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
Thursday, April 1, 2010
Volume 13, Number 5
Introductions by Members
Statements (Standing Order 25B)
Cancer awareness and treatment in B.C.
Wolf encounter in Prince Rupert
St. John Ambulance
Impact of harmonized sales tax on sports organizations
Hon. C. Hansen
Implementation of harmonized sales tax
Hon. C. Hansen
Court fees and access to justice system
Hon. M. de Jong
Addiction services for problem gamblers
Hon. R. Coleman
Funding for crime prevention in Surrey
Hon. R. Coleman
Hon. M. Coell
Orders of the Day
Second Reading of Bills
Bill 9 — Consumption Tax Rebate and Transition Act (continued)
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Tourism, Culture and the Arts (continued)
Hon. K. Krueger
S. Chandra Herbert
Estimates: Ministry of Agriculture and Lands
Hon. S. Thomson
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THURSDAY, APRIL 1, 2010
The House met at 1:33 p.m.
[Mr. Speaker in the chair.]
Introductions by Members
N. Simons: I'd like to welcome all the guests to the House today. It should be informative, if not entertaining.
Hon. I. Black: I've got my entire family here today for the first time since I was elected in 2005, and today I'm actually going to remember their names. I think it's a by-product of this job, perhaps.
Hon. I. Black: I'm hearing the endearing comments from across….
My wife, Chris, is here; and my son Thomas and my son Jordan and my daughter Danielle are all in the precincts, a couple of them brave enough to watch question period. Would the House please join me in making the most important people in my life feel most welcome.
Hon. I. Chong: Earlier today I was pleased to be joined by members from both sides of the House to help mark April 9, next Friday, as Daffodil Day. As many of us are aware, it has to do with the Canadian Cancer Society promoting education and awareness about a preventable disease but one that nonetheless affects so many of us.
Joining us in the gallery today are two representatives from the Canadian Cancer Society: Barbara Kaminsky, the CEO of the Canadian Cancer Society, B.C. and Yukon chapter; and with her, Catherine Loiacono, who is the manager of media relations.
While I would like the House to make them welcome, I just wanted to add that so many of us have been affected by cancer, and even members of the Legislature have, as we all know. In the 14 or 15 years that I've been here, former members Penny Priddy, Helmut Giesbrecht, Chuck Puchmayr and our beloved Stan Hagen have all been affected, and even current members now, during this time — the Leader of the Opposition, the member for Juan de Fuca and others.
It really knows no boundary. Each and every one of us who can work together to deal with this disease will make our community stronger.
I would ask the House to please make Barbara and Catherine very welcome today.
J. Rustad: It's a pleasure to introduce Kellen Vaesen, who is a political science student from Camosun College. He is here to see what we do and how we do it. Would the House please make him welcome.
(Standing Order 25B)
CANCER AWARENESS AND
TREATMENT IN B.C.
D. Black: One in three British Columbians will be diagnosed with some form of cancer during their lifetime. More than 20,000 people will be diagnosed with cancer here in B.C. this year alone. This is a disease that has affected all of us, either directly or indirectly.
B.C. achieves some of the best cancer outcomes anywhere in the world. We've been leaders in cancer screening and treatment. Research in B.C. has led to breakthroughs that have benefited cancer patients here and around the world, but there's still a long way to go.
Like most of us, my family has been directly affected by cancer. I'm the mother of three sons, two of whom have experienced the cancer journey — one as an infant and one as a young university student. I know personally that cancer not only affects the person who is diagnosed; it affects everyone in the entire family.
The B.C. cancer clinic is among the best in the world. The incredible doctors, nurses and related health professionals are truly a godsend to the patients and their families undergoing difficult treatment.
Both my sons recovered and now lead healthy and productive lives. It's a tribute to the work that's done by the Canadian Cancer Society, the programs they fund and the ongoing research that will bring us to the day when a diagnosis of cancer is nothing but a bad memory.
I urge all of us to proudly wear our daffodil pins, to show our support for the Canadian Cancer Society and to also show those people who are now undergoing treatment that they are not alone.
G. Hogg: The statements on cancer in this House today, I think, indeed do reflect the impact it's had on all of our lives. Barry, John, Stan, Carole, Sindi, Wally, Penny and Chuck — names of our friends, friends from this House. Names that will be joined by over 20,000 more names this year — names from houses across British Columbia. All names of people who have dealt or will deal with cancer.
Every three minutes another Canadian is called to the challenge of dealing with cancer, and one in three of us will be diagnosed with cancer during our lifetime.
The Canadian Cancer Society, British Columbia and Yukon, has shown us how we can provide support. With 20,000 volunteers and over 24,000 more event participants, the society has raised awareness, promoted prevention
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and funded research. Survival rates have improved from 30 percent in the 1960s to over 60 percent today. With our support, with everyone's support, these rates will continue to improve.
We ask that we please show our support. Our daffodil is our badge of commitment. We should wear it proudly. We want everyone on a cancer journey to know that we support them — that we are here to support each other and to eradicate cancer.
April is Daffodil Month. April 9 is Daffodil Day, and B.C. is the first province to use these durable daffodils. Let us also be the first province to show that we care every single day.
J. Kwan: I rise today to pay tribute to a woman who was deeply committed to her family and equally committed to being a teacher, both by profession and in the community she served so energetically for over 40 years.
Maria Ho, known as Mimi, fell ill suddenly on Wednesday, March 10. She was diagnosed with an inoperable brain condition at the hospital and died peacefully the next evening surrounded by her husband, three daughters, grandson, and other close family members and friends.
Mimi founded the Strathcona Chinese Dance Company at the community centre in 1973 and was artistic director for 37 years until her death. The company has performed countless times in locations across Canada and in many places around the world.
Mimi's dedication to dance as a cultural expression did not end with her artistic leadership. She was also a very determined and successful fundraiser so that the costs of productions, costumes and travel were covered. In fact, I ran into Mimi just a few months ago at a fabric store, and — yes, you guessed it — she was looking for material for her dancers that she could produce for their productions.
Mimi was a recipient of many local, national and international awards of recognition, too many to list here, but they include a Civic Merit Award from the city of Vancouver in 1996, several cultural services awards from the government of Macau and a Certificate of Merit from the Prime Minister of Canada in 1998.
Mimi's efforts extended to other community organizations and causes as well. Among other things, she was a founding and life member of the SUCCESS Foundation and a life member of the Chinese Benevolent Association of Vancouver. Over the years, she raised money for the cancer research fund — very fitting that we're wearing daffodils today — Vancouver's Children's Hospital, flood relief in China in 1991 and 1995, and she raised over $10,000 for the Sichuan earthquake relief in 2008.
There will be a memorial service to honour Mimi April 3 at 2 p.m. at the Chinese Cultural Centre. I invite all who knew her to attend.
J. Thornthwaite: I rise to speak in recognition and support of Autism Awareness Month and to acknowledge World Autism Day, which takes place tomorrow. Autism is the most common neurological disorder, affecting an estimated one child in every 110. It is more common than pediatric cancer, diabetes and AIDS combined. Tens of millions of people throughout the world are affected.
Across my riding of North Vancouver–Seymour I have numerous friends and colleagues who are parents of children with autism from all levels of the spectrum, and I cannot begin to appreciate their day-to-day struggles.
There is much we don't know about autism, but what we do know is that it affects four times as many boys as girls. There has been a marked increase in the numbers of children diagnosed in recent years. It knows no geographic, ethnic, racial nor socio-economic boundaries and may impact verbal and non-verbal communication, social interaction, cognitive ability, behaviour and sensory perception, making it difficult for those affected to tell us how they are feeling, what they need and how they see and interact with the world around them and the people in it.
It is a lifelong disorder, and at this time there is no cure. Someone once said that to know one child with autism is to know one child with autism, a line that speaks clearly to the truly unique way autism affects the life of each individual it touches.
In the House today I'm sure many of us have a personal connection to autism — a son or daughter, grandchild, niece, nephew, a child of a colleague. Autism Month and World Autism Day remind us to support those affected by autism, ensuring that all children and youth are valued, respected, and supported in achieving their potential.
WOLF ENCOUNTER IN PRINCE RUPERT
G. Coons: Wildlife is a daily feature of the north coast — whether it's deer, eagles, ravens, whales, bears or wolves — but recently on the streets of Prince Rupert, we had a community rescue of Bob the pug.
There have been several situations in the last couple of weeks of brazen wolves prowling the streets. Last year there were 136 sightings. Reports to the RCMP and media seem to alleviate most fears, but when Norm Hebert came home and thought he saw Bob the pug playing with another neighbour's larger dog, he was a bit taken aback when poor Bob was in the jaws of the wolf.
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Aiming to end the attack, and as a typical Canadian, Hebert rushed out and whacked the wolf with the first weapon at hand, a Sher-Wood featherlight hockey stick. Despite all manufacturer claims that the stick's carbon-fibre shaft allowed for accelerated recoil and energy transfer, the Sher-Wood failed to have the desired effect on the seasoned predator. The animal merely trotted off with poor Bob neatly clutched between its jaws.
The call went out, and Trevor Deschamps rushed out to help — Bob's owner. Eventually, the neighbourhood posse arrived. They cornered the wolf, and the wolf dropped Bob. Bob had been punctured, but his pride was still intact — well, mostly. But it may have been Bob the pug's pudgy waistline that prevented the potentially fatal attack. Apparently, he was too fat for the wolf to get a good bite on him, Deschamps said.
Since this thwarted apprehension, Bob has refused to eat his dry food. Apparently, only Black Forest ham and cheese will do. The Deschamps were commenting a week before that maybe they should put Bob on a diet because he's getting kind of fat, but now they realize that that might have saved his life.
We may have learned a valuable lesson from Bob the pug. When wolves are at the door, that extra serving that we traditionally hold back from may come in handy.
ST. JOHN AMBULANCE
M. Dalton: I'm pleased to recognize the work of St. John Ambulance here in British Columbia over the past 127 years. As Canada's standard for excellence in first aid and CPR services, St. John Ambulance plays a valuable role in our society. The origins go back to one of the world's oldest humanitarian organizations, the Order of St. John, which began 900 years ago in Jerusalem.
Today there are 25,000 volunteers in Canada who provide an incredible two million hours of volunteer help annually, from teaching an 11-year-old how to care for children while they're babysitting to teaching a dentist CPR for health care providers, to teaching a family how to resuscitate their family pet.
St. John Ambulance trains 550,000 Canadians annually. St. John Ambulance volunteers serve communities with top-level first-aid response in health care services.
They've recognized that people can benefit physically and emotionally from regular contact with the unconditional love of a dog. With their therapy dog services, volunteer handlers and their dogs visit hospitals, seniors residences and nursing homes on a weekly basis to help raise the spirits of those people who need it most.
In my constituency, Adriana Smith heads up our local St. John Ambulance brigade in Maple Ridge. With 25 adult and 30 cadet volunteers, it seems that whenever and wherever there are major events happening, you'll find them there, providing first-aid support for our community.
The worldwide mission of the Order of St. John is simple: to prevent and relieve sickness and injury and to act to enhance the health and well-being of people of all races and creeds anywhere in the world — a straightforward but powerful message for all.
IMPACT OF HARMONIZED SALES TAX
ON SPORTS ORGANIZATIONS
B. Ralston: It looks like the newest name for the HST may well be the hockey season tax. The Abbotsford Minor Hockey Association says that the introduction of the HST will cost them an extra $30,000 a year for ice time. The result: "We will have no alternative but to increase our registration cost. This will make hockey less affordable for some Abbotsford families, thereby taking away the opportunities for some kids to play this wonderful game."
My question is to the Minister of Finance. Why is he taking away hockey from kids?
Hon. C. Hansen: Actually, I would like to put a question to the Finance critic. Why is he taking jobs away from British Columbians? This shift to the HST is one that, as Prof. Jack Mintz has outlined in his report, will generate 113,000 jobs. I know that for families in British Columbia who like to send their kids to hockey camps, having a job is a pretty important part of being able to afford that.
Mr. Speaker: The member has a supplemental.
B. Ralston: It's not just hockey that will cost more. The Abbotsford figure-skating club is also facing increased costs because of the HST. This is what they say about the impact the government's HST deception will have on their organizations: "In order to make up any losses, we will have no alternative but to increase our registration costs. This will make figure skating less affordable to some Abbotsford families, which takes away the opportunity for some kids to participate in this athletic and graceful sport."
Again to the Finance Minister, and maybe he could address this question rather than some fictitious question he's conjured up in his own mind: when will he abandon his plan to tax hockey and figure skating?
Hon. C. Hansen: That's exactly why we brought in two very important measures to offset the very small incremental costs that some families may bear as a result of the harmonized sales tax.
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One of them is the HST tax credit, which results in 1.1 million British Columbians receiving a cheque in the mail every three months, and the other is the increase in the basic personal exemption to now $11,000 a year, to make sure that British Columbia families are paying less in terms of income tax. They'll have more money in their pockets so that they can actually use that to cover some of those things that will cost slightly more.
Maybe when the member gets back on his feet for his next supplemental, he can tell us what is going to happen to the HST if — God help us — the NDP ever got elected. Are you going to repeal it, or are you actually going to stick with it, as the Finance critic had said previously?
Mr. Speaker: The member has a further supplemental.
B. Ralston: The HST won't just hit winter sports like hockey and figure skating. The HST also applies to field rentals, meaning that spring and summer sports like soccer will be hit by this government's HST agenda as well. Again to the Finance Minister: how can he justify slamming minor league hockey and soccer clubs with a 7 percent tax increase?
Hon. C. Hansen: I'll tell you who's skating. It's the Finance critic. Is he in favour of the HST staying in place, or is he going to repeal it? Does he agree with the member for Cariboo North that harmonized taxes are good, or does he agree with the Energy critic that it should be repealed and a whole bunch of other taxes should be jacked up? Tell me, Mr. Speaker.
My question to the Finance critic is…. Quit skating on this issue, stand up, and tell us what the NDP position is.
Mr. Speaker: Members.
M. Sather: It's not this side that's confused about the HST. It's that side that's confused. We're against the HST. Lori Josephison….
Mr. Speaker: Member. Member. Just take your seat for a second.
M. Sather: Lori Josephison is vice-president of the Meadow Ridge Female Hockey Association. She is concerned — and her organization is — that they won't survive because of decisions made by this government. First of all, they knocked their gaming grant from $28,000 down to $6,000, and now, unless this government sees the light, they're soon going to be paying the HST on their ice time. That's two-thirds of their costs.
She said: "It's frustrating. We're all volunteering, trying to provide these kids with an opportunity to play hockey and be active, but it seems like we're getting no help."
To the Minister of Finance: will he give a helping hand to sports organizations in my community and across this province by cancelling the HST?
Hon. C. Hansen: I'm not sure whether I heard yet another policy pronouncement there from the NDP back bench. I think that might be now five different positions we're up to in terms of their position on the HST.
Let me, just for the benefit of the House, inform the members opposite that in fact registration fees for programs for children 14 years of age and under at public recreation centres and in not-for-profit sports organizations are currently exempt from the GST, and they will be exempt from the HST.
S. Fraser: The reality is that this minister is taxing hockey. This is Canada. This place should have a penalty box, and that minister should be in it for misconduct.
Five years ago this government promised to make B.C. a model for healthy living and physical fitness — remember? It was part of their five great goals of the golden decade. How's that going for you? Taxing hockey….
Mr. Speaker: Members. Members.
S. Fraser: More like fool's gold decade. We're not….
Mr. Speaker: Member, just take your seat.
S. Fraser: We're not even halfway through this so-called golden decade, and this government introduces the HST, an extra 7 percent tax on ice time and field rentals, a tax that makes sports like hockey and soccer less accessible, more expensive for kids and families in this province.
Again to the Minister of Finance: how will introducing a tax on soccer and hockey improve fitness in this province and live up to the model of healthy living and the best fitness in the country?
