.
Second Reading of Bills
Bill 7 — Regulatory
M. Karagianis: I'm happy to resume my remarks on Bill 7, the Regulatory Reporting Act. In my initial remarks I canvassed the fact that regulatory reform has been one of the mandates of this government since the day they were elected. So I'm very curious as to why suddenly now, ten years into the process, we have this requirement to report out and to, in fact, embed in legislation a reporting act which seems in many ways to be a bit of a waste of legislative time and energy.
Reporting can be done by any minister at any time on the actions within their ministry, and so why we would need to embed this in legislation is a bit of a mystery. It does not escape the reader that there are some absurdities with this reporting act as well, because the details of the report, including counting out the regulations that are being either reduced or amended, will be determined through regulations. So one wonders: will those also be counted?
It seems like a bit of an odd and absurd bit of trickery here for the government to be trying to count the number of regulations that are removed from the books while at the same time instituting by regulation those that should be counted.
Certainly, we do know that the B.C. Liberal government is currently undertaking a massive review of everything that they've done over the last ten years. So one would wonder, given the number of reviews and reassessments and attempts to undo some of what they have done over the last number of years, if it really speaks to how bad the policies have been that the government has to reassess their own activities and try to undo them.
We do know that the Premier needs at this point to make it look like there's an agenda for this government in the next 18 months, leading to an election. I'm sure all of these are components of that, trying to whitewash some things that have occurred in the past. Certainly, the damage from deregulation has been notorious.
I know that other members, colleagues of mine on this side of the House, have canvassed the deregulation of addictions and recovery homes and how disastrous that has turned out to be; the deregulation of child death reviews and the ensuing events that took place there that eventually led to the creation of the representative for children and families; the deregulation for forest worker deaths, farm work safety, rail safety; and, of course, the Significant Projects Streamlining Act, Bill 75, which has run roughshod over municipalities.
Those are examples of how deregulation has been really catastrophically bad policy in the last ten years under this government. So I would expect that in this process of deregulation, maybe the government is going to once more attempt to try and patch up some of the bad policy work that they have been engaged in and try and make themselves look better as we move towards an election.
[D. Black in the chair.]
But it does strike me. After ten years of deregulation you have to ask yourself: what is left to deregulate? I mean, a decade of deregulation — how in the world could there possibly be anything left that is not absolutely necessary?
Of course, the twist of fate here is that in the entire time they've been deregulating and bragging about deregulating, they have also been putting in place new regulations. You only have to read any legislative bill that's debated here at committee stage, and you realize there have been massive new regulations put in place to replace those that they have stripped away.
So you have to say to yourself: will this new Regulatory Reporting Act, the report that's published here…? Is it going to evaluate what has occurred over the last ten years? Other than just enumerating the number, the vast quantity of regulations that have been stripped away, will it evaluate the quality of that? Will it look back at the catastrophic results of some of the deregulation here that has resulted in the children's representative being needed to be put in place, the dramatic drop in safety for farmworkers and other issues that have come out of deregulation?
So you have to say: is this report going to give us that quantified ability to say that this was wrong; that this
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did not work; that this was a failure; that here is where deregulation cut too much, too fast and has left the province vulnerable or individuals and communities vulnerable? I don't see that in the language. Of course, it's only just a few phrases on a couple of pages here.
But one would expect that after a decade of cutting and reducing regulations, anything that's left now would have to be absolutely necessary. If not, is the government in fact admitting at this point that there still continue to be frivolous regulations in place that need to be stripped away?
I'm curious about how this reporting act is going to work and exactly what kind of results the taxpayers of British Columbia are going to get for this piece of legislation. Often you can see what a law is going to do, what the results will be in communities, what the tangible results of that are going to be, what the reportables are to communities and to the Legislature. I don't see that here whatsoever.
This simple reporting process is done by all kinds of levels of government every day. We have reports tabled in this House all the time. They are not enacted by legislation. They are simply part of the reporting activity and accountability mechanisms for ministries, for independent officers of the Legislature, etc.
So will this report give us what we want? Is it going to evaluate the last ten years? Is it going to evaluate what regulations have been put in place since then that now need to be stripped away? It seems to me that if you take two steps forward and one back all the time, you're really not progressing very fast. Why would we be putting unnecessary regulations in place? That is not made clear in this legislation before us today.
It does say "Power to make regulations," so obviously the Regulatory Reporting Act is going to create regulations as well. So perhaps the government is admitting, after a decade of cutting, that many of these things, like other work that they have undertaken in the last decade, need to be revisited, restored and repaired. Perhaps that's what this reporting act actually tells us.
It is curious to me, though, that the government has not in any way been accountable for some of the failures in deregulation in the past and what's resulted from that. You do hear from communities, and you certainly hear from those who have had direct impacts from deregulation.
Safety measures for people working in the forests. Clearly, we've heard many stories over the last years about how deregulation has left those communities and those workers vulnerable. Farmworker safety. We do know that a catastrophic event has left, even to this day, injured farmworkers without the safety protections that they need.
Is this report going to go far enough to evaluate those things and, in fact, make a determination on that, make a recommendation to government on some of its own bad behaviour? I don't know. I can't tell from the language in this bill if that is, in fact, the outcome of it.
At this point I don't think that anybody on our side of the House has enough understanding of what the ramifications of this will be to actually vote against it, because on the surface, reporting out on regulatory reform seems pretty innocuous. Like many things, the devil is always in the detail. We don't have enough detail. We certainly have many, many questions here.
If this is an attempt for the government to undo some of their bad policy work over the last decade, that's also very supportable. If this is yet one more attempt for the government to try and put together a positive agenda to show that they're doing something under the new Premier, this is a pretty skinny little piece of work. I don't think it gives us any substance there.
I don't intend on opposing the bill, but certainly, so many questions arise out of this. Even when looking at the language, it's pretty hard to tease any of that out, even at committee stage, because there's not enough here for the government to really answer our questions or tell us.
I will look to the government to start being more accountable for bad policy of ten years in government. If they're trying to remake and rebrand themselves, I don't think this is going to do the trick. It seems like a thin band-aid to try and patch up the damages, the wounds, that have been created by deregulation.
Numbers alone don't tell the story. The small business community has got lots of evidence about how deregulation has not delivered to them what they expected. I know this government does purport itself to be the connectivity, the government for small business. I know that the small business community would certainly take a different view, based on the deregulation failure as well.
I will not be voting against this, but I certainly watch with keen interest to see whether or not it's going to produce anything tangible, or if it's just another superficial attempt by the government to try and repaint themselves to be different than who they have proven to have been over the last ten years.
M. Sather: It's my pleasure to rise for second reading debate on Bill 7, Regulatory Reporting Act. As other speakers have mentioned, it's a very thin bill. It simply requires the government to report, on or before June 30 of each year, regulatory reform initiatives that meet the requirements set out in the bill.
But I think from the government's perspective, it is a significant bill, because what they're doing is signalling an attempt, I think, to try to return to the halcyon days of the early 2000s where they were riding in on their steed to cut all red tape — which, of course, is a phrase that has a negative connotation. No one likes red tape,
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I guess. So this government has made a major attempt to….
That was their almost raison d'être at the time. Now it seems that, from things the Premier has said early on after becoming elected, she wants to go back there again. Not as though they ever left the deregulatory mantra, but she wants to go back there or to remind people that they're still doing that. So I think it signals that rebranding by the…. It's not actually a new brand, but it's the same brand.
Certainly, the minister considered it to be pretty significant. He said in his opening remarks that this bill will have us leading the world — no question — in virtually every aspect of regulatory reform. We know that the government is always best in the world, according to what they have to say about their legislation, and this is another attempt in that regard. It's quite significant, I think, in that respect, but we need to look at some of the history of what the deregulation in British Columbia has done.
In 2001 the B.C. government set a target of eliminating one-third of all regulations. Between then and 2005 the government repealed, amended or replaced a wide range of environmental statutes as well as cut funding to environment-related ministries. Despite promises that the changes would maintain high environmental standards, these changes severely weakened the province's environmental regime.