Hon. C. Hansen: Actually, it's this member from Port Alberni who is on pretty thin ice with this subject. We are the jurisdiction in Canada that has the best health outcomes. We are the jurisdiction that…. We are the government that has actually provided more support
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for amateur hockey around the province than any other government prior to us. That includes the funding that went into the new sportsplex in my hometown and birthplace of Port Alberni — in his riding.
HARMONIZED SALES TAX
N. Macdonald: Gerry Taft, the mayor of Invermere and a restaurant owner, has written a number of letters in the local paper about his strong opposition to the HST. For his business, a tiny PST saving is insignificant compared to the additional $30,000-plus in taxes collected from customers.
HST is a major problem for his business. He also has a problem — and he's articulated this in letters — with the way the B.C. Liberals have gone about this: "No public consultation, no discussion…a concerted and deliberate attempt to force this on British Columbians mere months after an election campaign."
That is one of the 82 percent of British Columbians who are opposed to the HST — people who understand the HST, people who reject it still, people who thought they were rejecting it during the election.
My question for the minister is this. How can he proceed, with no mandate on this? Or does he have a mandate? Can he point to the mandate that this government has to proceed with the HST?
Hon. C. Hansen: We were elected in 2001 on a mandate to get this economy back on track and to undo the damage done by the NDP government. In 2005 we were re-elected on a mandate to protect health care and education by making sure we have a strong economy in British Columbia. We were re-elected in 2009 to keep B.C. strong and to make sure that we create jobs, that we get back out of this economic downturn stronger and faster than any other jurisdiction. The HST will allow us to do that.
Mr. Speaker: The member has a supplemental.
N. Macdonald: The facts speak differently — don't they? This is a government with record deficits, with jobs bleeding, and yet the minister can stand up and say that.
That is why a full 1/10 of British Columbians support the HST. After eleven months of this minister's propaganda, a full 1/10 of British Columbians — one in ten.
A gentleman phoned my constituency office — Buzz Harmsworth. Buzz Harmsworth is a well-respected and long-serving member of the B.C. Liberals, a constituency president in Columbia River–Revelstoke, and he's resigning from the B.C. Liberals. He's a senior. He doesn't like the HST. He does not like the duplicity the HST represents. People do not want the HST. They have been clear on that.
Why such utter contempt by this government for the views of British Columbians? How can the minister stand and justify utter contempt for the democratic will of British Columbians?
Hon. C. Hansen: That's interesting, coming from a member who is part of a party that drove jobs out of British Columbia in the 1990s, net out-migration. Coming from a member of a party that took British Columbia from have status to have-not status.
I would be interested in what this member said back to Buzz. What did this member say back to Buzz? Did you tell him you were going to keep it? Did you tell him you were going to repeal it? Or did you tell him that you were just as wishy-washy as that member's leader is?
COURT FEES AND
ACCESS TO JUSTICE SYSTEM
L. Krog: The B.C. Liberals have apparently decided that justice might be blind, but it can still see dollar signs. High court fees are placing a significant burden on people of modest means. The B.C. branch of the Canadian Bar Association says that these fees disproportionately block First Nations, the disabled, immigrants, single parents and women from full access to justice.
Can the Attorney General explain why, in British Columbia in 2010, the size of your wallet should have priority over the merits of your legal argument?
Hon. M. de Jong: First of all, let me say that I think there is a balance that needs to be achieved between providing a forum that citizens can take disputes to and have those disputes resolved, and understanding that there is a contribution to be made for availing themselves of that infrastructure.
I'm surprised, though, that this member would preface his remarks in the way that he did. He knows, because he was at the announcement, that as a result of the new civil court rules that were announced a few months ago — and they're due to be enacted — for the first time, litigants will be able to go to court for three days and not pay those hearing fees.
Mr. Speaker: The member has a supplemental.
L. Krog: Well, the minister well knows that there are only four jurisdictions in Canada that charge these fees, and British Columbia is the highest. So when access to justice, which is an essential tenet of democracy, is diminished by these fees, why is it that in British Columbia we can't eliminate these fees — when you've got other provinces that eliminated these fees, when the U.S. Supreme Court says fees like this shouldn't be charged? In British Columbia in 2010 why not eliminate these fees?
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Hon. M. de Jong: Well, I guess they are a relatively recent phenomenon in British Columbia, having only been introduced in 1914.
The short answer is this. The fees last year that the member refers to, under the old regime that is coming to a close, resulted in revenue to the Crown of between $1.6 million and $1.8 million. So you could eliminate them. You could eliminate them, and then ask the balance of society, through the reduction of other services, through the increased taxation, to make up that difference.
I think there needs to be a balance, but I do not think it is unreasonable to ask litigants to contribute to the cost of the judicial infrastructure that is there to assist them in solving disputes.
ADDICTION SERVICES FOR
S. Simpson: The B.C. Medical Association has identified 159,000 people in this province who are problem gamblers. Of those, 31,000 people have serious gambling addictions. We also know that the number of people with severe gambling addictions has more than doubled since 2002, yet the B.C. Liberals have cut supports for the programs to assist those people.
We now have the Minister of Tourism promoting a large new casino to help pay for the half-billion-dollar roof on B.C. Place. We know that this minister has previously raised issues about gambling addiction and the impacts on families.
Is the Minister of Tourism confident that the government has done all it can to ensure that problem gambling will not increase due to this casino?
Mr. Speaker: Minister of Housing.
Mr. Speaker: Continue, Minister.
Hon. R. Coleman: I should remind the member opposite that during the '90s, when the members opposite actually decided to expand gaming, they never put any programs in place for problem gaming until it was brought to their attention.
The reality is the budget….
Hon. R. Coleman: I said "until it was brought to your attention," hon. Member, but I know you can't listen, because you're talking too much. But that's okay.
The funding that is in place for problem gambling in British Columbia is based on the usage by people who can phone on a 1-800 line or access services for free — whether they get into difficulty with the gambling be it in a legal opportunity, like we offer, under the management of the province of British Columbia, or an illegal activity. The budget is predicated on the usage and is always there for any problem gambler and will continue to be there at the level that the uptake is there.
Mr. Speaker: The member has a supplemental.
S. Simpson: The Minister of Tourism has been vociferous in his condemnation of gambling in the past, going so far as to suggest people will be dying in the streets. Yet today he's the lead minister to build the biggest casino ever in British Columbia. Where's the hypocrisy in that? This at a time when the gaming policy and enforcement branch notes that B.C. has the highest proportion of problem gamblers over seven other provinces in this country.
Clearly, the minister has reconciled his contradictions on these positions, particularly when his government does so little to support British Columbians who have gambling problems.
Can the Minister of Tourism tell us why British Columbians should have any faith in him when he promotes this initiative on one hand after condemning it only a few years ago?
Hon. R. Coleman: I'll repeat for his information. Last year the actual expenditure on problem gambling was $5.4 million. That was the number of people that actually sought help from us on a free basis across British Columbia that had problems with gambling, no matter where they developed the problem that they had. That program is in place. It will continue to be in place, and we'll continue to support problem gambling in British Columbia.
FUNDING FOR CRIME PREVENTION
H. Bains: Last week there were three murders, and a cab driver was beaten and robbed in Surrey. The community is banding together to fight this violent crime, but unfortunately, this government is cutting funding to one of the organizations that is leading this work — the Surrey Crime Prevention Society. Come next year, they do not even qualify under the provisions of the safety community gaming grants.
My question is to the Solicitor General. How can he justify cutting funding for the Surrey Crime Prevention Society at the very time when Surrey families are looking for solutions to address this violent crime?
Hon. R. Coleman: The member opposite knows well that the grants that are available under the category of public safety and human and social services last year were kept at 100 percent. It will continue to be kept at 100 percent in 2010.
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If the organization has an application or a difficulty, they're welcome to contact the branch. They may have issues with regards to how their society status may be. It may be that they haven't filed the information properly when they made their application. I know that as an MLA you can actually help them with that process, and you can also contact the branch on their behalf with regards to any difficulties with an application.
Mr. Speaker: The member has a supplemental.
H. Bains: Under the funding priority for 2010 and '11 community gaming grants, this is who qualifies under public safety: the search and rescue organizations, the marine rescue organizations, volunteer fire department, amateur radio clubs. Under these rules this society will not qualify for the funding again next year.
This is a society that worked directly with the RCMP, the city of Surrey and Surrey school district. But instead of fostering this volunteer-run crime prevention program, the B.C. Liberals are cutting their funding.
My question again is to the minister. Will the minister commit today that the Surrey Crime Prevention Society will continue to receive funding, without any reduction, so that they are able to continue to provide public safety programs in Surrey?
Hon. R. Coleman: I will repeat that public safety is an area of the grants that wasn't cut, that continues to be fully funded. If people qualify under the program itself, they can make an application. The application will be adjudicated like every other application.
If in the past they were eligible, they may have problems with how they're doing their application, what the eligibility is. They may not actually be delivering a program that actually qualifies. You have to understand something, hon. Member. The grant program isn't to pay for administration or rent; it's to pay for actual programs on the ground on behalf of people in British Columbia that need it the most.
R. Chouhan: Yesterday Ontario boosted its minimum wage to $10.25 an hour. Today minimum-wage workers in Nova Scotia, New Brunswick, Northwest Territories and the Yukon are also getting a raise. But here in B.C. our lowest-paid workers haven't had a raise in almost a decade and are the worst paid in Canada.
My question is to the Minister of Labour. Why is he refusing to give B.C.'s lowest-paid workers a raise?
Hon. M. Coell: The member may know that between December 2001 and today, 391,000 jobs have been created in the province of British Columbia. The average wage in British Columbia is $22.60 an hour, the third largest in Canada. There are 325,000 low-income earners in British Columbia who've paid no tax since 2001 in British Columbia. People earning less than $20,000 a year in British Columbia pay no medical services premiums.
Our job as government is to make sure that people are employed in British Columbia, and we're doing that.
Mr. Speaker: The member has a supplemental.
R. Chouhan: This is such a ridiculous statement that was made. Even Pinocchio wouldn't make a statement like that.
B.C. has the highest level of child poverty in the country. Most of the children live in households where at least one of their parents works full-time. It's a shameful reflection on the B.C. Liberals, but there is one thing the minister could do. He can increase the minimum wage now.
Will the minister do the right thing and increase the minimum wage today and follow the lead of Ontario and other provinces?
Hon. M. Coell: I can remember in the 1990s when truckloads of our young people were moving to Alberta because there were no jobs in British Columbia. This government….
Mr. Speaker: Members.
Hon. M. Coell: In the 1990s the only people who were in business was U-Haul, taking our young people to Alberta for jobs. Mr. Speaker, 390,000 jobs have been created in this province in the last eight years. We've done that through reducing taxes — all the taxes that the NDP refused to support and voted against.
[End of question period.]
Mr. Speaker: Members.
J. McIntyre: Before we leave the House today for our Easter break, I thought it would be most fitting to mark the passing of a gentleman who played a significant role in building this province that we all love and are so proud of. Sadly, Chester Johnson passed away Monday, March 29.
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He was born in Vancouver in 1925 and was a UBC graduate. He gave himself to family and to his work throughout his life.
He made a significant contribution to this province with his leadership in a number of major B.C. businesses. He led Whonnock Industries, West Fraser Timber, B.C. Hydro, Western Pulp, YVR airport, and the Whistler Land Co., where he was instrumental in Whistler's transformation to the huge international resort where we've just hosted the 2010 Olympic and Paralympic Games. He also cofounded Casa Bella Wineries and Fibreco Export, and he served on a number of boards, like Scott Paper, Domtar and Expo 86.
In recognition of Chester Johnson's lifetime of service, he was awarded the Order of Canada, the Canada 125 Medal, the Queen's Golden Jubilee Medal, the Order of B.C. and a lifetime achievement award from the Institute of Chartered Accountants of B.C. He will be truly missed.
Mr. Speaker, I ask that you send condolences to his family, who will be grieving their significant loss, on behalf of all of us here in the House.
M. Mungall: I rise to present a petition.
Mr. Speaker: Proceed.
M. Mungall: I have a petition from 3,047 people in support of the Nelson Health Task Force's call for a resident surgeon and three critical care beds at Kootenay Lake Hospital in Nelson.
Orders of the Day
Hon. M. de Jong: I call, in Committee A, Committee of Supply — for the information of members, the continuing estimates of the Ministry of Tourism, Culture and the Arts — and in this chamber, continuing second reading debate on Bill 9.
Second Reading of Bills
Bill 9 — CONSUMPTION TAX REBATE
AND TRANSITION ACT
Mr. Speaker: Member for Surrey-Whalley continues debate.
B. Ralston: I will take up my remarks from where I left off this morning. [Applause.] I'll give you something to clap about in a moment, I hope.
What I want to look at now in these remarks…. I'm not sure I'm going to have enough time to cover all the topics that this bill presents, but in the brief time that's been afforded to me here this morning and this afternoon, one of the areas that I want to look at is the issue of what studies were done and what support there is for many of the very grandiose claims that are made by the members opposite about the impact of the HST.
[L. Reid in the chair.]
In the fall when we were here, a number of my colleagues asked questions of various ministers in what's called the estimates process. For those of us who may not be familiar with that, that's a process where a minister comes before a committee of the Legislature and is asked — doesn't always answer, but that's their right — a series of broad-ranging questions about the budget and the administrative matters of that particular ministry.
There were a number of questions asked of various ministers, and I can perhaps quote a few here. The Minister of Forests was asked a question about what would be the impact of the HST, and he really didn't have much in the way of an answer. I'm going to quote from the minister. "I'm working from a graph here, so the numbers are going to be a bit rounded. I haven't actually done the exact math."
The Minister of State for Mining was asked about the impact on the mining industry. He said: "Frankly, I'm prepared to accept them at their word, and that benefits British Columbia." So no scrutiny by the government, simply accepting what the industry had to say. That may be one way to do things, but some may say that that doesn't really show much due diligence on the part of the minister in an area he's responsible for.
The Minister of Tourism was asked, on October 26, 2009, by the member from West End, in reference to the HST: "Can the minister table the studies and analysis that show who are the winners and who are the losers under this tax hike?"
This was the response from the Minister of Finance: "I can tell the member that there is not a single business in British Columbia that will not see their costs come down as a result of the implementation."
As you can see, there's a certain rhetorical consistency between these responses, but there's not an answer that's forthcoming. Really, it seems that very little study, if any, was done.
Now, there was one study that was done by the Progress Board. That is a research institute or research think tank appointed by the government. It provides advice to government, although the results of its studies are published publicly.
They did a report on investment in British Columbia, and they did point out the prospective impacts of introducing an HST. Let me quote from that:
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"Revenue that would be lost from rebating taxes on business inputs would be replaced by broadening the tax base. Consumers would face higher taxes on a wide range of services and new housing currently exempt from the PST. Assuming a rate of 7 percent for the provincial portion of the harmonized sales tax, the total federal-plus-provincial sales tax…would rise from 5 percent, the current GST rate, to 12 percent on items such as restaurant meals, home heating, basic cable and phone, and new condo units. In the short and medium term, lower-income British Columbians could see declines in real income as consumer prices rise."
That's the think tank appointed by the government, analyzing the HST.
Contrary to what members of the government have said, what the Minister of Finance has said…. Obviously, there's a strong difference of opinion here, but these are, as the ministers sometimes like to say, "economists" or "respected economists"; the adjective varies. They are firmly of the view that in the short and medium term, lower-income British Columbians could see declines in real income as consumer prices rise. So that's their analysis of the effect of the HST. No wonder that people out there are concerned about the impact of the HST on their budget, on their ability to buy the things they need.
Now, the minister has a response for this. I'm sure if I don't provide it, the public affairs bureau in one of their attack releases — they're, of course, paid by public dollars to attack us — will probably want to point out…. I want to, at least, give a suggestion as to what the answer might be, and then I want to explain just how that answer is wrong.
There will be a credit introduced, according to the minister, and it's in the legislation, for those whose taxable income is less than $20,000, net taxable, or a family income of less than $25,000. The minister very proudly says: "Well, there are 1.1 million people in the province who'll get that credit."
That's really a measure of the breadth of low-income poverty in this province. I don't think it's anything to be particularly proud of, but that's what the minister's answer is. Since there are over four million people in the province and over three million people in the workforce, most British Columbians in that range of two million people or so who are in the workforce and earning more than those net taxable incomes…. They will be paying more. They won't be receiving the credit. They will be paying more.
So it's the impact on what people sometimes call the broad middle class, most people. It's not the people below $20,000 net taxable, who will get the credit, but the impact on the majority of the citizens of the province where the impact will be felt. For the most part, since the lower your income, the more likely you are to spend a higher percentage of your income on necessities, the more likely it is that you will see a decline in your real income as consumer prices rise.
So that's not too along ago. It's not a group that can be accused of having any particular alignment or sympathy with the official opposition. Their board of directors is appointed by the government, and they're there to provide advice to the government. So that's what they said the impact would be. They also said, and this is probably fairly significant: "Public opposition to such a shift would be a substantial concern to policy-makers." Obviously, that's turned out to be very true.
Now, the suggestion is made that, well, this is in the short and medium term that the impact will be felt, but in the long run…. This is what the minister likes to say: "In the long run, there will be some benefits from the HST." Certainly that's his hypothetical that he puts forward. Mr. Mintz, similarly…. His time horizon is ten years. The minister is very fond of quoting what he calls eminent economists. Another eminent economist, John Maynard Keynes said very famously: "In the long run, we're all dead."
So the idea that somehow there's some intangible benefit too far beyond the political reach certainly of this government, in a couple of successive mandates, where the results or not of this measure will be judged is politically convenient, perhaps.
In an era when an economic prediction and economic forecasting have been buffeted and found very deficient in even making predictions six months hence, to make a suggestion that ten years from now something likely will result is not very helpful and not very credible. I don't think many people accept it.
The other document that sometimes the minister likes to quote, and this was the only document that he cited in support….
The reason that I talk about these documents is because when one is making a major tax change that's basically turning the tax collection system and the retail sales tax and the provincial sales tax over, one would expect, given the resources of government and given the policy alternatives that are available to the government, that there would be some significant study before embarking upon this, before venturing off into new directions with huge impacts on everyone in the province — huge impacts on business, huge impacts on consumers — that there would be some study to justify it.
Otherwise, I think, then, my argument that the minister's immediate concern was getting the $1.6 billion in swag from the federal government and beginning to work on his deficit problem really has much more force.
If there are a lot of studies that support this position — the ministry has done its due diligence; the Minister of Finance can show that he did this — then I'd be perhaps more inclined to give him some credit for the strength of his position. Regrettably, Madam Speaker, there's very little evidence of any study done whatsoever. Indeed, in the budget, the fall update, the only document that he cited was one by someone out of Toronto, Michael Smart,
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called Lessons in Harmony, and it's footnoted in the September 2009 updated budget. That's the only study.
To look at that budget before Mr. Mintz came along…. I think the reason Mr. Mintz came along is that the government did go to the cupboard and looked for studies and found that it was completely bare indeed. They felt they had to have at least one study, some kind of fig leaf to cover the argument that they were making.
That's why we saw Mr. Mintz come forward — mind you, well after the decision to take the decision had been made. We're now eight months down the road, on the eve of introducing the bill into the House, and the study was then forthcoming — not something that was done before the decision was made in order to have a rational debate or some alternative options put forward. No, no, this was done afterwards, more as a justification of a position taken, rather than as policy advice as to what might be done.
As the minister says…. He doesn't quote this paper too much any more, but he did rely on it back in September 2009. It's useful to have a look at the paper, because I somehow think the minister supposes that maybe by simply asserting the fact that there is a paper, no one will read it. It may be true that most people don't read it, but I read it with some interest. I think it's worth pointing out what this Mr. Smart does say, because it doesn't really support the minister's argument.
Let me quote from the paper on page 1. One of the arguments that's made as well, and we hear this in very grandiloquent terms, is that there's going to be new investment. There are going to be billions of dollars. This is somehow projected out over ten years. Now, that's not what Mr. Smart says. This is the Lessons in Harmony, C.D. Howe Institute commentary. I'm going to read a quotation from it, and let me begin.
"It is important to emphasize that the increase in investment caused by the HST reform is a short-run phenomenon, as firms have acted to adjust to the new higher-capital stock that is desired when taxes are lower. Whereas the investment effect is transitory, the effect on capital stock and labour productivity is presumably long-run and permanent. However, my empirical methodology, discussed below, does not allow these long-run effects to be estimated directly."
What he's saying in more simple terms, because he's a professor and has a very good grasp of the language, is that there's a temporary short-run increase in investment. It's what he calls transitory, and one can well imagine that companies or firms, knowing that a new tax regime is coming, might well delay investments to take advantage of the new tax regime, thereby causing a temporary bump in investment. It's transitory, and then it's over. Indeed, that's what he catalogued when he was looking at these lessons in harmony in the Atlantic provinces.
So for the minister to say that this paper supports his argument, that there's going to be this dramatic increase in investment that is extending out ten years, isn't supported by this paper or by this professor. Yet this is the very document that he relied on in the budget in September 2009.
There is no support for his argument from this document. The long-run effects…. He can't evaluate them. He quite frankly says that. So the minister is engaging, I suppose, in hyperbole or speculation, put most gently, and I probably shouldn't say what I think I might use if I were to characterize it more harshly. This paper doesn't support his position at all.
Then the other thing that the minister wants to insist on — and this is part of the attack that we hear from the B.C. Liberals and justification as to why this is a great economic initiative — is that, well, you know, prices are going to fall. We hear this argument about embedded taxation. It's all going to come out, and the minister assured us this morning that for sure, he was certain it was going to come out.
That's not what Mr. Smart said when he looked at the Maritime provinces. And don't forget that when the Maritime provinces switched to the HST, they knocked five points off their PST in Newfoundland and four points in New Brunswick and Nova Scotia. So there was a major reduction in the tax itself when it came in, as well as an expansion of the tax base.
What did he find there? Again, let me…. I don't want to be accused of distorting what he said. He said, and this is in his conclusion: "Overall, consumer prices in the harmonizing provinces fell with the reform, although prices rose somewhat for shelter and clothing and footwear, and that fact tended to make the reform slightly regressive." In other words, it wasn't favourable to low-income people. In other words, they paid more. So investment is transitory and the changes are slightly regressive.
That's the paper that the Minister of Finance and the finance department, with all their research capability, with all the Treasury Board people, with all their connections across the country, with all their business contacts…. That's the best they could come up with in September 2009, a single paper that doesn't support the conclusion that they claim and they trumpet here in the Legislature and around the province. Frankly, it's pathetic. It's just pathetic. It really is. That's apparently the best they can do.
Now, I think, sensing the deficiency of this analysis, sensing the weakness of the argument — because one can only carry, I suppose, so far on the kind of faith-based arguments that those on the other side like to advance — they commissioned Mr. Mintz to write a report. Now, what's significant and interesting about Mr. Mintz is that he wrote an earlier report with a couple of other economists back in September 2008. It's called Growth-Oriented Sales Tax Reform for Ontario: Replacing the Retail Sales Tax with a 7.5 Percent Value-Added Tax.
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His co-authors were Peter Dungan, Finn Poschmann and Thomas Wilson.
What's significant in this paper is just what the effect of running what they did in this paper, because they obviously had some research money, was. They ran a simulation, they call it. Basically, you take a number of variables and you plug them into a big computer model that attempts to simulate the economy. Of course, it's not the real economy, and not all the variables are there, so there are always some problems in drawing conclusions from such a simulation. But that's what was done.
What happened when they did this simulation was rather striking, because this is somewhat at variance with what Mr. Mintz does later in the other paper that he did for British Columbia. Basically, what happened was that the effect of the simulation with the 7.5 percent — and I appreciate it's not 7 percent, and that there are slight variations, and the numbers look slightly better…. It's really striking what happens. What happens, and what he says in this simulation, is that in the early years:
"In the first year of harmonization" — this is done for Ontario — "Ontario's GDP is 0.3 percent below the base case, and estimated employment declines by just over 9,000 relative to the base case.
"In the second year GDP loss is estimated to be smaller — 0.18 percent of the base case — but the employment loss is somewhat larger at 16,000, since employment responds with a lag to output changes. Positive GDP gains finally begin in the fifth year of harmonization, although there are still small employment losses through that year."
So five years out in the simulation…. This is Mr. Mintz talking. This is not me talking. This is not some wild-eyed New Democrat. This is not something that the public affairs bureau can say that I made up or something. I'm reading directly from the paper here. Five years out in the simulation there are still job losses when the HST is introduced in this simulated model.
He has an explanation for that. Now, this is nothing like what we've heard from the Minister of Finance. The Minister of Finance: "Hey, it's go. It's straight up. It's job gains all the way. Man, it's just fantastic." Maybe he doesn't like to use that any more. It has a certain association with a former Premier that he's not too fond of these days.
There's no suggestion in anything that he says that there are going to be job losses. Yet here are Mr. Mintz and his colleagues, in 2008, running a huge simulation model of the impact of the HST on Ontario, and the job losses for the first five years.
He goes on to explain this: "There are…two reasons for the model's reported short-term job loss." He calls five years "short term." Ten years is the length of the study that he does for British Columbia. They get back to even, in terms of the number of jobs, in ten years. So it goes down and down and down, and it comes back up. By the tenth year you're at the same level of employment you started out with ten years before.
Very different from what Mr. Mintz has put together for British Columbia, because it's just straight up from year one all the way for ten years — very different. Mr. Mintz, in his paper, doesn't explain that.
In this paper the authors say that it takes…. First, then, they want to explain why this is the case.
"First, it takes longer for investment and imports and exports to respond to the positive opportunities made available by harmonization than it does for consumption — and to a lesser extent, residential housing — to react negatively to the relative price increases that harmonization causes for these categories.
"Second, the CPI shock caused by shifting the indirect tax burden to consumption under harmonization…."
That's his word — CPI shock. That's his word. Consumer price index shock as a result of introducing this tax. It's his word, not mine.
So when people have an apprehension about that, they're supported by Mr. Mintz in this September 2008 paper. CPI shock is how he describes it. That's what's going to happen when the HST is introduced. There's going to be a CPI shock.
Let no one say that Mr. Mintz didn't warn the government, however indirectly, if they'd bothered to read his earlier paper. "It's caused by shifting the indirect tax burden to consumption under harmonization, leads to attempts by workers who are trying to maintain the real purchasing power of their wages to raise nominal wages."
He goes on to say: "Since employers enjoy no corresponding price increase to match the higher nominal wage demands, however, they respond by cutting back output and reducing their workforce relative to the base case."
So workers try to respond to hang on to their salaries. The employers respond by cutting back on hours and laying people off. But there's a conclusion that he has on how this is resolved.
He says: "This is why exports did not appear to respond to improved competitiveness in the first three years of the simulation." Then he says, and this is the key part here for ordinary people:
"After several years of somewhat higher unemployment" — so CPI shock, higher unemployment, job loss and falling exports — "workers come to accept the real wage losses inherent in raising indirect taxes on consumption and the base-case employment levels can be restored with no additional inflationary pressures."
Workers basically fight the attempt to reduce their real wages, and his view is that after three or four years they give up. They accept lower wages. That's what he's saying here. That's the effect of introducing this.
"By the tenth year of the simulation, real wages are almost back to base-case levels and are continuing to catch up to the labour productivity gains achieved by that year. Overall, real personal disposable income is above the base case by the tenth year and continues to rise in later years." So that's Mr. Mintz and his colleagues talking
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about the impact of the HST in a simulation done for the C.D. Howe Institute.
It's 7.5 percent. The numbers are slightly better when you do it for 7 percent, but the basic pattern is clear. Employment goes up. There's a CPI price shock, real wages go down, employers respond by laying people off and gradually they give up. Maybe by the tenth year the employment levels are back to what they were, but there's been, in his view, some gain for that long-term pain over the course of ten years.
That's not the picture that's being presented by the members opposite. That's not the picture that's being presented by the Finance Minister. I'm not sure he's even read this paper. He did have Mr. Mintz out, but Mr. Mintz has a different view in the paper that he did for British Columbia just fairly recently.
He talks in rather different language here. The detail, though, is absent. I'm loath to criticize such an eminent figure, but when one compares — and I'm only comparing between the two — Mr. Mintz's work and his colleagues' in the first paper with the second paper, the second paper is very skimpy indeed, and doesn't really answer the questions, other than to provide the opportunity for the minister to get a clip, if we could put it that way, of professing support for increased jobs over the next ten years.
Now, that's basically what the minister draws from this paper. It's going to be 113,000 jobs over ten years — about 11,000 jobs a year. In an economy where you have 2.3 million people working, 10,000 jobs a year obviously is nothing to be sniffed at if, in fact, that were true. But given what Mr. Mintz says in his other paper, the simulation, I fear that is far from true.
When you balance that against — and I'll get to this a bit later in my presentation…. You have groups such as the Council of Tourism Associations saying that in year one — they've had an economic study done by a respected accounting firm — they're going to lose 7,000 to 10,000 jobs.
Even if you take Mr. Mintz at his word in the B.C. paper as opposed to the Ontario paper where there's going to be job loss in the first five years, and it's going to go down rather than up, you still have the 10,000 hypothetical jobs that he talks about being offset by the 7,000 to 10,000 jobs in one sector alone, the Council of Tourism industries, and they say that will impact in year one.
The grandiose projections of jobs that the minister talks about just aren't supported by this Mintz study at all. When you add in other groups — and I'll get to it in more detail…. We've heard much from the restaurant association and Mr. von Schellwitz. They've made a number of presentations, a number of representations to the government. They've done studies, and they've made presentations. They're very convinced that this is going to have an adverse effect on their industry.
Indeed, when the GST was introduced in 1991, there was a 9.1 percent decline — I believe from memory, but I have the document here if I need it — in their gross revenue. They're predicting a $750 million loss in revenue for their industry.
It's a big sector. It has, I think, 187,000 jobs. So they don't project a job loss number, because that's the choice that they made. But clearly, if you lose $750 million worth of revenue, there are going to be layoffs. There's going to be people moved from full-time to part-time or reduced hours. There's going to be, to use a term that the minister uses, a cascading effect on employment in that sector.
So hypothetical — 11,000 jobs a year from Mr. Mintz. Real people with industry knowledge saying 7,000 to 10,000 in the tourism sector, a $750 million loss in the restaurant sector and consequential job losses and time reduction there.
How are we doing on the job front? I don't sense that the hosannas that we hear from the other side are justified. I don't know why there is this resistance. Obviously, we have a collection of some industry associations. They seem to think that it'll be a good thing for their sector, but the claim is made not specifically for sectors but for the economy overall.
Indeed, Mr. Mintz says…. I think this is a rather unrealistic assessment, but this is what he says. This is from the B.C. paper, because it's a bit different, as I've said, from the Ontario paper: "Even though some particular business activities might not benefit directly from sales tax reform, the significant increase in business activity that will result from reform will help all sectors of the province's economy."
So again, no modelling of this; no suggestion of how this might be so; no suggestion, as in the Ontario case, of initial job loss; the investment lag; the decline in exports; the CPI shock that he talks about — none of that is here.
If you sense a certain skepticism about Mr. Mintz's B.C. paper, you're right. It doesn't fit. It doesn't coincide with what was done in the Ontario paper. I'm loath to criticize such an eminent figure, of course, but it does seem very inconsistent with what he and his group said earlier.
In fact, for that reason, it's just not, I don't think, very valuable, and the conclusions that the minister is drawing from it for political purposes are not justified, not supported and completely consistent with the lack of support that one finds in Michael Smart's paper that was used in the budget of 2009.