If we look at water, for example, the provincial government's riparian areas regulation weakens protection for fish habitat, giving wiggle room for developers who want to build close to the banks of fish-bearing streams.
The other thing I wanted to mention about water, of course, is the recent study that came out saying that B.C. has the worst water protection measures in Canada — outside of Victoria and Vancouver, where we fortunately have watersheds that are protected. But we have the highest number of boil-water advisories, and I don't see the government working to put in any regulations to improve that dangerous situation for citizens in British Columbia.
But then, of course, that's not the purpose — to put in regulations to protect things like water. The purpose is to get rid of regulations, as this bill makes clear.
If we look at pollution, in 2003 B.C. enacted a new Environmental Management Act, replacing the Waste Management Act. The new act, in its waste discharge regulations, shifted from requiring government approval before waste can be released to, in many cases, a system of regulations under which industry can pollute as long as the rules are followed.
That's a peculiar arrangement that is a theme in the government's deregulatory agenda, which I'll bring up. I think it has to be said. I guess it's fine for the government to want to cut red tape, but protecting the interests of the environment and the interests of British Columbians should come foremost, and it hasn't, as a result of the kinds of actions that the government has taken over the last ten years.
If we look at parks, amendments to the Park Act weaken restrictions on development in provincial parks, authorizing petroleum and natural gas removal. Of course, it wasn't long ago that there was a big push for resort development in parks by this government, which was turned back by public opinion.
Certainly, the loss of the integrity of our parks has been substantial. I know that Golden Ears Park in Maple Ridge, the busiest park in the province, is not open during the wintertime. Much of the time it used to be open. It used to be accessed. It's been quite disturbing for park users. The rates have gone up and use has gone down. It's not a positive arrangement there.
I wanted to look in particular, though, at the government's deregulatory regime in terms of the environmental assessment office. There's been a lot of discussion around environmental assessment and the government's intent to speed up approvals for various kinds of developments.
In 1994 the NDP consolidated the environmental review processes by passing B.C.'s first Environmental Assessment Act and establishing the environmental assessment office in the Ministry of Environment. "The 1994 act was repealed and replaced in 2002 by the B.C. Liberal government as part of a broad deregulation of many environmental laws."
Despite promising to lead the world in sustainable environmental management, with the best air and water quality and the best fisheries management, bar none — that was the statement made — the B.C. Liberals changed the legislation to exclude many large and potentially environmentally destructive projects from assessment.
"One of the main changes to the act was the elimination of provisions requiring engagement of local governments and First Nations on project committees and provisions allowing for inclusion of other stakeholders on public advisory committees. The new…act placed considerably more decision-making flexibility in the minister and the executive director of the environmental assessment office for many aspects of environmental assessment, such as whether reviewable projects would require assessment and what the terms of reference for those assessments would be….One of the more controversial provisions in the new act was its requirement that the executive director 'take into account and reflect government policy identified…by a government agency or organization responsible for the identified policy area' when determining the scope, procedures and methods of an assessment or in the course of an assessment."
So we can see the direct hand of government in the environmental assessment office, an agency which is supposed to be hands-off or at arm's length.
Of course, we've heard a lot — it came out in the throne speech in 2010 — about one project, one process. That's where the government has been trying to move and has complained about the Canadian environmental assessment, which they've said "must be amended to create a unified federal-provincial review process that does away with redundancy and unnecessary costs."
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You'll note, Madam Speaker, that the government is saying that the federal review process must be amended, not the provincial review process, because it's clear that the federal review process has the stronger environmental measures in it. So there's a concerted attempt through deregulation to lessen the protections there.
I hope when the government reports out under this new Regulatory Reporting Act that they will report not only what they see as the glowing successes but what critics are saying have been the downsides of the deregulatory process.
Several high-profile assessments were certified at the provincial level only to fail their federal environmental assessment. That's the problem for this government, so they're trying to get the federal government to change their law, to weaken it along with ours.
Despite having over $30 billion in projects under review, the B.C. Liberals continue to inadequately fund the environmental assessment office. In 2006 and 2008 the B.C. Liberals claimed that $6 million over three years would be designated to eliminate the backlog in the environmental assessment office. But instead of increasing funding, the Liberals have addressed the backlog by allowing more projects to proceed without assessments, including independent power projects under 50 megawatts. They no longer have to go through the assessment at all — and temporary storage of toxic waste, regardless of the amount….
So you're just storing toxic waste temporarily, which could be exceedingly dangerous to the environment and to citizens. You don't have to have any kind of an assessment of that.
I think it's important to look a little more in-depth at just what has happened with the environmental assessment process under the deregulatory regime that is going to be continued, clearly, under Bill 7.
Determining the adequacy of studies — environmental assessment in British Columbia. "Although the decision to accept an application for review triggers the 180-day approval timeline…the executive director or his designate will do so even where it is clear that the information is not yet available."
So the information isn't yet available but they trigger the approval timeline. "This lack of information may prejudice the public's ability to adequately respond to a proposed project. Also, while it generally seeks interagency agreement, the EAO" — the environmental assessment office — "sometimes decides that studies are acceptable, despite the contrary expert opinion of those in government agencies who may be better qualified."
The government is not even following their own expert advice oftentimes, if it's in conflict with the speeding up of approvals. "The record shows that the EAO will sometimes reject agency and working group recommendations for further study…without presenting a contrary expert opinion or rationale, other than the proponent's own reports." A lot of us have complained about this for years — that the proponent's reports are the ones that the government listens to and it's this self-reporting. "We'll set up some broad guidelines, and you tell us how you're doing, whether you're meeting them."
If we look at deferral of issues, the record shows "a tendency to recommend certificate approval while deferring outstanding issues on which there may be considerable disagreement within government…. There is a danger that deferral of critical issues to future decision-making can become a shell game, as some proponents later object to terms and conditions at the permitting stage that are not explicitly expressed in the EA certificate."
If you want to rush a project through, that's a handy one. You put it off until later, and then the proponent objects, and it just disappears. It's little wonder that there's a lack of confidence in the environmental assessment office today, but I have to say that I think that's the way this government wants it. That's part of their deregulatory regime that they're going to make even better, according to the minister. It's going to be better at circumventing environmental protections.
"Also, some certificate applications do not provide certainty of location, with specific location deferred until after the EA process. For example, some energy projects identify a wide swath" — a two-kilometre swath — "…of public land as potential routing for transmission lines. MOE" — the Ministry of Environment — "wildlife biologists need to know the route location because the ultimately chosen site might significantly affect habitat for threatened or endangered species, raising issues of acceptability, mitigation options and the terms of EA certificate approval.
"When these issues were raised by MOE and the Canadian Wildlife Service for one project, the proponent simply stated that 'the need for detailed rare plant surveys and mapping of wetland and bog habitat affected by the final project footprint is expected to be a condition of the environmental assessment certificate.'"
So give me the certificate, give me some circumstances or conditions that I have to…. Then, does anybody ever follow up? Apparently not. It's really weakened entirely.
If we look at mitigation:
"Similarly, there's a lack of clarity around what constitutes acceptable mitigation of adverse effects. Many times it appears that future planning or site investigation is considered to count as mitigation of an adverse effect."
Future planning — that's hardly anything that has any teeth to it.
"While mitigation measures attached to EA certificates are legally binding, they're often expressed in overly general terms, leading to questionable enforceability. The EAO will accept as mitigation measures the commitments, as proposed by a proponent" — commitments, Madam Speaker; there's nobody there that's going to be ensuring that those commitments are kept — "even when the language is clearly noncommittal and not outcome- or results-oriented.
"For example, one project approved in 2007 included the following as mitigation measures: consideration of forestry values; minimizing vegetation clearance and implementing buffer zones to minimize the proposed project footprint in bog and wetland habitats."
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I mean, what does that mean: "to minimize"? There's no real direction there as to what the proponent needs to do to obtain the certificate.