There are some arguments that Mr. Mintz advances which I think have to be addressed. One of the things that he talks about is the marginal effective tax rate. A lot of what he bases his judgment on in coming to the conclusion that he does is that the changes that this will bring out will reduce the marginal effective tax rate on capital.
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This is something that comes with a lot of debate. It's certainly not accepted in the economics profession, and there are very contrary views. But in fact, to begin with, B.C.'s marginal effective tax rate is already lower than that of the United States, Japan, France, the United Kingdom, China, Brazil and Australia. That being said, it's still a questionable measure. It's hard to calculate, and economists often produce vastly different results when they do. A number of economists have questioned just how valuable it is.
The Manitoba government did do a study, and they do have some comments on that argument. I want to quote from them on the limits to the marginal effective tax rate analysis. This is a report that was done for Manitoba Finance: Sales Tax Harmonization in Manitoba: What It Would Mean for Households, Businesses and Public Finances, dated December 14, 2009.
They were engaged in a very similar debate, although, unlike British Columbia, they did a study and published it before they made a decision, which is something that didn't happen here. This is published by the Manitoba Department of Finance.
They refer to Queen's University's David Chadwick Smith Chair in Economics Robin Boadway. Here's what Mr. Boadway said: "METRs" — that's the marginal effective tax rate analysis — "capture the effects of taxation in one margin alone, and that is the decision to invest in some capital assets. They do not capture the incentive for firms to hire labour, including the substitution of labour for capital; to innovate; to invest in knowledge; to train workers; or to engage in risky enterprises…. METRs also do not differentiate among industries according to their capital intensity, and therefore according to the magnitude of the distortion that might occur."
There's a note of caution about basing everything on this marginal effective tax rate measure, but yet that's what Mr. Mintz substantially does in his paper. So you have a difference of opinion. What the Manitoba study does is look at some of the other questions that I've also raised. I note parenthetically that they do a précis of the Michael Smart study, and they come to the same conclusion that I do, which is the accurate one.
I'm quoting from the paper here: "This July 2007 report by Michael Smart on the impact of the HST in the Atlantic provinces concluded that overall consumer prices fell 0.3 percent but rose somewhat for shelter, clothing and footwear, while investments in machinery and equipment experienced a short-run increase greater than 10 percent. These results, though empirical, should be interpreted cautiously because the adoption of the HST in Atlantic Canada entailed not only a shift in tax bases but…a significant reduction in the average provincial sales tax rate from 12 percent to 8 percent."
They adopt the same position, in my interpretation, and that's, I think, the accurate view of that particular paper — not one shared by the government, obviously.
When you look at decisions to invest, though, and what the METR analysis doesn't contain…. Manitoba went on to look at other business costs and their effect upon investment. They note that KPMG regularly reports on tax competitiveness and finds that virtually all Canadian cities, including Vancouver, which ranks 58th out of 59 U.S. cities for manufacturing tax competitiveness and for overall business tax competitiveness….
"However, when taken together with other factors influencing the decision of where to locate a business, including labour costs, exchange rate, facility costs, transportation and utility costs, Canada ranks only slightly ahead of the U.S., which shows that the focus on improving Canada's business competitiveness does not need and cannot come through tax policy alone."
The Manitoba Department of Finance also maintains a manufacturing competitiveness model which simulates — this is another simulated model — the start-up, operating, financial and tax costs over a 20-year period for a manufacturing firm with revenue of $45 million and 220 employees. In the crucial measure of internal rates of return, Vancouver ranks fourth for small manufacturing firms and third for large manufacturing firms of eight larger Canadian and U.S. cites compared, and still ahead of Calgary, Minneapolis, Toronto, Chicago and Atlanta.
Furthermore, the report notes that even if Manitoba implemented the HST along with B.C. and Ontario, the tax competitiveness of its manufacturing centres would improve only by 1/10 of 1 percent, and the relative ranking would not change. The Manitoba report concludes that Manitoba and B.C. already enjoy very competitive tax rates as it is now without the implementation of the HST.
There's more that goes into and more that should go into the kinds of comparisons that are made about tax competitiveness, the decision to invest beyond the METR analysis, yet Mr. Mintz is….
Really, when you read this very brief paper on British Columbia, that's the gist of his analysis. He makes some assumptions further in his analysis, which is criticized by other economists, about how he calculates the effect of the substitution of capital for labour. Ordinarily, if you substitute capital for labour, you get fewer jobs, not more jobs. He doesn't really have an effective answer to that, and there are some questions about that.
Overall, I think it's fair to say that the weight that the Minister of Finance…. He's kind of done it all or nothing on this one. This is the document that he waves around and says — and we've heard him in question period; we've heard him in his speech introducing this: "This eminent economist — this is the argument
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that justifies what we're doing." It just doesn't bear the weight that he puts on it, and frankly, the argument is very weak indeed. It's very weak indeed.
Why would you engage in this kind of huge tax change on such a weak basis? I think the answer is: because the minister needed the cash. He needed the $1.6 billion. All the rest of it was an ex post facto justification or rationalization for a decision that he made for a very different purpose. He's been scrambling ever since to try and find some arguments that work, and he hasn't succeeded.
This Mintz report is…. You know, there's something there. I'm sure that some jobs maybe will result. Whether they can be attributed to the change in the HST, which is hypothesized, is not really entirely clear. Certainly, what I think the minister was looking for is a simple statement without a footnote that he could use in news clips. That's what he got, and that's what he's using it for. It doesn't mean that it's something that's accurate or bears the weight of analysis that he would seek to put upon it.
Now, just to return momentarily…. Time is just rushing by here, and I don't have very much time to speak here today. I want to look at the conclusion that the Manitoba government came to about the HST and why they came to the conclusion that they did.
They're very conscious, in their study, of comparative, competitive business costs. They're very attuned to that, and they make that very clear. This is a serious analysis. This is not something that's taking lightly the issue of business competitiveness with other jurisdictions and the need to continue to attract investment and maintain jobs, although they probably put a little bit less emphasis on footloose global capital than they do. Manitoba has had historically, I think, some difficulty in attracting capital, given its location and relatively small population.
What they do have in Manitoba is, I think, regarded as a fairly diversified economy for its size. It's not known for rapid growth, but it's been known for steady growth. They've certainly tried to maintain that — encourage and support business and jobs in Manitoba. I don't think that's any surprise.
When they came to consider seriously the issue about whether to sign on to the HST, they did their study and came to their conclusion.
Deputy Speaker: Thank you, hon. Member.
B. Ralston: I had so much more to say. I'm looking forward to resuming this at a later time.
J. Les: It's a great pleasure for me this afternoon to rise and make a few comments on Bill 9, the Consumption Tax Rebate and Transition Act. I want to make very clear at the outset that I am 100 percent supportive of this legislation.
I believe very strongly that this helps lay the foundation for a strong and secure future for British Columbians, a future where jobs will be more plentiful, where taxes will be more modest. I think the families of British Columbia will know — perhaps not today, because there's an awful lot of misinformation that's being propagated in various sectors, not least of which by members opposite — as time unfolds that this is a shift that is beneficial for all British Columbians.
I think it's fair to say that a measure of this nature is complicated and legitimately raises questions in people's minds, and that's fair. There's no question that a lot of these questions are legitimate. But I think it's equally important, then, that we all do our best to make sure that we keep a few facts in mind.
As I listened to the member opposite — and I listened to his entire speech as it unfolded this morning and again as he continued this afternoon — I found precious little in his remarks that would have persuaded myself and perhaps other British Columbians who have an open mind on this issue. I found precious little in his remarks that was anything like persuasive.
I've listened to other members opposite in response to the Speech from the Throne, for example, just a few days ago. One of the experienced members of the opposition, a member who has been here for 15 years, made a comment: "The simplest way to determine what items or services will go up by 7 percent on July 1 is to look to see if you pay GST on it now. If you are, then with a few exceptions, it's going up." Well, all that betrays…. A statement like that simply betrays that that member has no idea as to how the HST will apply to the economy.
When you look at the comments that were made in a brochure, apparently by the member for Delta North suggesting to his constituents that a $20 meal would now be costing in the neighbourhood of $25…. Again, a complete fabrication. It is no wonder, then, when that kind of so-called information is propagated to British Columbians that they become bewildered and confused. I think even members of the opposition owe their constituents and all British Columbians a better deal than that. I think they actually should provide an even-handed evaluation of the HST, as it will come into place in British Columbia.
Now, the previous speaker made much of the fact that Jack Mintz, in an older report — I believe from 2008, when there was no agreement between the federal government and the province of Ontario — had certain things to say, and in his most recent report in British Columbia was considerably more positive. Well, that's no huge surprise. The terms and conditions under which Ontario and British Columbia have entered into this harmonized approach to their sales taxes is remarkably different than what could have been achieved in 2008, when the federal government was much more rigid in its approach.
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Clearly, it's fair to say that the federal government has become more flexible and that as a result, the 2008 report is very likely out of date. For the member opposite to suggest that Dr. Jack Mintz's report — the most recent report commenting on the implementation of the HST in British Columbia — is incorrect or is somehow a distortion is, I think, very disappointing. I think the reputation of Dr. Mintz is beyond dispute, and I take at face value the suggestions that he puts forward.
However, let's just put on the record exactly what Dr. Mintz had to say. He said: "British Columbia's harmonization of its sales tax with the federal goods and services tax will result in a giant leap in the province's competitiveness, both domestically and internationally." Not just a tepid leap, not a small leap, but a giant leap forward is what Dr. Mintz is talking about.
Now, that giant leap in the province's competitiveness — there is no question — will result in lots more jobs, lots more investment in this province, which we're already expecting. But this will be an increased tonic to the economy of this province.
He goes on to say: "It will also reduce the marginal effective tax rate on capital for all industrial sectors and all sizes of business" — small business as well as large businesses, in British Columbia.
Don't forget. It is businesses, both small and large, that employ British Columbians. When their marginal effective tax rates go down, they are more likely to create jobs. They are more likely to be able to pay their employees more money. I think that is the kind of future that British Columbians are interested in.
I know that members of the opposition sometimes are very leery of tax relief. I think it's now about 120 different measures of tax relief that have been put in place by our government since 2001, and somehow that never seems to engender any kind of enthusiasm on the opposition benches. There's always that look of regret on their faces as tax relief is implemented.
They actually favour more taxes. We've heard the opposition Finance critic talking about the machinery and equipment tax and the removal of that actually not being worth very much. That was certainly disappointing to hear from that member.
The member for North Island — I think it was about two years ago, with the implementation of the carbon tax — spoke up in this House, and she admitted to regretting the fact that that carbon tax was being offset by personal income tax reductions. I might be paraphrasing slightly, but she said: "And then they went and wasted it on tax cuts."
Well, most British Columbians would entitle that "tax relief," and they are pleased when government actually doesn't raise taxes and provides tax relief. But the member for North Island actually termed tax relief a waste. I think that was a defining moment, actually. There are many, but that was one of them. On this side of the House, on the government side of the House, we enjoy tax relief on behalf of British Columbians, but on that side of the House, amongst the opposition benches, they never saw a tax increase they didn't like.
The opposition Finance critic quoted at some length from a couple of studies. I noted there was one study he did not quote from, and this was a study that was authored by the Canadian Centre for Policy Alternatives — or the NDP-funded Canadian Centre for Policy Alternatives. They recently did a report on the Ontario HST. I will say straight up that their comments were with respect to the Ontario HST, but the principles are the same. There will be a few marginal differences in terms of the implementation of HST in Ontario versus British Columbia.
Here is what they said in terms of the summary of their recommendations: "Families in a wide range of incomes from $30,000 to $90,000" — annually — "should be better off or worse off by no more than about $50 to $75 per year which, given our assumptions and the limitations of the data, amounts to a wash." So when we listen to the stories of the members opposite that this is all gloom and doom, it's not.
The impact, in most cases, is going to be extremely marginal at worst. As I did a couple weeks ago in my remarks on the budget, I would encourage the members opposite to read this study by the Canadian Centre for Policy Alternatives, and I would encourage them to refer to it in their debate on this legislation.
You know, given that the Canadian Centre for Policy Alternatives has been funded by the NDP in the past, I would assume that they would give it some….
J. Les: Funded by the NDP.
D. Routley: At least be factual.
J. Les: The member for Nanaimo–North Cowichan says to me: "At least be factual." Well, I'm prepared to be very factual on that one. On their way out the door, the NDP government in 2001 gave the Canadian Centre for Policy Alternatives several hundred thousand dollars. You can check the record, and I would encourage the member for Nanaimo–North Cowichan to do that. He will find that that was, in fact, the case — NDP-funded Canadian Centre for Policy Alternatives.
Now, it appears the member opposite was a little bit confused on this issue, but you know, there are other members opposite who are somewhat confused. I found the comments from the member for Cariboo North particularly interesting where he said: "You know, the harmonized sales tax was not necessarily a bad thing."
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He had some issues, apparently, with implementation. But he made a straight-up statement. He said that harmonized taxes are not necessarily a bad thing.
I wonder how that squares with what we heard, for example, from the opposition Finance critic this morning and this afternoon, who would have, I think, invited us all to come to the conclusion that it is never a good thing. I found that interesting.
I'm looking forward actually to the remarks from the member for Cariboo North in due course. I think he perhaps lowered his guard for a few moments and, in a moment of candour and honesty, actually betrayed his true position.
There are, of course, numerous people who have come forward and have roundly endorsed the province's decision to enter into this harmonized sales tax arrangement. Let me say, first of all, that it isn't exactly as if this had never been done anywhere before. Some 130 countries around the world have already implemented an HST. It is often referred to as a value-added tax.
If it was so wrong in British Columbia, why did all of those countries implement an HST? Some of those countries are actually countries with a socialist government. Yet they have in place, and have put in place, a value-added tax. So, you know, I suspect that the opposition that we hear from members opposite maybe isn't even rooted in ideology. It is simply rooted in a populist political opportunity. That's what I suspect it is, and that is why their arguments tend to ring rather hollow.
It'll be interesting to see as the next several days unfold, as various members opposite rise to respond to this bill. I would encourage them to explain to the House why various socialist administrations around the world have a value-added tax in place, but in British Columbia somehow it is not the thing to do.
Now, we already heard this morning that Dr. Jack Mintz from the University of Calgary has commented directly on the implementation of the HST in B.C. and has found that over a period of ten years we'll see a net increase of 113,000 jobs, along with the investment that goes with that.
But Dr. Mintz wasn't alone. There was Glen Hodgson, who is the chief economist for the Conference Board of Canada. He's come out in support. John Winter is with the B.C. Chamber of Commerce. He speaks on behalf of all small businesses in British Columbia. He's been extremely outspoken in his support of this measure. Jock Finlayson is with the Business Council of B.C.
From a somewhat different sector, Richard Rees is with the Institute of Chartered Accountants of British Columbia — obviously someone who is very familiar with what works in business and the kinds of choices that governments ought to be making to help to strengthen the economy. He's come out very strongly supportive.
An academic, Dr. Kevin Milligan is at the UBC department of economics. At one of our pan-provincial companies, Robert McFarlane is the chief financial officer at TELUS; Kenneth McKenzie, who is with the Canada West Foundation; Tim McEwan, who is the CEO of Initiatives Prince George, involved, obviously, in economic development at the grass-roots level in that part of the province; Ben Dachis and Alexandre Laurin of the C.D. Howe Institute.
Here in the Lower Mainland David Baxter, who is with Urban Futures, has been a commentator on social and economic issues in the province of British Columbia for a considerable period of time — all of these people have commented on the implementation of the HST and have come to the conclusion that this is the way forward for British Columbia and that this is the way we are going to build a secure future for our children and grandchildren.
There are many, many others who have stood up and said yes, this is the right thing to do.
The B.C. Agriculture Council. Garnet Etsell is their chair. He speaks on behalf of agriculture in British Columbia — by the way, a very important segment of the economy in my particular riding with dairy, poultry, horticulture, blueberries, raspberries. I could go on and on and on. It's a very long list. All of these producers, all of these people involved in the agriculture industry in my riding and across British Columbia will benefit, and they have stood up and spoken clearly and said that this is good for agriculture in British Columbia.