It was accepted that disturbance to wetlands may have high effects due to the small size of wetlands and their sensitivity to development activities. It goes on with other words: "development of a long-term plan," "encouraging," "consulting with," and so forth. But this is the nuts and bolts on the ground of what happens with the deregulation agenda of this government.
In the environment it's disastrous. It's simply to weaken the environmental regulations. I don't think that's anything at all for this government to be proud of. I only shudder when I hear the minister say that we're going to have the best deregulation agenda in the world. Haven't they already done enough damage, that they want to do even more? Apparently not, so I certainly am concerned.
Let's look at the Fish Lake environmental assessment, which was a high-profile one. Fish Lake is sacred to the Tsilhqot'in Nation, and Taseko Mines wanted to build a mine and use the lake to store toxic waste rock — killing the lake and connecting streams, and putting at risk the ecosystem's viability. The B.C. Liberal environmental assessment process approved the mine, despite the fact that a senior ecosystems biologist with the Ministry of Environment found major deficiencies with the project approval.
But then…. See, there you go again. What does it matter what biologists say about the environment with this government? Not much. That's the kind of process that they want. Meanwhile, the federal government's process found that approving the mine would have significant adverse effects on the environment and local First Nations. It ended with the Harper Conservative Environment Minister halting the project. Now we know they're back for a second round.
Again, the B.C. Liberals promised to have the best fisheries management in the world, and then they turned around and gave a thumbs-up to destroying a lake and watershed with 90,000 fish in it. I don't know how those two things square. Well, they don't. It's difficult to imagine a government less sympathetic to the environment than the Harper government, but the B.C. Liberals own that distinction, unfortunately.
There are more things I could talk about on the EAO. I want to go on briefly to forestry just before passing over to someone else. The deregulatory agenda, which is enshrined again in Bill 7, says we're going full bore ahead to make things even worse than we already have. In forestry a series of new forest laws were passed in 2002 by this government.
By far the most significant was the Forest and Range Practices Act, which replaced B.C.'s Forest Practices Code with a so-called results-based forest management regime. The new act and its regulation is not effective in protecting environmental values. Well, we've certainly seen that.
Under the Forest and Range Practices Act there no longer is government approval of roads and cutblocks — just a general area where the industry will carry out its activities. So it's very difficult to monitor. If nobody wants to look into what's actually happening and if the environment is being protected, they can't really know exactly where things are going on. It's just over a large area.
This increases risk of harm to environmental values at the cutblock level, obviously. The location of a cutblock and how it will be logged is often very important for maintaining environmental values, but will not be reviewed by government officials — a total hands-off deregulation approach that this government has taken around forestry.
The main reason for this major reduction in agency oversight is staff and budget cuts, of course — 700 Ministry of Environment forest staff cut and then a thousand, including the related agencies which were then water, land and air protection, and so on. There have been tremendous amounts of cuts.
The government themselves have had some difficulty with their backlogs because they've cut the Forest Service and the Ministry of Environment so badly. I think they initially thought that was the best thing in the world. Get those technicians and those biologists out of the field — anyway, they were only holding up projects. But now they've found that they actually have to have some of these people to get some of the work done — at least the superficial job that they do in order to pass the projects.
These changes have meant a substantial increase to industry control over what happens on public land, and that's something we must never forget. We're in large measure talking about public lands, but you would never know it, the way this government proceeds. There's no corresponding accountability for this new autonomy. Cuts to forestry have resulted in a much smaller ministry that will stay out of industry's way. There's much less research, inspection and enforcement capacity.
Others have talked about Bill 75, the Significant Projects Streamlining Act, so I won't repeat those. Suffice it to say that it's a clear direction by this government. As small as Bill 7 is, it's very clear that they want to proceed with gutting regulations, many of which protect our environment, protect our water, protect our forests. But that's the route that they're telling British Columbians they're going to go.
For those many British Columbians that are concerned about the quality of their water, concerned about species, concerned about environment and forestry and all of these things, the government is clearly signalling — and the Premier has signalled it in words that she's said
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— through Bill 7 that they're going to continue on this destructive agenda. I think that is a great misfortune.
R. Hawes: I seek leave to make an introduction, Madam Speaker.
Deputy Speaker: Please proceed.
Introductions by Members
R. Hawes: In the gallery today we have nine grade 10 students, along with their teacher Ms. Champion and several adult chaperones, who are here to watch democracy in action and to take a tour of the building. They're from Dogwood Independent School in Abbotsford. I'm informed that they're all excellent students; they're all high achievers. Potentially, several of them are going to be sitting here as MLAs in the House somewhere in the future. Could the House please make them very welcome.
J. Brar: I also welcome the students from Abbotsford to watch a very lively discussion here in this House.
I'm very pleased to respond to Bill 7, Regulatory Reporting Act, 2011. This bill requires government to publish an annual report on regulatory accountability. That's what this bill does. The minister will produce a list every year talking about the regulations and deregulations.
I support sensible deregulation, and there's nobody on this side of the House who does not support sensible deregulation. We do that. But my fear about this bill is very simple, that this bill is used as a tool to make life easy for big corporations and make life very difficult for the most vulnerable people of the province of British Columbia, the people who live in poverty.
As this government did in 2001 when they came in power, there was a stand-alone Ministry for Deregulation. At that time the minister claims that they cut in the range of 40 percent of the regulations in this province. But at the same time they added tons of regulations for the people who are most vulnerable in this province. For example, they made life way more difficult for people who are on welfare and who are on welfare because they have no other source of income.
They made rules. For example, they added that they have to wait for three weeks before they can access income assistance. When people go there and make application for income assistance, they have to basically exhaust every resource they have. They go there when they have absolutely nothing. But when they go there, they are asked to wait for three weeks and to come back after three weeks. That was the regulation added by this government to make their life very, very difficult.
They also added at that time that they have to go through — it's called — the two years independent test. In other words, anybody who makes an application for welfare has to clearly show to the government that they have lived two years independently, from an income point of view. They have to have lived basically with their own income for two years. Only then can they access welfare. So that was the rule added by this government as well.
My fear about this bill is simple — that this bill is used as a tool to make life very much easier for the corporations, cuts regulations, whether it's environmental or worker safety or many other regulations, and to make life way more difficult for the most vulnerable people of the province.
I just want to make a point that reporting on regulations is not a bad thing, but do we really need this legislation just to produce a report every year? This government in 2001 did produce a report on regulations — every year — without having any piece of legislation, so why do we need stand-alone legislation now? That's the question that the people of British Columbia would like to know. What will we achieve by passing this piece of legislation, which does nothing beyond producing a report every year? That's what this bill does.
Interestingly, section 2 of this bill states very clearly that there can be no legal consequences to not fulfilling the requirement of producing an annual report. This bill is very interesting and entertaining. On one side we are passing a law here that the government will produce an annual report every year. At the same time there is section 2 in the same bill which says that if the government fails to produce the report there are no legal consequences.
So what is the purpose of the bill? What are we going to achieve by producing this bill? The same bill states that government is required to produce an annual report, and the same law says that if they don't produce it, that it's okay. There's no liability for not doing that.
In the past this government has used these regulations and deregulations, as I said earlier, for things — just to use as a cover-up to make changes for the most vulnerable people. I would like to, probably, highlight some of those very briefly here.
In 2002 they changed regulations to allow drug rehab centres to operate without a licence. I met, a few weeks ago, a very concerned constituent of mine in Surrey and also a physician who treats people who are on drugs.
I met with them, and they were very, very concerned about drug rehab centres running without a licence. That was the change made by this government, that people can run drug rehab centres without a licence. In other words, they don't need to be accountable. That was the change made in 2002.
So what does it mean? Those drug rehab centres basically are places to treat the most vulnerable people of the
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province, the people who are drug addicts, people who need real help, people who don't know what's going on around them. So they need a place that people can depend on. They need a place which is accountable to the people of British Columbia.
I was told by this constituent of mine, as well as by the physician, that there are centres in the city of Surrey where you can only find the phone numbers and not the location of the centre. Even if you ask them, they will not tell you the location of the rehab centre. They will only tell you the phone number. But they are treating the most vulnerable people of the province. That is the outcome of the change made by this government in 2002, when they made the change that people can run drug rehab centres without a licence.