The B.C. Lumber Trade Council. They've made no bones about it. They've said that this is excellent news for British Columbia.
The Canadian Manufacturers and Exporters Association. I'm sure members opposite are quite aware of that particular organization and how they speak for businesses across British Columbia involved in manufacturing, some of which are in my riding.
I'm referring, for example, to IMW Industries, which is a significant business located in my riding.
Hon. B. Penner: And a growing business.
J. Les: It's a growing business, as the Minister of Environment points out, that is involved in developing leading-edge technology and solutions for compressing and liquefying natural gas, exporting to dozens of countries around the world. About 150 people are employed there. As a result of moving to the HST, it secures the future for those 150 employees and is making it more likely that IMW Industries and others like them are going to be able to employ more people at good, well-paying jobs in British Columbia.
The Mining Association of British Columbia has spoken out and said very clearly that this is good for the mining industry in British Columbia.
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J. Les: Now, I hear the member for Maple Ridge–Pitt Meadows having something to say about minimum wage. Well, let me advise that member. He probably is not aware of this, but the average wage in the mining sector in British Columbia is over $100,000 a year. That member sits there and heckles me and denigrates the mining industry. Frankly, he should be ashamed of himself.
The Retail Council of Canada is going to be unhappy if their customers are not happy, but the Retail Council of Canada has recognized clearly that there will be more retail opportunities, because more customers will be buying their retail goods. The Retail Council has come out and been very supportive of the implementation of the HST.
The B.C. Trucking Association has been very supportive. That's Mr. Landry and his group.
The Road Builders and Heavy Construction Association. They have recognized that the construction industry is one of the biggest beneficiaries, to the tune of about $880 million a year. They are one of the biggest beneficiaries of the implementation of the HST, again enhancing the ability of the construction industry to hire more people, to put more people to work and to keep more people at work.
The Coast Forest Products Association has been very, very supportive, as has the lumber industry generally. Again, that is no surprise. This is an industry that requires a lot of capital investment. The existing PST regime, as we all know, penalizes that capital investment. This will provide less of a penalty on those investments.
J. Les: I would assume that the member for Columbia River–Revelstoke, for example, would be pleased that the forest industry agrees with this government that this is good for their industry and is more likely to lead to a recovery sooner in that industry than what might otherwise be the case.
The New Car Dealers Association of B.C., the B.C. Construction Association and the Pulp and Paper Steering Committee are in favour, as well as — I must point out — the Motion Picture Industry Association of British Columbia. I know that there are a variety of members opposite that are very interested in this industry. They have come out and have clearly said that the implementation of the HST is a good thing for the motion picture industry.
And on it goes. The Railway Association of Canada. The Independent Contractors and Businesses Association of British Columbia. Initiatives Prince George, that I've already talked about before. Grass-roots economic development is what they represent. They're in favour. The Association for Mineral Exploration. New Media B.C. The B.C. Shellfish Growers Association. I'm sure that if we worked at it, we could develop a list of companies and organizations of that nature that have spoken out in favour of the HST implementation.
The Canadian Taxpayers Federation has commented numerous times and has said: "Anything that lowers the costs to businesses will ultimately be better for consumers." Another quote: "The HST is a good thing because it simplifies our already very overly complicated tax system, and anything that makes the tax system simpler and more transparent is a good thing."
[C. Trevena in the chair.]
Just let me comment a little further on that. We heard from the Finance Minister this morning that of all of the provincial sales taxes that are collected today, actually 40 percent of those taxes are hidden taxes. They are embedded in the supply chain and are not paid by the consumer at the retail counter. They are hidden from the consumer. That is always a bad thing. It is best when taxes are plainly on view for all to see.
As you know, Madam Speaker, I was once involved in municipal politics. One of the characteristics of municipal government is that they actually send a bill to their ratepayers once a year — very open, very transparent. Every municipal taxpayer is always highly aware of precisely when they're paying the taxes and exactly how much those taxes are. The harmonized sales tax tends to do that as well. I think that is a good thing.
Again, though, it's important to point out that we should not look at the implementation of the harmonized sales tax in isolation. There have been numerous occasions of tax relief over the last decade in British Columbia. One of the best days that we ever had in this province was June 6, 2001, when we reduced income taxes to British Columbians by 25 percent in one day. But we didn't stop there. We continued to reduce taxes and fees a total of about 120 different times as the next ten years unfolded.
Today if you have a senior couple in their retirement earning $40,000 a year…. In 2001 they actually paid $902 in taxes. Today they pay zero in provincial taxes. An individual earning $50,000 a year in 2001 paid just over $3,600 in taxes. Today that individual pays $2,200 in taxes — a saving of over $1,400.
In addition to all of that tax relief, I think it's important to look at all of these measures in context. What we are consistently doing is creating a tax regime in British Columbia that is conducive to job creation, conducive to putting as much money as possible in people's pockets, and allowing them to keep this money to make their own personal choices.
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When you look at the provincial income taxes on up to $118,000 worth of income, British Columbians pay fewer taxes than any other Canadians. That remains true. We even pay fewer taxes in British Columbia than they do in Alberta, but the differences are pretty stark. In British Columbia an individual earning $118,000 pays $9,800 in taxes. In Quebec that same individual pays $17,600 in taxes. So the difference is pretty remarkable, close to $8,000 a year.
That is a great competitive advantage as we compete with all other provinces for talent and for skills that are increasingly mobile today. As these people look for places that they can come to, to start a career, to build a family, to create a future, B.C. has really, I think, recommended itself over the last decade as a place where you can come and do that.
I suspect my time is starting to run short. I've got a lot more material here that I could work with. I understand the controversy that attends this kind of a shift in taxes — I really do — and I have not made my decision to support the harmonized sales tax at all lightly.
All members of the House will be quite aware that I'm from a fairly large family. I have six children. I have 13 grandchildren. I have 11 brothers and sisters, all but one living in British Columbia. I can look each one of them in the eye and say: "You know what? This is the right thing at the right time in British Columbia. This is what is going to give our children and our grandchildren a secure future in our province."
Again, as I've said, the opposition that we hear from the members opposite…. I understand their need to scrutinize and look very carefully at the legislation that government introduces, but so far I've heard very little of substance from the members opposite. I've heard a lot of politicking. I've heard a lot of misinformation. I've heard a lot of preference from members opposite for higher taxes, and frankly, I don't share that agenda.
The agenda that I share is allowing British Columbians to create a strong future with low taxes and with unparalleled opportunities so that we, going into the future, will be able to lead our country in economic development and in job creation and to a sound and secure future for our children and grandchildren.
I see the light is on, Madam Speaker. Before I get cut off by the red light instead of the green one, I just want to say thank you for the opportunity to address this House on this very important matter, but to be very clear, I support this 100 percent.
D. Donaldson: I rise to address Bill 9 in this second reading. Everybody in the province knows it's the HST bill, so I will talk about that in detail. Before I start, I'll make some comments about the Finance Minister's address to the second reading of the bill.
It reminded me somewhat of Alice in Wonderland. I think the Finance Minister has gone down the HST rabbit hole with his spinning and his hard time escaping. People on this side have opinions about who the Mad Hatter is down that hole. But the spinning has gotten out of control, and it's a fairy tale — what the minister was describing this morning.
Here's some history behind the bill that shows that and proves that. This is history that took place around the HST before the election. Some would say and some have typified…. What happened before the election and what this government has said after the election would be typified as misleading. I'll let the electorate decide on that, and they seem to have — with an overwhelming majority not in favour of the HST.
In speaking about what was on before the election, the Premier is quoted on one of the radio programs down here. We don't listen to it too much up in the northern part of the province, but apparently lots of people do down here. It's called CKNW. On August 7 the Premier was quoted as saying around the HST: "The fact of the matter is that it wasn't on our radar." That's a famous statement now. "It wasn't on our radar. We didn't engage in any discussions. I wasn't thinking about it until after the election."
Well, that's very interesting. In December 2009, well before the election, the Premier's own Progress Board recommends the HST to the government. That's four months before the election. I suppose the Premier wasn't listening to his own Progress Board when they were recommending the HST. I guess that means when your own Progress Board is recommending it to you, it's not on the radar.
Sorry. That was December 2009, so that was after the election.
In January 2009 the Ontario Premier says that the government is considering adopting the HST. This is the Premier of the largest economy in the country, so this is what other provinces pay attention to. To think that it wasn't on the minds of the Finance Minister or others here is a little hard to believe.
In March the Ontario province adopted the HST. Again, if you're doing your job well, you're paying attention to what the largest economy in the country is doing. Therefore, you would expect that this would have been something that this government would be discussing and considering.
Then we enter the election campaign, April 14 to May 12 of this previous year. B.C. Liberals made no mention of the HST except in response to a survey from the B.C. Restaurant and Foodservices Association in which they say that they're not contemplating adopting the new tax because of its adverse effects. Not contemplating adopting the new tax because of its adverse effects.
That's the history before the election. What happens after the election? Just a matter of six weeks after the election, June 23, the HST is announced by the Premier
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and the Minister of Finance — just a mere six weeks. It flies in the face of what happened before the election.
They still maintain that there was no contemplating implementing the HST before the election, but through freedom of information, we found that on April 4 the Minister of Finance's calendar shows a scheduled call from the federal Finance Minister, Jim Flaherty. This is one of the major topics in Canada and in the province of Ontario. It's just beyond believability that this HST was not discussed before the election in these kinds of calls.
Afterwards, in some of the explanations around when the first time the HST came up, the Finance Minister maintained that it was on May 25 — so a couple of weeks after the election — in another casual conversation with federal Finance Minister Flaherty, by the coffee machine. It must have been at a summit of Finance Ministers from across Canada.
Again, in casual conversation around the coffee machine, one of the most important legislative implications to our tax policy…. The Minister of Finance says it was the first time he had spoken to the federal government about this seismic shift in B.C. policy.
We have a believability problem here. In fact, people who follow this in the media have said: "Well, if….
Indeed, if we give the believability factor to those statements, then that means the Minister of Finance was oblivious to Ontario's actions for several months before the campaign. That would raise cause for concern that the Finance Minister wasn't keeping track of what the largest provincial economy in Canada was undertaking.
Again, from the media. One of the noted columnists who follow these items closely, Vaughn Palmer, was on a radio show on August 6, 2009. He said: "Well, if this HST idea is such a humdinger for the future of the economy, why didn't they do it before the election?"
That brings us to the question of credibility. Credibility and, you know, lack of credibility around saying one thing and doing another. That leads to cynicism. I'm going to touch on that a little further along in my comments, but it's cynicism that we have to combat. With actions like that — saying one thing, doing another — around the HST…. That increases cynicism in the public around what politics is all about and what the important decisions that we make in the Legislature are all about.
The real reason the HST is being brought in, in many people's minds, is for the $1.6 billion in transfer from the federal government that this government needs because it has mismanaged the economy to one of the largest deficits in history. In order to balance the books, they were dangled $1.6 billion from the federal government, and they took the bait. They needed it because they mismanaged our provincial economy into the largest deficit that we've seen in a long, long time.
Going back to the theme of saying one thing and doing another. The government, before the election, was maintaining that the deficit would never be more than $495 million, a considerable deficit for this province — considerable from where I come from anyway, $495 million — but manageable. It was one of those moments where this government and this minister are on record as saying that it would never be more than $495 million. That was before the election. They stuck to it: "Never more, never more."
Well, after the election, what do we find out? This isn't very far after the election. The Finance Minister introduces a $2.8 billion deficit for 2009-2010 — $2.8 billion, six times, seven times more than what was anticipated before the election. Obviously, people would say: "What's going on here? How come this government doesn't have better economic forecasting? When did the government know about this ballooning deficit figure?"
If they had come clean with that deficit, if they had come clean with their plans to implement the HST, then maybe the election results…. People might have voted differently. If they had at least come clean, people would have had the ability on May 12 to make an informed decision about the policy to implement the HST, about financial management around the deficit.
However, the Finance Minister was quoted on September 1, 2009, saying: "The first time that I ever had any indication from the Ministry of Finance staff that our revenue projections might be taking a bigger hit than we anticipated was actually a casual conversation I had in the middle of the election."
The middle of the election. That's a fine time to actually reveal this to the people of the province — don't you think? If you're running an honest election campaign, you would want to have all the facts out so that people could make an informed decision about who they'd like to have voted for. Putting that information in front of the people of B.C. — that they were going to implement the HST, that they were managing our province into one of the largest deficits ever — would be some good information for people to arm themselves with.
Then, again quoting the Premier, on September 1: "I had heard that revenues were coming off, yes, a week before the election. Well" — then he goes on to say — "maybe the Thursday before the election."
You would think that if the ballooning deficit, which this government professes to be concerned about and professes to be sound fiscal managers around…. You would think that that would be a shocker to them — a shocker — and that they would want the people of B.C. to know about it.
But instead, no, in the middle of the election campaign, a week before the election, they still weren't able to provide that information to the public so that the public could make an informed decision.
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Same with the HST. If they had allowed the public to hear about their plans for the HST — like the Ontario government did, before the election — then the electorate would be able to make a decision based on those factors.
Why this is disturbing is that it shows disrespect, I believe, for the electorate and adds to cynicism in the political process. We have to combat that cynicism, because we know that without people participating in the democratic process, what we do here in the Legislature is at risk. It's at risk.
Another area that doesn't provide much faith and points to a lack of credibility is the maintenance by this government that the HST is revenue-neutral. We heard that many times: revenue-neutral. Well, if you do a proper analysis of the HST and look at all the rebates and write-offs that are associated with it, the input tax credits and others, then analysts have said the government will actually collect $113 million less total revenue under the HST. Less — that's not revenue-neutral. That's actually less.
In fact, another noted columnist who pays close attention to these things, Michael Smyth, wrote recently: "The HST is actually a tax-burden transfer from business to consumers and will not generate a dime to pay for new public services." Not generate a dime. Well, we see that, because it's actually generating less revenue by the implementation of the HST.
Now this again — saying one thing and doing another. "It's going to be revenue-neutral," but in fact after you look at the rebates, the input tax credits, it's going to be hundreds of millions of dollars less than the revenue generated currently. So again, the HST is not revenue-neutral.
Then let's look at one other area, again going back to credibility. After the announcement before the election that there wasn't going to be an HST, then after the election there was. The government understood that there was a huge grassroots backlash against this new tax — and understandably. The public was not informed of the plans before the election, so they couldn't make an informed decision on this government's platform.
What happens afterwards? Well, it's full spin mode, and next the government's saying that the HST is actually going to be allocated to health care. Health care. This is an absolutely ludicrous claim, and it's been roundly drubbed by those in the know in the economic field and elsewhere. In fact, notably in the introduction of this bill, in first reading, we didn't hear the Finance Minister reference the fact that HST was being implemented to pay for health care. So they've dropped that spin. But again, it's a ludicrous claim that revenues pay for health care.
The truth is that almost all revenue, including MSP premiums, goes into the consolidated revenue fund and is spent on all government priorities. So it's interesting because the Finance Minister knows this, and those who are in the know on the government side know about the consolidated revenue fund, know that the premiums and HST revenue go into these kinds of things to pay for other government services and priorities.
As one commentator pointed out how ludicrous this claim would be…. Would it mean that if not enough revenue was being generated by the HST, we would end up cancelling surgeries? That's how ridiculous this claim is around the HST going directly to pay for health care. Just ludicrous.
As another media commentator who follows these things closely, Paul Willcocks, said: "The hokiest part of the budget was the announcement that the HST revenue would be dedicated to health care. It's an obvious attempt at phony spin; all the money flows into general government coffers and is allocated as the politicians choose." An obvious attempt at a phony spin, so it's understandable why we don't hear that anymore — because the electorate didn't buy it, the pundits didn't buy it and most economists don't buy it.