They also met with the mayor of the city of Surrey, and she said that this does not fall under the civic rules, that this is a provincial matter. Yesterday we found out in question period that this government…. For the last five years there have been discussions going on to make sure that the drug rehab centres have proper regulations, proper licensing processes, but they have failed completely to do anything. That's the situation.
If this bill is going to be used for people like the drug addicts and all that, to make life more difficult so that they just cannot come out of that cycle, then the intent of this bill is not the right one.
Similarly, in 2002 this government changed the Employment Standards Act to exclude farmworkers from regulations regarding hours of work, overtime and statutory holiday pay. That's the change they made for the people who produce food to put on our tables for the people of British Columbia. They excluded them so that they cannot have hours of work, they cannot have overtime and they cannot have a statutory holiday.
If this bill is going to be applied to workers of British Columbia like that, then the intent of this bill is nothing more than to make life more easy for the corporate elite and more difficult for the working people of British Columbia. This is nothing to do with the so-called red tape. This is purely based on the ideology of this government to make life more difficult for the workers.
Similarly, in 2002 the B.C. Liberals removed the Children's Commission, an independent officer of the House to oversee the quality of care for our children. That was done by this government under the deregulation process. The result was very painful. The result was very painful — 1,259 children's deaths went without a proper review. That was the outcome.
If this bill is used for that purpose, then this bill is not going to serve the people of British Columbia in any positive way. This has nothing to do with deregulation. We are talking about the children of British Columbia.
Similarly, in 2002 the private colleges were deregulated, leading to problems with ESL students. A number of students lost their life savings in the province of British Columbia because they chose a private college which was not accountable to anybody. Because those students were not protected under any regulations, those private schools closed their doors, declared bankruptcy, and all the life savings of those students is gone.
That's what happened, and that was the deregulation made by this minister when he was the Minister of State for Deregulation. As I said earlier, in 2002 they made a number of changes to make life more difficult, to put more barriers for the people who were trying to access income assistance because they have no other source to survive.
In 2002 they eliminated the Human Rights Commission — the only province in the country which eliminated the Human Rights Commission. That was probably also counted as one, or maybe more, less deregulation.
I just want to talk about the word "accountability." The main pillar of this bill is the word accountability. Madam Speaker, as you know, English is my second language. Yesterday I tried to consult the dictionary to find the meaning, what is meant by accountability. I tried to find various meanings to see whether this bill will pass the test of that accountability. I found a few definitions, and I will share those definitions with you.
Accountability means responsible to somebody or for something. That's the first definition. Under this bill this government is not responsible for anything, as there can be no legal consequences to publish an annual report, which means that this bill does not pass this definition of accountability.
Another definition I found under accountability was that accountability means the state of being accountable, liable or answerable. Now, this government does not pass the test of this definition, as well, because they are not liable. They are not liable for anything if they do not produce an annual report. So this bill fails this test of accountability as well.
Similarly, another definition was there. Accountability means a policy of holding government accountable for existing legislation. But this bill itself says in section 2 that if the government fails to produce or if the government does not want to produce an annual report, there are no legal consequences. This bill does not pass that definition of accountability as well.
The question we need to ask is: how can this bill strengthen regulatory accountability when this government is not accountable to the key requirement of this bill itself? That is producing an annual report. That's the choice, at the end of the day, of the minister.
If we look back, this government has used deregulation as a cover for changes for other purposes than streamlining the process for small business industry or for business industry or for anybody else. We need to remember what took place in the United States of America because of the lack of sensible regulations for the banking
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industry. The end result was that millions of people lost their life savings, lost their jobs and lost their homes. That was all played and being played in front of us. We don't need to be reminded about that. That's happening even today, right next door.
We do support sensible deregulation. We do support that, but we do not support something. We do not want to give something, a tool to this government, which they'll use to basically support their friends, which they'll use to make life very much easier for the corporations and way more difficult for the people of British Columbia and for the most vulnerable people of British Columbia.
There are some sensible regulations that we need in this province. I'm just going to give a few examples. First, we need to appoint a seniors advocate, for example.
We have seen stories after stories on the situation at seniors care homes. There's a huge issue of accountability there. I've listened to stories after stories that the new owner takes over, they fire all the staff members, and they rehire all the staff members with less salary. They basically cut staff, and there are way less staff to provide care to the seniors.
In fact, I was visiting a seniors care home in my riding a couple of weeks ago, and I was with a senior who was completely dependent on staff members for care for every minute. The family members were there. He needed help, so they pressed the panic button, and nobody showed up for 45 minutes while I was there myself. So where do you report all of that? There's nobody you can talk to who will take action, who will try to improve the system. We need the seniors advocate.
Similarly, we need regulations to address the child poverty in this province. For the eighth year in a row, we have the highest child poverty in the province of British Columbia. The members on the other side will stand every day, and they will talk about the economy and all of that. But for the people at the bottom, nothing has changed for them. Actually, the gap between the rich has become bigger and bigger.
So for the eighth year in a row this province has the highest child poverty, and we need something and this government needs to do something to address that. We need some regulations to make sure that we handle that situation, to provide life, to provide hope for these young kids.
Similarly, we need to bring back, for example, earning exemptions for the people on welfare, people on income assistance. At this point in time, if you're single and if you end up on welfare…. You have to be either on welfare or you have to be employed full-time, because if you go and find a part-time job, they will cut dollar for dollar. That's the situation.
In other words, you cannot go and find part-time work and work for a couple hours or two hours or maybe a day or a week and earn some money to supplement your income. Those earning exemptions were, again, taken away under the so-called deregulation by this government in 2002.
So the question I am asking and many people are asking themselves is: should I support this bill?
J. Brar: I know that the members on the other side are laughing. Should I support this bill that requires the government to publish an annual report on regulatory accountability, even if they are no legal consequences for not publishing such a report?
It becomes, to some extent, funny. We are passing a law to publish an annual report, but there's no requirement to publish an annual report. So do I support this bill? Should I report this bill that gives us the appearance that it will strengthen the regulatory accountability, even if the government is not accountable to produce that report itself? That's the question I'm asking myself.
Should I support this legislation, because our government will become the national leader by publishing an annual report every year? That's what the Minister of Finance is saying — that by doing this we will become the national leader. So the standards for becoming a national leader are pretty simple in this province: publish a report every year and become a national leader.
In closing, I just want to say that we do support sensible regulations and deregulations but not at the cost of compromising the safety and security of the people of British Columbia.
Deputy Speaker: I recognize the member for Victoria–Swan Lake.
R. Fleming: Hard to forget Swan Lake. I'll have to take you out there sometime to see the wonderful nature sanctuary there.
I rise this morning to speak to Bill 7, the Regulatory Reporting Act. As others have said, through this debate at second reading, what's probably most significant about this bill is that it's completely unnecessary to enact through legislation.
It adds very light, very vague reporting requirements that could be issued at any time without legislation by the Minister of Finance, either through his ministry service plan or as a separate report. That's pretty routine in government. It's what the Ministry of Environment does in its quarterly enforcement reports, for example.
[L. Reid in the chair.]
We have been left to guess on this side what this bill is really about. Maybe it's about something else. Maybe
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it's about an illusion that the government wants to create about business and regulation, having run out of ideas and having coasted for years on clichés that the business community itself has grown tired of from this government. Maybe this is about proving that there is still a legislative agenda for them.
But if this is an agenda, it is one that is full of air and has no substance. As we've seen a lot during this legislative session, much of the time has been used up by the B.C. Liberals to expose the panic in that caucus about their shrinking political base and a growing conservative political base in British Columbia that has, quite rightly, grown tired of corruption and aimlessness and is now supporting another party. That's a great concern to this government that is hanging on to power.
The B.C. Liberals feel entitled to votes of those who have a conservative philosophy, and they have for years. They've had the run of the place, and they don't want political competition or more pluralism in B.C. politics or in the Legislature.
That is the spirit in which, I think, this bill is submitted to the House. Merely by tabling a bill with the word "regulation" in it, the B.C. Liberals are hoping to give the illusion that it looks substantive, even though it requires nothing more than an annual summary of regulatory features and requires no legislation at all.
So like the federal gun registry debate that the Liberals wasted a Monday morning on not so long ago, and like the disgraceful way that the Premier tried to come into this House and simplify the federal Tories' crime omnibus bill, this is just another ideological dog whistle for the right wing, who, like all British Columbians, have grown tired of this government and see nothing in common with this partisan federal Liberal Premier.
The timing of the bill is more interesting than the bill itself. This is a bill that adds the lightest and vaguest of new reporting requirements and is coming in to be debated here the same week that this government is winding up the B.C. progress report, the major reporting and indicator measurement agency of government, which measures a much more comprehensive set of indicators and does a performance evaluation of the province of British Columbia on key social, economic and environmental indicators.
This fluff bill, 1½ pages, is being submitted to this House on, actually, the very same day that the B.C. Progress Board is being wound down. So here are the Liberals putting forward a one-page, unnecessary bill that provides little information of dubious use at the very same time that the province is killing an arm's-length, fully funded and semi-independent performance reporting agency.
That is quite a contrast we have here. We're losing the very same Progress Board that has measured a number of things since 2001 — and it's now a decade of data to evaluate this government on — and that has at times embarrassed this government severely.
I think Paul Willcocks said it best in his article on what the province will lose by the demise of the Progress Board at the hands of this Premier and why the B.C. Liberals are so eager to get rid of it after its ten years of existence and the work that it did. The conclusion that Willcocks reaches…. And I think that business leaders and academics and citizens who read the reports all come to the same conclusion.
The way he says it is:
"On balance" — this is looking at the last ten years — "the economic rankings slipped slightly from the NDP years. The other measurements were mixed as well. B.C. ranked sixth for poverty in the first report" in 2001.
Now it ranks tenth.
"Infant health has declined…. Overall, the…board found the government's performance was average, maybe just a little bit worse than average. B.C. improved in some areas, but so did other provinces, at similar rates….
"The loss of the…board is significant. The annual report card and the special reports offered insight and a level of accountability rare from any government. The cost was modest. And a database of comparable performance measurements over years offered great potential long-term benefits."
That is all being thrown into the gutter, and what do we get as a replacement? Bill 7? You've got to be kidding.
Now, here's another bit of context, I think, for debate around this bill. The Finance Committee and the B.C. Liberal committee majority made a very controversial recommendation to this House last week, and it was to scuttle B.C.'s participation in a cap-and-trade emissions trading scheme and the Western Climate Initiative's proposed carbon trading market.
So having put hollow legislation through this House in 2008, now at the moment of truth, while the seventh-largest economy in the world, California, is moving ahead, the B.C. Liberals, their back bench and perhaps the cabinet and the Premier's office — we don't know yet if they share this opinion — have gotten cold feet and are backing down — at the very same time that Ontario, Quebec, Manitoba and some western states move ahead.
We are supposed to be getting new regulations about how the cap-and-trade system will work, what the cap regulations will be, how the permits will be auctioned, how it fits into the government's overall climate action plan, and right now we have recommendations and things going on in the backrooms of this caucus to kill it off.
Now, that I find very interesting. When we're getting this shell of a bill that offers nothing of meaning to the province of British Columbia, we're losing the performance reporting agency of government, and we're losing the major regulatory initiative of government to try and contain and reduce carbon emissions and fight climate change in British Columbia. That's the context of Bill 7.
On the bill itself, as I've said, there is really little in it. Now, what the minister and the government could have done, perhaps, if they're trying to show something
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to business and investors in communities, is look at creating something more meaningful.
There are a lot of examples around the world where jurisdictions try and attract investment by giving an accurate depiction of the economy and what investor expectations can be. There is the World Bank's ease-of-doing-business index, for example. Usually, rankings by the World Bank of jurisdictions do show a correlation that simpler regulations are better for business.
But it's really about better regulations. We've been through a world economic downturn, beginning in 2008, because of the ideological excess of certain governments and banking systems and lending activities that were done and new derivatives markets and certain types of trading that were happening that have wiped out the savings of literally tens of millions of people and destabilized countries and currencies around the world. That was all done in the mantra of deregulation.
The contemporary thinking and the response to that destabilization has to be to look at regulation again, to look at balance in regulation. But I think this government still wants to pretend and harken back to an era where the rhetoric was easy and it said that all regulation is bad — you know, as if that would even extend to restaurants and people wearing hairnets. All regulation is bad — that was the mantra we had for ten years from this government.
But what we're hearing leading thinkers around the globe and political leaders talk about — and with some urgency, especially in the European Union — is how to restore regulatory oversight, credibility, and get the balance right. I think it's a shame that in British Columbia we're not having that discussion. Instead we have a 1½-page bill that is really about nothing.
With that, Madam Speaker, I would take my place after second reading debate on Bill 7. Thank you for the opportunity to speak.
Deputy Speaker: I thank the member. Seeing no further speakers, the minister closes debate.
Hon. K. Falcon: Madam Speaker, I've listened carefully to the hours and hours of discussion on this particular bill, particularly by the NDP members opposite. I guess I would summarize the NDP position as: they take great offence at the purpose of this bill. The purpose of this bill, of course, is very straightforward. It simply imposes, by law, a requirement on government to produce an annual public report on its regulatory reform activities each year. Every year government, in this Legislature, must report out on what progress or lack of progress we've had with respect to regulatory reform.
[Mr. Speaker in the chair.]
The member for Surrey-Fleetwood refers to this as…. Well, if this is all it takes to be a national leader in regulation or deregulation, what the heck is that all about? But what they fail to understand is that this government is a leader on regulation not because of this particular bill. We're a leader because we not only met our commitment to reduce the regulatory burden by a third; we exceeded it 42 percent.
We said that what we want in British Columbia is that our measurement is not on how much regulation we have, but on what kind of outcomes we get. We want smart regulation, not volume of regulation. That is the difference.
So why, you may ask yourself, would the NDP take so much time to complain about a bill that apparently does nothing? They by their own words say that this does absolutely nothing, and then they spend hours of House time, when we could be debating other bills, going on about just how terrible this is.
We do have to ask ourselves: why is it that the small business community pushes so hard for this bill? Why do they feel it's important that government has a legislative requirement to report out every year? Well, I think there's actually a connection between those two things. I think there's a connection.
Small business wants to ensure that any future government is going to be publicly accountable for progress or lack of progress on that, and the NDP opposition never want to be held accountable. Now, why is that? Well, I want to read to you from a Vancouver Sun article, June 28, 2001.
"The NDP in Victoria passed an average of 400 regulations a year during that decade. It took an average of 865 pages to document these dictates each year. These regulations cost the province millions of dollars to administer, and they cost firms billions of dollars to comply. These costs are eventually paid by customers through higher prices, by owners through lower profits and by employees through lower wages."
That was the Vancouver Sun.
Just to remind everyone what the NDP regulatory world looks like, just remember what ICBC was requiring of automotive glass dealers. Does anyone remember that? They were required by dictate in that NDP government to have a person whose only job was to meet and greet customers, to have computer screens that must be at least 15 inches wide. It went to the point of describing the kind of soap and toilet paper that must be in the washroom facilities of agents and brokers across the province. That is the kind of crazy regulation that we wanted to deal with.
During this talk, during the hours that I listened to, I heard the NDP rail against the fact that British Columbia is now a recognized leader not just in Canada, not just in North America, but around the world. I heard them go on about the forestry industry, and they railed against the deregulations and said that the deregulations…. This was the most despicable part of it, I have to say, Mr.
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Speaker. They actually tried to make a connection between the terrible and unfortunate circumstances where individuals die in a very high-risk business — the forest industry. They tried to connect that back to the deregulation process. That is just absolutely appalling.