Again, these flip-flops before and after the election on the HST; before and after the election on the size of the deficit, record deficit; the claim that the HST will be revenue-neutral, while in fact it's not — it actually does not generate as much revenue as the current system — and then the claim that the HST is going to go directly to pay for health care…. These are all myths and flip-flops. Again, it leads to cynicism in the electorate.
I took to heart and really concurred with the comments that the member for Richmond East made last week in a statement to this Legislature when she talked about voting patterns and the lack of voter turnout. We've seen a steady decline in that, and I understood the member for Richmond East's passion about this.
She pointed out that in the 18-to-24-year age group we've seen a deep decline, from 75 percent participation rates in elections to 26 percent. One in four people in the 18-to-24-year age group is voting. That is just a terrible, terrible statistic, and part of the reason for that is a cynicism about politicians and about what goes on. What feeds into that cynicism is when you say one thing and do another. That's what's happened with this HST, and that's what this government has done — is add to the cynicism in this province.
In my constituency in Stikine we were lucky enough to have a higher-than-average voter turnout — in fact, eight or nine points higher than the average. I believe that's because when people see that they have a candidate that could represent them well and possibly make a change, they'll come out and participate and get involved. But when they get bombarded with messages from this government that says one thing and does another, then it's very hard to motivate people and engage them around the process.
[ Page 4049 ]
Again, I'm very, very concerned, as is the member for Richmond East, about the voter turnout in the younger age group. It does not bode well for the future. You know those are the people that are moving into being part of the contributing part of society even more so as they move up into the older-age demographics after 24 years old. If they're not participating now, then it does not bode well for the future.
What will encourage them to participate more is more truthful and honest debates, and that requires revelation of details, revelation of intent, revelation that the HST was going to be implemented before the election as part of the policy platform of this government so that we could have had an honest debate.
I'm very concerned about that cynicism and the low voter turnout that we see. I believe it was 58 percent, or perhaps even less, in the province in the last provincial election — even under 50 percent in some of the urban ridings. We're talking about only one of every two people voting. Part of that is due to the cynicism and what people feel is a lack of credibility, and that's because of things like how the HST was not talked about before the election and then was implemented just six weeks after the election.
People feel that…. It's not just me saying this. I mean, we've heard of surveys — whether it's 82 percent or 89 percent, it's a phenomenal number — of people opposed to HST in the province. What they feel is that this government has no mandate at all to implement this new tax. They wonder what happened. What happened between May 12, when they believed that this was not on the government's agenda, to then just six weeks later and to now? What we're faced with is the implementation of this tax.
That's why so many people are upset. They don't believe that the government has a mandate to do this. There's been lots of talk on the other side about the different groups that are in favour of the HST. It's hard to understand some of that list, because we have people, grassroots organizations, who've spoken out publicly against the HST. I'd like to list some of those here.
The Council of Tourism Associations CEO is a person who knows tourism intimately in the province and knows what it means to this province, knows how important that sector is. They've spoken out against the HST.
The Surrey Board of Trade. There's something — the Surrey Board of Trade — a board of trade speaking out against the HST.
Up in northern B.C., where I come from, the Canadian Home Builders Association of Northern B.C. has spoken out against the HST. So we have homebuilders. We have people affiliated with trade. We have tourism. The B.C. Technology Industry Association has spoken out publicly against the HST — technology now. The list goes on.
Don Monsour, chair of the Victoria branch for the B.C. restaurant and food association — someone who knows that sector very, very well — an expert in the field, has spoken out against the HST. Mark van Schellwitz, a regional vice-president for the Canadian Restaurant and Foodservices Association, has spoken out against the HST.
Food industry, tourism industry, technology, trade, tourism associations, homebuilders — these are the wide variety, the broad spectrum of people who have spoken out against the HST. The Fellowship of Christian Camps has spoken out against the HST.
A little closer to home for some of the members who spend time in Victoria, the owner of Spinnakers gastro brewpub, Paul Hadfield, has spoken out against the HST. Martin Claremont, the owner of Russ Hay's, the Bicycle Shop, here in Victoria, has spoken out against the HST, and I'll talk about the impact of the HST on bicycles a little further on in my comments.
Philip Nyren, owner of Philip Nyren Menswear and Womenswear in Victoria, has spoken out against the HST. Some of the members here might have frequented that store. For that store, the impacts of the HST, obviously, are not welcome, because the owner of that retail outlet is speaking out against the HST.
Big White Ski Resort's vice-president, Michael Ballingal. The ski resort has spoken out against the HST. So it's not just the members on this side.
What the members on this side are doing is representing the vast majority of people in B.C., the over 80 percent, who have said: "No, do not implement this HST. We're not in favour of it." We're speaking out to represent the majority of the people of this province against what this government is doing with no mandate — implementing the HST against the will of the vast majority of the people that live here.
Again, people who've spoken out against the HST…. Just last week, I believe it was, we had a representation of people who travelled to Victoria from up in the Interior, from 100 Mile House and Williams Lake. We met them — we being opposition MLAs — on the steps of the Legislature. They had a petition with more than 3,000 signatures opposing the HST. They made several eloquent speeches on the steps.
Gerd Braune was one of the speakers. He's a senior, and here's what he said. I know that through parliamentary or legislative procedures we're not supposed to name directly other members, so I'll abbreviate his comments and just refer to the actual constituency.
"We want our MLA from Cariboo-Chilcotin and the B.C. Liberal government to recognize that like the rest of British Columbia, the people of Williams Lake and 100 Mile House do not want the HST. If the member from Cariboo-Chilcotin is to represent her constituents and stand by the promises made during the election, she has no choice but to vote against the HST…. We travelled all the way to Victoria to make our voices heard."
All the way to Victoria at their own expense, their own cost. This was a senior saying these statements.
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Obviously, if he had been given the choice before the election, you know, he might have made a different choice during the election. Who knows how he voted? We all know that voting is a personal matter, and it's not anybody else's business. But he's pointing out that if people had listened, if this information had been made available before the election, things might have been different.
Again, why are these people speaking out? They are speaking out, and in that instance, that was a senior on a fixed income. People on fixed incomes are going to be some of the hardest hit by the HST, and I'll give an example why. People will pay 7 percent more now for restaurant meals and catered foods, so the ability to partake in those activities is decreased if budget is a concern. Budget is a concern to many people in this province — many people in my area especially.
People will now pay 7 percent more once this legislation is pushed through for many groceries such as snack foods and other prepared foods like salads, sandwiches, heated foots or beverages, like a muffin or a coffee. Sandwiches and salads — salads are something that we want to promote people to eat. Healthy living, active living, but they'll be taxed 7 percent more now under this legislation.
School supplies. We have a new school year coming up in the fall. Pretty soon now we'll be seeing all those ads that go in the newspapers and in our flyers that we get in our mailboxes about school supplies: "Come and buy the school supplies."
Well, I know people in my area who already have difficulty affording the school supplies that their children need to participate in the educational system, and now there will be 7 percent more on those school supplies. Now, how does that level the playing field in this province for everybody to get the education that they deserve, which is going to be the foundation for the future of the people of this province?
Services. Services such as membership fees for clubs and gyms. Again, we're supposed to be encouraging people to be active. We know that in the long term that will decrease health care costs to an overburdened health care system. What are we going to do under this legislation? What does this government want to do? Increase by 7 percent membership fees for clubs and gyms.
D. Donaldson: Yes, as a colleague of mine says: "Punish people for going and trying to be active."
Professional services of architects and accountants. Haircuts, services at beauty salons. Veterinary care. It's a very important aspect of the rural economy, veterinary care, whether it's agriculture-related or pet-related, but agriculture-related especially in my area. Again, 7 percent more for veterinary care, when farmers are having a hard enough time as it is trying to make a living.
Live theatre. We can assume that if the prices go up by 7 percent for live theatre, then some people will decide not to go. Fewer people in the audience, fewer revenues generated, less grants for these kinds of organizations under this government's policies. That means less theatre, less jobs for people in the theatre.
Services such as repairs to home appliances, such as refrigerators.
Deputy Speaker: Thank you, Member.
I recognize the member for Peace River North.
P. Pimm: Thank you, hon. Speaker, for allowing me to take my place and speak to Bill 9, Consumption Tax Rebate and Transition Act.
Okay, so why HST, and why HST now? Although the idea of harmonized sales tax has been around for many years, it's only been this last year that the federal government actually made it flexible enough and attractive enough for our Finance Minister to do the right thing and implement HST. B.C. can set its own tax rate, which is going to be the lowest in the country. B.C. can tailor its own specific needs with point-of-sale rebates.
Ontario's going to implement their HST on July 1, 2010, and once that happens, that means that all provinces Ontario and east will have a value-added tax of some description, so the writing is pretty much on the wall. The rest of Canada is going to follow suit, and probably sooner than later.
And of course, the $1.6 billion transfer of funds from the federal government — I think we would be silly to pass that up as well.
Let's have a look at where HST has been implemented at this point in time: Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick, Quebec. British Columbia will join them on July 1 as well, and I'm very proud to say that our rate of 12 percent will be the lowest in the country.
The other thing that we must know is that more than 130 countries, including 29 of the 30 OECD countries, have adopted similar taxes. B.C.'s move to implement an HST will bring us into line with what's viewed as the most efficient form of sales taxation in the world.
How does PST work presently? Let's talk about that a little bit. Currently PST is applied at every step in the creation of a product. Multiple PST charges are embedded in the price you pay at the store. Even though you don't see it, you're paying for it.
Let's look at a simple made-in-B.C. product like a chair. Let's just walk you through the process of that. Under the current system, taxes are paid at every step in the production and passed on to consumers.
When the logger cuts a tree down in the bush, he pays tax on his chainsaw at the present time. B.C. tax is included in that. That's all part of his rate. The trucker that
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is hauling the logs from the forest into the communities, he's paying tax. He's paying tax on his truck. He's paying tax on his tires. Taxes all the way along.
Once it gets to the mill, the mill has got saw blades. Everything that the mill buys — tax is paid on that as well. Then, of course, we've got to transfer it back to the retailers. Those people have the same trucks that transport stuff back.
Then when it gets to the retail outlet, there's your chair, sitting there prime and pretty, and you pay another 7 percent on top of it there. So HST definitely is a good way to go. It's going to get rid of all the embedded tax that we see at the present time.
Under HST, let's talk about that same chair. Now that same logger cuts down his tree. He gets reimbursed for HST on his chainsaw, so his costs in the bush come down. The logger, his truck — he gets that 7 percent back on his truck. When he buys that truck, his $150,000 or $100,000 truck, he gets that $7,000 back, so now he can afford to pay for tires, which he doesn't have to pay HST on now.
When you get into that store, you pay HST on the final product, and that HST is exactly the same as the 5 percent and 7 percent that you pay on it now. There's absolutely no change, except that the embedded part comes out.
What is going to be the result of HST? Well, the result is going to be that there are going to be lower prices. We must still remember that PST is charged multiple times during production — costs that will be passed onto consumers. HST is going to eliminate $2 billion worth of embedded PST. That's how much PST is embedded. That's how many times you pay PST on your product.
These savings will be passed on to consumers. A report from the TD Bank suggests that in the first year of business, businesses will pass on more than 80 percent of the savings to consumers. Studies of HST in eastern Canada have confirmed that its introduction resulted in lower prices for consumers.
The HST makes sectors such as manufacturers or exporters more competitive both nationally and internationally. Dr. Jack Mintz, a noted economist and tax policy expert from the University of Calgary, notes:
"By 2020 the combined effect of federal and provincial corporate tax cuts and sales tax harmonization is expected to increase the province’s capital stock by more than $14.4 billion and will add 141,000 new jobs. Sales tax harmonization alone will account for an increase of $11½ billion in capital investment and a net increase of 113,000 jobs by the end of the coming decade."
HST exceptions are tailored for B.C. Let's talk a little bit about that. Gasoline, ethanol, diesel, biodiesel when used in motor vehicles, as well as locomotive fuel used for trains, marine diesel used for boats, and aviation fuel and jet fuel used for aircraft. Residential electricity, home heating energy, books, children's-sized clothing and footwear, children's car seats, car booster seats, diapers, feminine hygiene products. These are all tailored for B.C. consumers.
You know, there are other things that won't change at all. Basic groceries won't change. Residential rent, pre-owned homes. Pre-owned homes won't change — 80 percent of the sales. Prescription drugs and health, medical and dental services won't change. Child care, music lessons, legal aid services, most goods and services provided by charities — for example, Meals on Wheels for our seniors.
Most purchases are still going to stay the same as well. What you have to realize is the vast majority of retail items will see no tax change with HST. Items that you pay PST and GST on today stay exactly the same; 7 percent PST and 5 percent GST equals 12 percent HST. That means new cars, new trucks, new boats, new recreational vehicles, furniture, electronics, kitchenware, toiletries, hardware and tools, adult clothing, pet foods — no changes whatsoever.
Major employers agree that HST is going to mean more jobs for British Columbians. The following groups have said that this is going to be good for British Columbia, going to be good for our economy: the Agriculture Council, the Business Council of B.C., B.C. Chamber of Commerce, B.C. Lumber Trade Council, Canada West Foundation, Conference Board of Canada, Chartered Accountants of British Columbia, Canadian Manufacturers and Exporters, Certified General Accountants, Mining Association of British Columbia, Retail Council of Canada, B.C. Trucking Association, B.C. Road Builders and Heavy Construction Association, Coast Forest Products Association, New Car Dealers, B.C. Construction Association, B.C. Pulp and Paper Steering Committee, Truck Loggers Association, the motion picture industry, Greater Vancouver Gateway Council, Railway Association of Canada, Independent Contractors and Businesses Association of B.C., Canadian Association of Petroleum Producers, Association of Mineral Exploration B.C., New Media B.C. I could go on and on and on.
"We think it's going to be very good for the provincial economy over the long term" — Jock Finlayson of B.C. Business Council.
"Harmonization of B.C.'s sales tax with federal GST is one of the most important policy directions we can put in place today to position us in a strong recovery at the end of our current economic difficulties" — John Winter, B.C. Chamber of Commerce.
"The time savings of collecting just one tax versus two is really going to make life easier" — Max Logan, Retail Council of Canada.
"This initiative is the biggest thing that can be done to boost our B.C. economy" — Craig Williams, vice-president B.C. division of Canadian Manufacturers and Exporters.
It's not just the major industry associations that are saying stuff like that:
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"As a small to mid-sized business owner and farmer, I believe the move to an HST makes good economic sense, and it'll be good for British Columbians. Sure, no one likes taxes, but HST makes a lot more sense than the PST it replaces. As a business owner with operations inside both B.C. and Ontario, I support the HST as being a long-term positive for our company and for our employees."
That's John Schroeder, president of Valley Brook International Ventures corporation.
Most leading economists endorse the HST as well. Dr. Jack Mintz, department of economics, University of Calgary; Kevin Milligan, UBC department of economics; Robert McFarlane, CFO of TELUS; Kenneth McKenzie, Canada West Foundation; Ben Dachis and Alexandre Laurin, C.D. Howe Institute; David Baxter, Urban Futures; and a TD Bank economic report.
All of these folks can't be wrong. There has to be some of them that are right, and I think the majority of them are.
What are the long-term benefits of HST? First off, let's be very clear. This is the right step to take for B.C.'s economy. What's it going to do? It's going to make a more competitive business climate, reduce administrative and compliance costs, attract new investment, increase productivity, and create jobs and long-term economic growth — 113,000 new jobs, according to Jack Mintz's report.
The HST builds on significant tax relief, which this government has been putting in place since 2001. The B.C. Liberal government has been working hard to build a more nationally and internationally competitive business environment since it was first elected in 2001. Throughout the 1990s punitive personal and business tax policies drove people, companies and investments out of British Columbia. This government has been working every day to fix that, starting with significant personal and business tax cuts.