I just want to read into the record what was said about the Forest Practices Code. Remember, under the NDP their own minister responsible for forests acknowledged that they added over a billion dollars of cost to the industry with no evident benefit. Your own minister — that's the NDP acknowledging it.
I'll read another quote, and this is from the Vancouver Sun, April 3, 1998. "The Forest Practices Code and the associated red tape was 70 feet worth of paper at its height." Another quote from the Minister of Forests at the time under the NDP. "It's gone from 70 feet down to 35 feet," Zirnhelt said, referring to the field guides, manuals and regulations that accompanied the code. That's what they did.
Now, let's look at that very unfortunate situation of deaths in the forestry industry. That is truly an awful situation. In 2001 to 2010 there were, unfortunately, 138 fatalities in the forestry sector. All of us mourn every single one of those unfortunate deaths, as we should. But in 1991 to 2000, when we had 70 feet of additional regulation by the NDP through the Forest Practices Code and all the other codes, there were 207 fatalities during that decade.
There has been a 33 percent reduction because we're focusing on outcomes and tougher penalties on those that would dare take the lives of workers at risk and making sure that they pay the penalty. That's what smart regulation is about.
Then they talk about child labour. They try to make it sound like we're a Third World country where, apparently, everybody is enslaving children in British Columbia and putting them to work. That's essentially what you can get out of the discussions and the speeches we heard here.
Let's look at what was the big NDP regulatory initiative that saved all the children from this terrible abuse? Well, I'll tell you what you it was. They required, under the NDP, that if your child was to go to work, you had to apply for a permit from a bureaucrat in Victoria to authorize your child going to work. So that 14-year-old in Prince George that wants to have a paper route has to have his parents apply and get a permit from a bureaucrat in Victoria to approve whether that child can work. That's exactly what it was.
You know how many permits they issued?
Hon. K. Falcon: Well, the member says to make it up as you go. He should go and read his own regulations; apparently, he hasn't.
The government, under the NDP, issued about 400 permits a year, on average. I've got a news flash for the NDP. Even under the regulation in their permitting requirement, there are a lot more than 400 kids working in the province of British Columbia every year. I can guarantee you that. So you know what we did? Our employment standards regulation put the onus where it belongs — with the parents of those children. We say that the parents…. It requires parental consent for 12- to 14-year-olds to work.
We also updated the Employment Standards Act so that all youth that are working today, not just the 400 whose parents actually think about applying and getting the paper from the bureaucrat in Victoria…. All youth workers are protected by regulations that require parental approval, set strict employment conditions on the place of work and provide penalties for non-compliance. That's what you call effective regulation.
The third thing that I want to talk about is…. The NDP say: "You know, why don't we just report out now?" Well, actually we do. That's why we know — and it has been internationally recognized — that we've had a reduction of 42 percent in unnecessary, silly regulations that aren't driven by outcomes, and better outcomes is exactly what we're looking for. That's why we're able to say that.
Straightforwardbc.gov.bc.ca — the members opposite can go and look at that. They can get that information. The difference, what the small business community is saying, is they want any future government — whether it's us or any other government; God forbid it's those folks — to make sure that they are required, in this assembly, to step forward every year by the end of June and report out on their progress or lack of progress. That's what the small business community wants.
That's what offends the members opposite. That's what drives them into enormous outrage — the fact that government would dare suggest that they have to be accountable for their progress or lack of progress with respect to that.
I'll tell you smart regulation covers every aspect. It's the changes we made, for example, to the child care subsidy regulation that says that instead of having an application time that takes mothers and single moms 19 days to go through to get the approval, it now has been reduced to four days. That's where focusing on outcomes in every ministry of government improves things overall.
That's how we are going to continue to ensure that British Columbia is a leader across Canada, across the country, across North America and around the world — by having a smart regulatory regime where we measure ourselves, where we hold ourselves accountable for outcomes; not rhetoric, outcomes. That's what we care about on this side.
With that, I move second reading of Bill 7.
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Hon. K. Falcon: I move that the bill be referred to a Committee of the Whole House for consideration at the next sitting after today.
Bill 7, Regulatory Reporting Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. M. Polak: I call second reading on Bill 17, intituled the Finance Statutes Amendment Act, 2011.
Bill 17 — Finance Statutes
Amendment Act, 2011
Hon. K. Falcon: I move that Bill 17, the Finance Statutes Amendment Act, 2011, be read a second time.
This bill includes amendments to the Financial Administration Act and the Infants Act and transitional provisions which support the integrated administration of B.C. student loans.
On January 24, 2011, the B.C. Ministry of Finance and the B.C. Ministry of Advanced Education entered into an integration agreement with Human Resources and Skills Development Canada in order to integrate the administration of B.C. student loans with Canada student loans. B.C. is now the fifth province to integrate the administration of provincial student loans with federal student loans. Saskatchewan, Ontario, New Brunswick and Newfoundland have integrated their student loan administration prior to us.
Now, while the administration of the B.C. student loan program has been integrated with Canada, the province will still retain full control over the B.C. student loan budget. It will retain full control over the B.C. student loan policy and, of course, on B.C. student loan disbursements.
The integration of B.C. and Canada student loans has simplified and streamlined the process for students. Once integrated, students make only one payment when repaying their B.C. and Canada student loans and need to contact only one service centre when they have questions with respect to managing their loans.
[L. Reid in the chair.]
I actually remember this. It wasn't so long ago that I, too, was a student. Well, it seems like a long time ago now. But I was paying off my loans for many years after being a student, and I do remember how frustrating it was to deal with the B.C. student loan administration and then the Canada student loan administration, having to make payments on each of those, having to, if you had any questions, contact the civil servants from each of the programs. The integration of those two is long overdue.
In addition, there's a benefit. There's a taxpayer benefit by integrating because the province expects to reduce its annual administration costs for the program starting in 2013. One level of administration instead of two saves money. Beginning in August of this year, students who have received or will be receiving new student loan funding in the future will have their B.C. and Canada student loans administrated under the integrated model. That's the only system that they're ever going to deal with.
Now students who received all of their student loan funding between August 2000 and August 2011, when the new system came into place, and who have outstanding balances will also have their student loans integrated beginning in June of next year.
Bill 17 benefits students by amending the Financial Administration Act to allow the province to make an exception to the ministerial directive that imposes a statutory obligation to pay an NSF fee. Today if students in British Columbia write a cheque and the cheque goes bad, they're required to pay an NSF fee. What we're asking is direction to change that to provide an exception to students under our new proposal.
If this amendment is made law, an exception will be made to the directive to exempt students with B.C. student loans from paying that NSF fee for dishonoured loan payments. This change will benefit all students in B.C. with student loans from March 1, 2012, onward.
There are also transitional provisions included in the bill that will update the rules for individuals who received all of their student loan funding, as I mentioned, between August 2000 and August 2011 and still have amounts owing. Repayment agreements will be updated to allow for the application of a common amortization period to allow the B.C. and Canada loans to be merged for integrated repayment.
The new amortization period will be a blend of the B.C. and the Canada amortization periods. The current combined monthly payment and the combined outstanding principal amount paid on the two loans will not change. A proportional payment is to be applied to the B.C. portion of the integrated loan balance. While the current total amount paid monthly on the two loans, again, will not change, the B.C. portion of the payment may change as a result of the blended amortization period.
For a typical B.C. student loan, application of a blended amortization period will shorten the B.C. amortization period, and the amount applied to the new loan will increase to ensure that it's paid off within the new amortization period.
There will be a change in payment due dates and payment frequency to align with the Canada student loan terms, and there will be a definition of "prime interest rate" to match Canada's definition, which is
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slightly different from British Columbia's. There will be a removal of the student's contractual obligation, as I mentioned earlier, to pay NSF fees. Once the integration of the two loans is complete, individuals will have the option to change their amortization period and return to their former payment due dates or payment frequency.
Finally, Bill 17 includes an amendment to the Infants Act which will allow students who are minors to enter into student loan agreements with the province without providing a guarantor. This amendment will be effective on a go-forward basis for any students who are seeking student loan funding for the first time.