Our tax cuts have directly stimulated our economy by bringing investors back to B.C., and the HST is the next step in building a stronger B.C. for the future. Combined with more than 120 tax cuts since 2001, the proposed HST means British Columbians will continue to pay among the lowest taxes in Canada.
So what have we done? Well, B.C. lowered its small business tax rate from 4.5 percent to 2.5 percent in 2008. By April 1, 2012, the tax rate will be cut again to zero, the lowest level in Canada.
B.C. raised the small business corporate income tax threshold from the current $400,000 to $500,000 — the highest in Canada. They did that on January 1, saving small business a total of $20 million a year so they could continue to invest in our province's economy.
In 2001 small business was leaving British Columbia almost daily and setting up in Alberta, and I know that. In my community especially, they were going across to Alberta faster than you could count them. Today they're starting to move back due to the fact that we're now competitive with Alberta's rates, and we'll have a zero small business tax by 2011.
What does that mean for small business? Well, it very simply means that there'll be more money in their pockets to continue to invest and supply jobs for British Columbians.
We also reduced the tax burden on corporations. We had the same kind of general results from those reductions. B.C. lowered the corporate income tax from 16.5 percent in 2001 to 11 percent in 2008, and it'll be 10 percent by 2011, which will be the lowest in Canada.
Since 2001, B.C. has eliminated the general corporation capital tax and reduced the corporate income tax rate by one-third, giving B.C. one of the most competitive tax regimes in the country. Opposition members totally disagree with these tax cuts and voted against each and every one of them.
Combined with the more than 120 tax cuts since 2001, the proposed HST means that British Columbians will continue to pay lower taxes. For most taxpayers, B.C. personal income taxes have been reduced by 37 percent or more since 2001. An additional 325,000 low-income British Columbians now pay no provincial income tax whatsoever.
Let's talk a little bit more about some of these reduced taxes. It's a point that I like to expand and dwell on a little bit. Firstly, it's very interesting to note that the income taxes paid by the average British Columbian were substantially higher in 2001 than they are today. Imagine that, with all the inflation. The opposition keeps telling us that every year expenses go up, and inflation goes up. But our taxes have gone down.
These tax savings range from $168 for that individual who made $10,000 per year to $8,187 for the person who made $150,000 in 2001. Every tax bracket was 35 percent higher than Alberta in 2001. Now we're the lowest in Canada in 2010 for any individual making $118,000 or less.
So take an individual at $20,000 in 2001 — paid $1,008. In 2010, pays $91. If you paid $40,000 in 2001…. A $40,000 income earner paid $3,041 in 2001; in 2010 he pays $1,450, a savings of $1,591. Nobody talks about those nice savings that we get. A little increase in HST and the world's going to fall apart.
Let's continue on with this. For that $80,000 income earner, he paid $8,895 in 2001; in 2010, $4,741, a savings of $4,154. I think that's a record that I'd like to stand behind.
I've been talking a little bit about provincial tax. That's just the savings on the income tax side. Let's talk about the whole works now. Provincial income tax, the property tax, the sales tax, fuel tax, carbon tax, health care premiums, payroll tax for the provinces that have eliminated that…. In 2001, for a couple that had $30,000
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worth of income, that couple paid over $5,100 in tax. In 2010 that couple pays $2,700. That's a pretty good record to stand behind.
Going on to the individual that paid $80,000 in income. In 2001 he paid nearly $26,000; in 2010 he pays under $20,000 of total taxes. That's 6,000 additional dollars in your pocket. Hopefully we can pay a little bit of the HST out of that money.
Let's talk about some benefits for families and seniors. By July 2011 the Low Income Climate Action Tax Credit will increase to $115 per adult and $34.50 per child — for all individuals up to $30,722 and for families earning up to $35,800. And we've increased the basic personal tax credit to $11,000, and that alone will put $80 more into your pocket for each person in this province.
Lower-income British Columbians will unquestionably come out ahead once HST is implemented in the province. So how is HST going to benefit low-income families and seniors? Firstly, there's a $230 tax credit for each individual that makes less than $20,000 per year. HST tax credits are going to be paid quarterly with a GST cheque to more than 1.1 million British Columbians. That's 25 percent of our British Columbian population.
There's going to be a $230 tax credit per family member for families with incomes up to $25,000 a year. This means $920 for a family of four — for that single mother with three children. When combined with the recently introduced climate action credit, low-income British Columbians will be eligible for up to $340 a year in provincial credits in addition to the existing GST credit that they get. Unquestionably, low-income British Columbians will benefit from HST.
Other benefits that families and seniors get. Let's keep in mind that for every person making less than $22,000 per year, you've got a 100 percent MSP subsidy. And it's an 80 percent subsidy for those from $22,000 to $24,000, a 60 percent subsidy for those from $24,000 to $26,000, 40 from $26,000 to $28,000, and a 20 percent subsidy for those from $28,000 to $30,000.
Since PharmaCare was introduced by this government, low-income families earning $14,000 or less per year pay absolutely nothing for their prescription drugs or MSP. Any person who's born before 1939 and earns less than $33,000 per year pays no deductible for PharmaCare. Let's take a single mother with one child, earning $28,000 per year and $2,000 annual drug costs. She pays 29 percent less now than she did in 2001.
The other thing I want to talk about a little bit is the e-mail that circulates around. It's been circulating around the province, and it's really quite incredible.
The opponents are saying that a couple that earns 41,000 after-tax dollars is going to pay an additional $2,100 after HST is implemented. These claims are completely incorrect. They're designed to scare seniors and the average families.
Let's talk about this viral e-mail a little bit. To claim that it's $2,100, you would need to spend an additional $30,000 on currently PST-exempt items to spend an additional $2,100. The e-mail claims that you'll pay more for insurance, home insurance, home heating, gasoline, electricity and more. The reality is that HST won't change the price of those items at all. They're either exempt, rebated or currently subject to PST and GST.
Many of the items listed in this e-mail, as well…. I mean, they're grossly overpriced. I looked up some of the actual prices. The e-mail says you're going to pay $4,000 for golf fees. Where I come from, you don't pay $4,000 for golf fees. In fact, even down here at Langley Golf Centre, it's only $1,350 for a couple. So I think this e-mail definitely has to be discredited, because it's got a lot of misinformation in it.
One of the things that I actually did was develop a little budget spreadsheet that shows how HST is going to affect people in my constituency and across the province. I was pretty interested to see the results as they started to show up.
For a low-income earner with lower expenses — so this is somebody that makes $20,000 or $25,000 a year — they're actually going to see a savings of $486 a year after the rebates are all put in place. For that moderate income with moderate expenses, they're going to see a slight increase, probably somewhere around $150 to $200 a year.
I did myself. I thought I'd use my own self as a demonstration. I make the same kind of money as you folks do in this building. I'd say we're into some of the higher paid people in the province, and I couldn't find anywhere where I could spend $2,100.
Even with all my expenses…. I don't live high on the hog, but I certainly am not afraid to spend a few dollars. I have golf memberships. I have curling memberships. I have…. You know, I don't deprive myself of anything. HST is going to cost me about $800 a year. That's all my restaurant fees. That's everything. You know what? With the $6,000 that I've saved from my 2001 income taxes, I can afford that.
You know what? There's one other thing I'd like to do. I'd like to send out a challenge to the opposition members to take my little HST budget challenge. If I can find one of them that can come up to the same amount that they say is in that e-mail, of $2100, I'd be more than happy to take them all out for dinner and look after that for them.
Let's clear up a few more myths. How much more is it going to cost to heat your home? Well, it's not going to cost you nothing to heat your home. How much for prescriptions? It's going to cost nothing for prescriptions. How much for gasoline in your vehicle? Nothing extra due to HST. Home heating and electricity, oil, natural gas, propane, wood and wood pellets — HST
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won't increase the cost of heating or power in your house, not one penny.
But one thing the HST does do is it cuts costs to some major employers. What do those employers do for us? Those employers create jobs. The construction industry is going to save $880 million. What's that going to do? That's going to give us more jobs for British Columbians. Manufacturing — save another $140 million. What's that going to do? More jobs for British Columbians. Forestry sector. Imagine this: more jobs for British Columbians. Mining and oil and gas. Another $80 million they're going to save — more jobs. In compliance costs — another $150 million.
I can tell you that my former bookkeeper…. She's so happy HST is going to come in. She was jumping for joy. She can't wait until July 1.
One of the common complaints that we hear about HST is that the benefits…. It's going to be beneficial for big business — and that the average taxpayer will have to pick up all the savings of big business. You know what? The more important part of that statement is that the employees of the businesses are also true beneficiaries. When companies gain competitive advantages, they can grow and expand and hire more people and give more long-term certainty to their employees.
More benefits for small businesses include: HST lowers the cost of doing business, streamlines administration, increases tax rebates, increases opportunity to invest and expand. In fact, going back to the Mintz report, HST means an $11.5 billion increase in capital to the province of British Columbia and a net increase of 113,000 new jobs.
I just want to put out one small example. I'm going to go back to that logger — the logging guy that goes out after July 1. He's going to buy some new equipment for his company. Say he buys a pickup truck and a trailer worth $100,000. Today he would pay 5 percent GST, 7 percent PST. He'd get his 5 percent GST back when he does his taxes up, but $7,000 is gone. It's gone to the B.C. government. After July 1 he gets that $12,000 back as a lump sum under the HST. That's definitely going to benefit our small loggers and help them out into the future years.
Let's talk a little bit about the restaurant business. I know I don't have much time left, but we'll touch on the restaurant industry as well. So HST cuts expenses for restaurants. You know, the restaurant industry has come out that they're in opposition to this bill, and I think they'll be in opposition for a while. In time I think their fears are going to not be quite as bad as they think they're going to be.
So costs are going to be reduced on everything from equipment to decorations because of the embedded PST. Once that's eliminated, the cost of those goods is going to come down. That's a proven fact. Restaurants are going to derive the same benefits of the HST as any other business. They're going to have lower costs, easier administration on their tax remittances, lower costs on equipment such as dishwashers, dishware, utensils, etc. And most of the products they pay….
Today, again, restaurants pay 5 percent. They're going to have the same rebates as other small businesses as well. So they're going to get that full 12 percent rebate back on all the office equipment they buy, everything.
Another one that's big to the restaurant industry…. The restaurant industry — they do a lot of renovations, whether it's a small business or some of the larger ones.
Deputy Speaker: Thank you, Member.
N. Macdonald: I rise to speak against Bill 9, the so-called Consumption Tax Rebate and Transition Act. Of course, it's almost like it's ashamed to be called the HST act. This government has skated around this topic and tried to avoid the topic, because they know it's unpopular.
The previous speaker, the member for Peace River North, quoted a series of people. What's kind of interesting is he didn't quote one person from Peace River North. Not one person from Peace River North could he provide a quote from in support of this transfer of $1.9 billion of taxation onto the backs of middle- and low-income individuals — not one quotation.
Just like many of the B.C. Liberal MLAs that are going to stand up and speak, I think they're going to be pretty hard-pressed to get that one quote. What we know from Ipsos-Reid…. If you go back to the middle of the summer when this was first announced, a solid 2 percent of British Columbians strongly supported the HST initiative. In December they did another poll — hadn't shifted.
If there is one person that that member can find in Peace River North that supports this, I'll be surprised. I can tell you, coming from a border region, that there is incredible sensitivity even around the PST. When you expand the things that are going to be covered with the HST, I honestly cannot imagine that the member for Peace River North could find one person that supports it other than himself.
Let's be clear. That support is based entirely on what the Premier tells him to support — nothing else. He'll do whatever they say, but what he should be listening to are the people that he supposedly came here to represent. That is going to be the focus for the comments that I have in the first opportunity that I have to speak about the HST.
I'm going to talk about three things in particular. I'm going to talk about democracy. I am going to talk about fairness, social equity, justice. And I'm going to talk about the way that money should be spent to look after
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services and to look after the land in a way that protects what, collectively, we are supposed to be responsible for here in this House.
Let's talk about democracy first. There is the principle of coming to this place with a mandate, coming with the backing of the wider population. There is something about going in front of the people of the province, putting forward in an honest way what you plan to do and then coming into this Legislature to enact it. So you come in here with a mandate.
What is so clear, and where this government is so weak, is that on a piece of taxation that is a massive shift and will impact individual after individual, they come to this House not only without a mandate but with a mandate to do the exact opposite of what they plan to do. Each and every B.C. Liberal campaigned on a series of promises. Prominent amongst those was a promise not to include the HST.
The previous speaker from Stikine talked about a point that we should all be concerned about here as parliamentarians. We come to this place as ordinary individuals, and we are treated with tremendous respect in this House, not because of who we are but because of what we represent.
What we represent is a democratic process that has served British Columbians and Canadians extremely well. Of all people, the people that come in here should be the most respectful of the honour that they get from that process. Instead, what we have is a constant degradation of the trust that should be there with the population.
Let's look at what this government has done. It goes back a number of elections. It goes back to 2001. It goes back to B.C. Rail — clear promises not to do something. Instead, you go ahead and do it, and it's still a mess. All these years later B.C. Rail is still a mess. It's still before the courts. It still has been a massive giveaway of public resources.
You have a pattern of deception around what the B.C. Liberals were going to do with health care this election and all of the elections before. Around education — clear promises made and broken.
Now you have the HST. There is not one member in this House that can make a good argument about why the people of British Columbia should not be upset with each and every one of them for what they've done here.
Now, the Minister of Finance tried to dance around the commitment that was made, but it was a clear commitment. It wasn't a comment. It was something where a question was asked directly of the B.C. Liberals during an election and where they were very clear in a written response.
The critic for Finance went through some of the timeline. But I'll remind people that the harmonized sales tax is a concept that's been around for a long time. It has been out there and talked about for a long time. The Progress Board, the Premier's own Progress Board, in December of 2009 talked about the HST. But in their report to the Premier, they said there's a political price that you'd pay if you tried to introduce it. Well, that's a warning that I suspect the Premier took to heart — a political price if you try to put this in front of the people.
In 2010, in January, the federal government really started to push the harmonized sales tax. They talked to other governments about it in that same month. Ontario started to consider it. They announced their intention to go ahead with the harmonized sales tax. So pretty clearly you have Finance ministers talking about this possibility and talking about the incentives that the federal government was going to provide, because let's be clear. That's a pretty big part of what's going on here: financial incentives from the federal government.
Yet we are asked to believe that there was no thought by the B.C. Liberals to move forward on the HST. It's not credible. That assertion isn't credible here. It's not credible in British Columbia. People don't believe that. People don't believe that this was not considered.
You have the phrase that will be repeated again and again, the idea that it's not, whatever it means, on the radar of this government. But then you come back, and weeks after being elected — and it's literally weeks after being elected — this government, the B.C. Liberals, say that it's the most important thing that they can do. And they make the announcement bravely, in the middle of the summer, I think just before a long weekend, that this is the most important thing that they're going to do, and they launch into it immediately. They launch into trying to sell this.
Well, as I can say, the initial sales results were pretty poor — 2 percent of people thought it was a good idea. So when you're talking about a mandate, if you are going to go and fight an election to not do something like this, then you better have some sort of explanation for why you do it after. One of the explanations might be that, well, you have changed your mind, and you're able to convince a wide part of the population that now it's a good idea. But that hasn't happened.
The latest polling that we've seen is that it still is incredibly unpopular. The people who support it — and this isn't just strongly support it; the people who think, "Okay, maybe there's an argument there" — are one in ten. One in ten. That's an unbelievably low number. With all the resources that this government has…. And let's be clear, this is where they invest. They invest a lot in their propaganda services.
So all the services that this government has, all the powers of the provincial government to convince people that this is the right way to go, all those months later when the legislation's coming in here, it comes with the support of approximately one in ten people who think, "Hey, maybe it's not a bad idea" and about 2 percent who
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think it's a great idea. That's the 2 percent that stand to save that 2 billion. The vast majority of people will be paying more.