Madam Speaker, Bill 17 also contains technical amendments to the Financial Institutions Act, the Credit Union Incorporation Act and the Society Act to end reliance on the Company Act, which was repealed in 2004 when the Business Corporations Act came into force. Under both the FIA and the CUIA, or the Credit Union Incorporation Act, numerous provisions of the Company Act continue to apply by reference to B.C.-incorporated financial institutions. That would be trust companies, insurance companies and credit unions.
Under these amendments, trust and insurance companies will be transitioned under the corporate framework of the Business Corporations Act, ending burdensome cross-referencing that currently takes place.
Credit unions will be treated differently because their cooperative principles and charter documents differ materially from those of other B.C. companies. These amendments will provide a stand-alone corporate framework for credit unions by downloading directly into the Credit Union Incorporation Act those provisions of the Company Act that currently apply to them by reference.
Similarly, the amendments to the Society Act will not change the law applicable to societies but will download directly into the Society Act the dissolution and restoration provisions of the Company Act that currently apply.
These are corporate framework amendments and will not affect the regulation of financial institutions. Regulatory requirements of the Financial Institutions Commission will be maintained. For example, the Business Corporations Act provisions allowing financial statements and auditors to be waived will not apply to trust and insurance companies.
While these amendments are essentially housekeeping in nature, they are very important to the entities involved. Currently, financial institutions and societies must wade through a complicated series of cross-references to a repealed statute in order to find the law that applies to them.
As you know, under a previous summation speech on Bill 7, I talked about the importance of streamlining and the importance of smart regulation. This is an example to the financial institutions and societies of something that causes a great deal of regulatory pain — having to do this kind of cross-referencing work.
Under these amendments, trusts and insurance companies will become Business Corporations Act companies and will reap the benefits of an accessible, modern, corporate framework. Credit unions and societies will be governed by completely stand-alone acts, allowing for easier access to and interpretation of the law that applies to them.
Finally, Madam Speaker, Bill 17 also contains amendments to the Securities Act that will improve investor protection and capital market efficiency by providing the British Columbia Securities Commission with a number of new enforcement and regulatory tools. In particular, the amendments will enhance the commission's ability to regulate the exempt market, where securities may be traded without a prospectus and by persons who are not registered under the act. The exempt market, I hasten to add, is an important source of capital for emerging British Columbia companies, raising over $10 billion last year alone.
However, we are concerned about the losses felt by some British Columbians who have participated in the exempt market, which is why we have introduced these amendments, which will improve investor protection while allowing this important market to continue to raise important dollars for our small businesses.
With these amendments the Securities Commission will have the power to review all market participants, including exempt market participants, for compliance with the legislation. Persons relying on registration exemptions may be ordered to provide information to the commission. In addition, exempt-market participants, like other market participants, will have a positive obligation to keep records of their transactions.
Other amendments will provide the executive director at the Securities Commission with the power to suspend registered dealers immediately, without holding a hearing. In addition, the halt trading period will be extended from three days to 15 days.
Further amendments intended to improve investor protection and capital market efficiency include creating a contravention for attempting to obstruct justice and tightening the circumstances in which a dealer may trade in front of material orders.
The proposed changes will also make it easier for wronged investors to recover money from the wrongdoers by giving the Securities Commission the power to assess claims and disburse recovered funds. The procedures used will resemble those currently used by the civil forfeiture office. Right now investors must prove their claims in court, which can be time-consuming and can be very expensive.
The bill also contains several technical amendments that will clarify a number of provisions of the Securities
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Act. Most of these changes harmonize B.C.'s approach to securities regulation with other provinces. By harmonizing and streamlining the legislative requirements with those in other jurisdictions and improving market efficiency through the use of new enforcement tools, the amendments will help foster a strong, competitive and vibrant provincial economy as a means to creating more jobs. With that, I conclude.
B. Ralston: I rise to address Bill 17, entitled the Finance Statutes Amendment Act. In its bulk, it's somewhat formidable — 111 pages and 149 sections. However, much of the bill is directed, as the minister pointed out, to technical amendments to the Society Act, the Credit Union Incorporation Act and the Securities Act.
I propose to dwell on the proposed amendments to the Securities Act in a little more detail than the others. The issue of the integration of the Canada and the B.C. student loan programs, I think, puts into law administrative changes that have been underway for some time. I expect that my colleague the member for Nelson-Creston will want to briefly address those proposed amendments at this stage if not in the committee stage.
The Credit Union Incorporation Act amendments, in the brief consultations I've been able to do, are welcomed by the credit union movement. They've been consulted along the way, and they're uncontroversial. Similarly, my review of the Society Act changes would appear to be uncontroversial.
The Securities Act does, I think, raise some broader public policy issues and certainly issues of broader public concern. In recent years it's become very clear that definitely not the majority but a vigorous minority of people involved in the exempt market have really set out to systematically defraud a number of British Columbians. Typically, they are people in their mid-life years looking towards retirement, concerned about their retirement security and are persuaded to invest in securities which are not traded on an exchange and don't pass some of the normal scrutiny that one would expect before an investment is marketed to the public.
The exempt market requires an offering memorandum only — no prospectus — which is a much less rigorous form of disclosure. Indeed, the Canadian Securities Administrators devised a national policy proposing to tighten regulation of this market, and British Columbia decided to opt out of that.
The minister has made the statement that this will provide further tools to regulate the exempt market. I'm frankly a bit skeptical, but I do want to address the changes that are set out here. I'll do so in a little bit of detail in the time that's available to me, simply because it may be that given the way in which this House ordinarily operates, the opportunity to address these changes in the section-by-section process at the committee stage may not be available to us — given that this is Tuesday and the House will rise at the end of Thursday.
Ordinarily, we've seen in recent years the government resort to closure on significant pieces of legislation. I'm thinking particularly of things like the TransLink bill, which continues to…. The faults in that bill were not subjected to any scrutiny — simply a couple of speeches at second reading — and continue to bedevil the whole of the Lower Mainland in the provisions that it set out.
I think that's in part because there's no accountability here in the Legislature, no discussion of those provisions, no opportunity for the minister to defend the provisions and no opportunity for members of the public or interested municipalities to understand what those changes might be.
Committee stage is important in that respect, particularly for complicated pieces of legislation as opposed to briefer and slightly more digestible forms of legislation such as we saw in Bill 7, which has only four sections.
If I could begin looking at the changes in the Securities Act, I just want to make some brief points on each one of these sections. Section 120 amends section 15.1 of the existing Securities Act. Previously a person would have to apply to the Supreme Court to obtain a remedy if they had been defrauded of money. This change will permit the person to make a claim to money in accordance with the regulations, but promulgated by the commission itself, which eliminates the requirement to file in the Supreme Court of British Columbia.
The commission in the proposed amendment to section 15.1…. The addition is at subsection (3): "If the commission receives an application under subsection (2), the commission may, in accordance with the regulations, pay to the applicant all or a part of the amount claimed."
So this would appear — and I'd be interested in further discussion at a later stage — to give a remedy by making an application to the commission under a set of regulations which have yet to be promulgated obviously. But that would remove the necessity to apply to the Supreme Court.
Section 124 amends section 57.4 of the Securities Act. It simply strikes out the requirement referred to in section 57.4, reading: "'material fact, material change or material order information' and substituting 'material fact or material change'" — in other words, eliminating the phrase "material order information."
What the legal significance of that is, is not clear. The note, which is not part of the legislation but is printed as a reference guide to section 124, rather curiously says: "…prohibits abusive behaviour currently permitted." It's not clear. Obviously, there's an intention to remedy some mischief, but it's not clear from a quick reading of the section or the change how abusive behaviour currently permitted would be eliminated. I suppose, just parenthetically, it is an admission that the
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present section, if it currently permits abusive behavior, is clearly obviously not working. So I think that would be helpful to get a further explanation in debate.
The new section 126 introduces a new section, section 57.7. I'll read it out again, because I think it's important that we take a measure of these amendments.
"Subject to the regulations, a person referred to in section 141 (2) must keep records of the person's business transactions and financial affairs, and of the transactions that the person executes on behalf of others, for a period of 6 years from the date the record is created." It appears to create an obligation to keep records, imposes upon market participants the obligation to keep records. It's perhaps a little surprising that that doesn't exist already.
Generally, this would, I think, be seen to be reasonable. Obviously, the penalties for not keeping records would, I suppose, be the test of this, because generally, people who are engaged in nefarious activity are reluctant to record it in minute detail, although I suppose there are always exceptions to that rule. But a regulatory advance — a small one, but a regulatory advance — I would say.
Section 130 — and this is spoken of by the minister — adds the following sections. It's entitled "Compliance review of other market participants," and it gives a mechanism to review the conduct of the person. There are a number of sections, and I'll just briefly refer to them. A person is referred to in section 141(2), and if I can find my place in the Securities Act, which is rather lengthy, I'll just briefly refer you to those.
The person is referred to in section 141(2). They are "a person exempted from the requirement to be registered under the section 34 by an order under section 48." That is a person participating in the exempt market that's referred to. Then "(f) a general partner of a person referred to in the paragraph…." And there are a number of paragraphs, but particularly subsection (c).
Subsection (g) is "a person purporting to distribute securities in reliance on an exemption (i) from section 61, or (ii) in an order issued under section 76." And (h) refers to "a transfer agent or registrar for securities of a reporting issuer." Then (i) refers to "a director or officer of a reporting issuer" and "(j) a promoter or control person of a reporting issuer; (k) a person engaged in investor relations activities on behalf of a reporting issuer or security holder of a reporting issuer; (l) the Canadian Investor Protection Fund; (m) a person providing record keeping services to a registrant."
That gives the executive director the power to appoint a person to review the business and conduct of that person and find out whether they've complied with the act or the regulation or any decision. It's fairly broadly cast. The mechanism as to how this would work and who would be designated as a person to review the business, what type of person is envisaged — obviously a knowledgable senior person…. It's not entirely clear who that might be.
That's the first part of the proposed amendment in section 130. Then further in section 130, what's provided for…. It gives that person the authority to go to the business premises, copy records, remove records and generally examine records. So it gives them some power.
The subsequent provision in the same section gives them the power to enter a private residence upon making an application to the Supreme Court. That's particularly the case where a person's business premises may also be their own private residence. So keeping your business records in your private residence and conducting your business there would not give you an exemption from the search provisions that are set out there.
There are then some further technical amendments set out in section 132. These are described in the annotated notes as expanding "the power to ensure compliance with decisions of the commission or executive director made under the act."
[Mr. Speaker in the chair.]
Again, I would say parenthetically, it simply broadens the ambit of this regulation by substituting for the words "in the regulations," and substituting for that, "in this Act, the regulations or a decision." So it's compliance not only with regulations but with the act or a decision of the commission, which is a bit broader.
I would say that, really, the issue often in these matters, if there is a somewhat broader ambit there, is the enforcement itself. Certainly, the series of very sad cases chronicled by Mr. Baines in the Vancouver Sun, who follows these matters rather intensely and is well known for his interest and the detailed reporting on these matters, in particular in the exempt market…. The issue is really enforcement. Whether that will lead to further enforcement, I suppose, is really the question.
The final technical amendment that this also brings about in section 132 is that the commission is empowered "to consider decisions made by non-government regulatory agencies," which again broadens the ambit of what the commission may consider.
I would be interested in pursuing this further at the committee stage. I think it's important that the exempt market be cleaned up. It's certainly a blight on the financial landscape here in British Columbia. It too is well known across the country, and the cases that see people systematically and repeatedly defrauded over the years of their life savings are really sad indeed. I'll be interested in discussing further whether these proposed amendments have the effect that the minister states that they might.
With that, I conclude my remarks and give way to my colleague from Nelson-Creston.
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M. Mungall: I rise to speak in support of a particular section of this bill, and that has to do with student aid. What this bill does is amalgamate the provincial and the federal delivery of student aid. So while the province will still be making its decisions and have jurisdiction over its policy around student aid, what it does is allow for students to have one application, one repayment process and one service entity where they can ask their questions and get their support.
This, of course, is very good for students. It basically is one student, one application, one loan. It is a tremendous increase in convenience and administration for students in their personal lives, dealing with their student loans. This, of course, was already started this year for students, but what this bill does is date it back to, I believe, August 2000. So anybody with a student loan dating back to August 2000 is going to be able to benefit from this increased convenience in their lives in dealing with their student loans and their repayment process.
But I do need to point out, for the benefit of people who are listening at home but also for the benefit of the government, that this has not been the top-of-mind issue for students when it comes to student aid. The advocacy for that top-of-mind issue does continue. I'd like to take this time to point out that this bill does not address those top-of-mind issues, which are the interest rates and the current debt levels that students experience.
The average debt level for students is $27,000 after a four-year program. They are paying, on top of that, prime plus 2.5 percent in interest, so that brings it to about another $8,000 out of their pocket and back to government so that they can go to post-secondary education.
This has warranted an incredible amount of criticism, not just from students, not just from their families, not just from faculty, but also from the administrators of our post-secondary institutions across British Columbia. They are very concerned at the debt levels that students are experiencing. This has been the top-of-mind issue for people within the post-secondary sector, and yet it is not addressed at all in this bill and has yet to be addressed at all by this government.
That is a tremendous concern, and that's something that needs to come forward by this government much sooner than later. Hopefully, they will start to work on this issue because that is the issue that students, their families, faculty and administration — everybody in post-secondary — want to have addressed.
This is very nice. It's very convenient. It'll make students' lives easier. But what would really make students' lives easier is eliminating interest on student loans, and that does remain in the purview of this government.
Mr. Speaker: Seeing no further speakers, the Minister of Finance closes debate.
Hon. K. Falcon: Just starting with the last speaker first, the MLA for Nelson-Creston, I thank her for her comments. As I say, just based on my own experiences as a student and probably the member opposite and others that enjoyed the opportunity of a post-secondary education, all of us can look back and remember just how nonsensical it seemed to have to deal with two different administrative structures — to be filling out a loan application for the B.C. student loans, then filling out a separate one from the Canada student loans, and then of course having two separate payments for the two different loans.
Of course, after I graduated I was making payments for at least ten years, I'm pretty certain of that, and having to manage both the different payments on both the different programs.
I thank the member for her comments, because I agree that I think this will simplify the life of many, many students and, at the same time, provide the value that the public expects from government, to try and find ways to do things simpler and at lower cost and better outcomes for those we try to serve.
With respect to the MLA for Surrey-Whalley, I want to thank the member for his thoughtful comments. The member and I actually talked at some length over the issue of the exempt market. We both recognize that a market that raises $10 billion a year of capital for our business — our small business community, in particular — is a valuable market. We understand the importance of it, but there is clearly a small group, as there often is, of unprincipled individuals that will try and prey on the unsophisticated, which is often what the exempt market can attract, if not careful.
In spite of the provisions that are attempted to be put in place to ensure that people understand up front the risks they may be taking in investing in that market, there are still, as we say, unprincipled characters that do take advantage of individuals.
The amendments we're bringing forward today in the Securities Act under Bill 17 are really about trying to address and provide additional powers to the Securities Commission to be able to better head off those unprincipled players in the market and also, more importantly perhaps, to be able to provide quick and fast restitution to individuals that may have been wronged and have suffered financially, by ensuring that they can have a process other than having to go to court and spend a lot of money and a lot of time and a lot of frustration and headaches trying to receive the recompensation that they're certainly deserving of in cases where there is clearly a wrong.
With that, I thank the members opposite for their input. I move that second reading of Bill 17 proceed now.
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Hon. K. Falcon: I move that the bill be referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Bill 17, Finance Statutes Amendment Act, 2011, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. M. Polak moved adjournment of the House.
Mr. Speaker: This House stands adjourned until 1:30 this afternoon.
The House adjourned at 11:54 a.m.
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