So democracy. There have been many, many members here who lament the cynicism that the public has, but this sort of an initiative invites that cynicism. Elected on a written commitment to not implement the HST, the B.C. Liberals are intending to do the exact opposite.
Well, very often the Minister of Finance, when he's asked questions in the House on this topic, will answer with a question. He'll say: "Well, what's the NDP going to do?" What's the NDP going to do? I'll tell you.
There are three things that we're going to do. The B.C. NDP are going to vote against the HST. That's one. The B.C. NDP and NDP MLAs are going to represent the wishes of the people that they've been sent here to serve. That's No. 2. And the B.C. NDP MLAs are going to respect the promises that they made during their election campaign — those three things. There's not one B.C. Liberal that can stand up and say that they're going to do the same thing — not one.
N. Macdonald: The Minister of Health is somebody who ran on a promise against the HST. He said, as part of the platform of the party that he was running for, that he would not support the HST. Yet here he is somehow saying that it wasn't the policy of the party that he ran for. Here's the Minister of Health, who said that he was going to protect health care, and yet cut after cut comes. Here's the Minister of Health who said that he was going to be voting against the HST, and yet he won't.
Hon. K. Falcon: If it's so terrible, will you repeal it?
N. Macdonald: I'll tell you what we will do. We will keep our promise, and we will vote against the HST. Well, the Minister of Health wants to participate in this debate. It's different than other debates he's been in here.
Usually you've got your earplugs in. Now you want to participate — do you? Your ears better all of a sudden?
Deputy Speaker: Minister. Minister.
Member, can I remind you that we don't need to have any personal remarks.
And can I remind all members that every member has the chance to participate in this debate and doesn't need to be arguing across the floor. Thank you.
Please proceed, Member.
N. Macdonald: Coming here with a mandate, a written commitment to not go forward with the HST…. The government will. What is said before an election to this government means nothing compared to what they do here. There's something that's fundamentally wrong with that.
Most British Columbians have concluded that there's something very wrong with that. They've signed petitions. They've organized themselves to make sure that it doesn't take place. The way to stop it is to vote here against the HST, to keep their word. The B.C. Liberals are able to do that, but instead they ignore what the wider public believes. They ignore the promises they made before the election, and they go ahead as if they have all the solutions, when the evidence is consistently to the contrary.
They have failed fundamentally in running the economy. They have failed fundamentally in the fiscal management of this province. They have failed fundamentally to provide the investments in our forests that need to be there. They have failed consistently in providing any sense of social justice, any sort of social justice at all. Let's talk about equity. Let's talk about the principles of fairness.
N. Macdonald: Well, the minister of gambling has something to say. The minister of gambling wants to enter the debate. He'll have his opportunity. He can explain how…. Let's talk about democratic processes. A government that was elected promising not to expand gambling has it expanded — how much? — 200 percent, 300 percent? Where does it stop?
The minister of gambling is quite happy about that. Previously he was the minister of destroying the forest industry. Previous to that, and still, he's the minister of homelessness. The minister of homelessness.
You've got lots to say, Minister, but you'll have your opportunity to say it, and the Minister of Health will have his opportunity too. He can certainly get up and have a go.
Let's talk about the principle of equity, the principle of justice.
Deputy Speaker: Member, one moment.
Deputy Speaker: Order, order.
N. Macdonald: Thank you. Well, the minister wants to defend his record as the Minister of Forests — 30,000 jobs lost, 71 mills shut.
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Give him a hand. Has there been a Minister of Forests that has failed so fundamentally as this minister? I'd be surprised. I can't find an example of any.
Let's get to fairness. We'll talk about….
N. Macdonald: Well, we can move to that. Do you want to talk about forestry? Let's talk about it for a second. First off, let's move to forestry. Let's talk about the argument that this government makes about why $2 billion should be shifted from industry onto the backs of middle- and low-income families. Let's talk about that.
Of course, we didn't talk about it before the election. This government wouldn't mention it during the election, but they're certainly willing to heckle about it right now. Let's see how clever the B.C. Liberal policies have been so far, because they have tried this before. Let's be clear. They have tried this before.
In 2003 this is a government that got rid of environmental constraints on public lands. This is a government that got rid of the concept that had been there for 40, 50 years about mills operating in a community and being able to take the logs from the surrounding area and actually process wood in B.C.
There's a concept, rather than sending the logs off somewhere. This is a government that got rid of that and provided PST breaks already on machinery. The minister danced around that one, but the fact is that since 2003 the PST has not been paid by forest companies on their machinery.
Now, did this government study whether that led to jobs? They didn't. Have they ever even thought about asking themselves whether all those millions and millions that were given to industry actually led to anything that's of public benefit? They didn't. They didn't even look at it. I mean, not coincidentally, those are the same companies that are major donors to the B.C. Liberals, so I guess you don't have to study it. They just come in and tell the Premier what they want, and they get it.
What about school tax? The school tax has been removed from forestry. Was there any study to see whether that led to any public good by this government? No. It was just taken on faith.
The private land giveaway that this minister is responsible for, Jordan River, a decision that the Auditor General said was not in the public interest. This minister, this government claimed, "Oh, we'll get jobs out of it," just like they do with the HST. It's going to lead to jobs. They don't study it. Where does it lead to jobs?
Where does the central argument that the minister makes about the HST, about this legislation, actually flow and follow through to some logical conclusion? It never does. They don't study it. It's all taken completely on faith. What you get is a pretty consistent failure, and for the minister of gambling, that failure has been as complete on that file as it has been with the homelessness file.
In terms of equity, let's come back to that, because the principles of fairness should be important. Certainly, to the people in the area that I represent, there are strong feelings on fairness and how we treat our seniors, how we treat children, how we treat people who fall into difficult times.
I can tell you that as you go door to door during elections, as you meet people, the strong belief in fairness and in justice comes through again and again. It is a core belief. The expectation is that what we do here in the Legislature is going to reflect that core belief — a core belief in democracy, which this government has undermined, and a core belief in equity.
The HST is going to shift $1.9 billion a year from industry to low- and middle-income individuals. It is only the latest in a series of B.C. Liberal tax measures where you have seen measure after measure that have driven taxes and fees onto low- and middle-income British Columbians.
The income tax changes that the member for Peace River North identified. He then goes on to use, as an example of the benefits of those income taxes cuts, somebody who has a salary of $100,000. What percentage of British Columbians have a salary of $100,000? Very few. There are massive savings in income tax for those individuals, but what we have seen is inevitably, with measures like this and the tax policy of the B.C. Liberals in general, that you drive people into poverty.
For the past six years we've had the highest rate of child poverty in British Columbia, which means there are families in poverty. There is absolutely no effort from this government, not even the simplest measure of making sure that the lowest-paid workers are paid something approaching a livable wage.
We now have the lowest minimum wage. It hasn't changed in ten years, since the Liberals have come in — eight years, nine years. So the equity issue is one that needs to be considered.
The member for Peace River North talked also about the corporate tax and how low that was. Well, here's something people need to understand as they look at that issue. People know that taxes have to be paid. People know that you cannot go to business and industry and tax them unfairly. But I ask people about just judging the equitability of this fact, which is there in the Minister of Finance's own documents.
Corporations — their corporate tax will contribute less to the money that we have here to spend on health care and education than tuition fees from post-secondary students. It is a minuscule amount. It is an
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unfair amount that these corporations are asked to pay. Yet that is what you continuously have from the B.C. Liberals. You continuously have an injustice in terms of the fairness of the taxation system here.
The third thing I want to talk about is just the protection that should come with a fair tax system. This government brags about all the tax cuts, but they're in deficit. They don't collect enough to cover the costs that we have. They cut programs that make no sense. They don't invest in things that you should invest in. Part of the deficit is that fiscal deficit that we see here, but there are other deficits that are out there. There are human deficits.
On the public lands there is a massive deficit there. There have not been investments on the public lands, so that you allow it to decay. The logic isn't there. It's like not putting oil in your car. You save a bit of money, but you devalue the product that you have here. Our greatest publicly owned asset is the public lands, and there are vast areas that are falling into disease that we don't deal with, where silviculture is not taking place.
Does the HST provide any more money? Middle- and low-income families are going to pay $2 billion more almost. Are they actually going to get anything for it? They're not going to get an improvement in health. There's not more money for that. The minister said that there's actually less money with the HST in the short term.
Is there more money for education? No. Is there more money to do some work, some of the hundreds of millions of dollars of work that needs to be done on the public land? There's not. So there is nothing with this initiative that does the work that needs to be done to protect the land that's commonly held or some of the institutions that have served British Columbians for such a long time.
The other point that the government makes and the Minister of Finance makes is that this is not an unusual tax. A value-added tax is not unusual. It is a tax that exists in many countries, I'm sure, from Albania to Zimbabwe. But to make that argument without a context for the other services and taxes that surround tax policies in other countries like Finland and others is kind of ludicrous.
In Finland, if there's a dependence on the value-added tax, then there are programs that disburse the wealth so that you have people not falling into poverty and you have needs met and you have a justice and a fairness. None of that exists here in British Columbia.
I think the fundamental argument…. I'll have opportunity later to talk more about this, but I want to give an opportunity to just many of the people that have written to me on this. I haven't had one person write or e-mail or cc me on a letter to the Premier, saying that this is a good idea. You know, I don't get them. The fact that Peace River North couldn't quote one person from his constituency that's in favour of it, I think, reflects where the public is on this.
I would have thought that one of the fundamental duties that you have here as a legislator is to represent the area that you come from. Yet the B.C. Liberals seem to somehow think that they're above that — that whatever the boss says, goes. "Our duty is just to follow in step."
But the real boss should be the people who put you there, the people of the province who voted for you and who trusted you to represent them. I don't think there's a B.C. Liberal here that can make the argument that they would be doing this and voting for this legislation. The numbers just aren't there. There have been months to change the opinions of British Columbians, but you haven't done it.
I'll read from just a couple of the e-mails that have come to me. One of the first that came to me is from a representative of one of the ski hills that I represent in the area. Now, all of the ski hills…. Whether it's Revelstoke Mountain Resort, Kicking Horse Resort, Panorama or the Resorts of the Canadian Rockies in Kimberley — each and every one of these is against the HST.
What they point out and have pointed out to the Premier repeatedly in person…. They say that they compete with Alberta. Anybody who comes into the area — about 80 percent of them come from either Alberta or the prairie provinces — is now going to be asked to pay all sorts of extra money, 7 percent, on lift tickets, on lessons.
There are about 20 things that they list. They're very clear in terms of not only how concerned they are with the initiative; also, they're very clear in just how betrayed they feel about the initiative going ahead.
[L. Reid in the chair.]
They talk about the idea that a government would run with a promise of not introducing the HST and then turn around and do something different. I'll just read a few of the things that people from my area are saying.
This is from the owner of Heidi's Restaurant in Cranbrook, just south of Kimberley. This is her comment on the HST, and she should know. She knows her business. She says: "It's going to have a dramatic effect. The most significant immediate effects will be fewer people dining and people getting laid off. It's definitely going to be affecting the hospitality-tourism industry the most." That's what she says.
Now, she's not only the owner and operator of Heidi's Restaurant in Cranbrook; she's a director with B.C. Restaurant and Foodservices. She knows. She was promised one thing; she got something else. That's wrong. She thinks this is a bad idea. She's along with the 82 percent of British Columbians who think it's a bad idea.
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But this government and each and every B.C. Liberal MLA, supposedly, is going to stand up and ignore that, just as they ignore people in their own communities.
This is from the Gasthaus Restaurant in Kimberley. "The economy's not good enough right now that we can swallow the HST. You have to eat, but you don't have to eat in restaurants." So when you own a business where every day you have to have people come through the door, there's a pretty clear concern about the impact. It couldn't be clearer than that.
It was sent to the Premier. It was sent to me. Yet with the Premier, it falls on deaf ears.
This is from Robert Davidson. He's a chef and the proprietor, the owner, of the Village Bistro in Kimberley. He writes:
"As a small restaurateur in Kimberley, I am very concerned with the proposed HST. It's hard enough to get a portion of the limited spending the economic downturn has caused the tourism industry, let alone add an additional 7 percent on a food bill. I'm writing to let you know of my strong disapproval of this move. Our proximity to Alberta will now give that sector even more reason to stay in their own province to spend their tourist dollars. I'm very disappointed."
J. Rustad: It's my pleasure to have an opportunity to stand today to address this bill before the House.
As the Forests critic just was finished talking, I thought I'd make a couple of quick little comments before I go into it. I just listened to a half an hour from the Forests critic on this bill. The one thing that was missing from that… He's talked about forestry twice. In all of that pontification, there wasn't one idea about how to actually support the forest industry. I find that very interesting, coming from the critic.
I want to start by saying, "A battle looms over the tax," from an article here…. I'll give you the title of the article in a second." There will be a bitter fight on the floor. The opposition leader indicated his party will make a full-scale attack on the measures and endeavour to amend many of these provisions."
That is a headline from Friday, April 9, 1948, at the introduction of the PST into B.C. The opposition party…. It's the same opposition party that it is today, only just under a different name. I find it very interesting that "protest wires from all over the province, which have slowed down in the last two weeks, were renewed again today after the publication of the bill's details."
Interesting how history can repeat itself. I find it also very interesting that the NDP, taking basically…. You could just read 1948 articles and basically have the same read from what is happening today.
One thing they did say, and one thing the NDP should maybe consider, is perhaps learning a lesson from the PST when it was first introduced in the House. The interesting thing about that is despite the fact that they made it their platform, they pushed hard. They tried to galvanize the province. It was 25 years before the NDP had an opportunity to actually be in government.
One thing I find very interesting, because I am speaking about history and opportunities that we have in history to learn, is that after the PST came in, in the mid-'50s the PST was increased from 3 percent to 5 percent. It was one of the tools that was used in terms of generating some revenue in the province that helped to fuel one of the greatest expansions, economic expansions, that this province had seen.
That was a big piece of B.C.'s history. I can tell you that today the HST will do the exact same thing for our province. It is time that we take our province into the 21st century and introduce a taxation system that will help to spark that next generation of economic expansion in the province.
I would just venture — and history will play out as we go — that likely history will repeat, with the HST providing the kind of growth supporting families, helping to build rural B.C. and be a springboard for B.C.'s economy out of this great recession.
It's been said that the HST is the single greatest thing we can do to strengthen our economy. I know that's been said in the House before, but it helps to build the context, given that history of what happened in the 1950s through to the 1970s, and what we can be looking forward to again here today.
HST will make B.C. one of the most competitive jurisdictions, not only in Canada but in the industrial world. This means that B.C. will be an attractive place for investment and creating long-term, stable employment.
The member for Columbia River–Revelstoke said: "How is this going to create jobs?" Look, when you have something that is going to mean a 40 percent reduction to the effective tax on new business investment, that is phenomenal in terms of attracting dollars and creating those employment opportunities.
Why is that important? I can tell you. Rural B.C.? They need the employment. They need the investment. We have an enormous opportunity to see infrastructure built, to see employment built, to see opportunities built.
It's clear once again, as I have said in this House before, that the opposition do not understand rural B.C. They do not understand what drives the economy, what builds families, what supports communities. If they did, they would take a look at this tax. They would compare it to the PST, and they would understand that the embedded tax of the PST hurts people in rural B.C., whereas HST will help to drive those opportunities, particularly in forestry.
The other thing I find interesting is that more than 130 countries, including 29 out of 30 of the OECD countries, have adopted a similar type of value-added tax. I find it interesting when the majority of the world — the vast majority of the world, the vast majority of the economic
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leaders in the world in terms of economic development — have all said that the value-added tax is the way to go.
It's time to take B.C. out of the archaic past, of the archaic provincial sales tax, and move into that new tax regime. By lowering the tax on new investment, HST will encourage that capital investment that we need.
I find it interesting as well that the article B.C.'s Harmonized Sales Tax: A Giant Leap in the Province's Competitiveness, by Jack Mintz, notes that the sales tax harmonization, independent of the tax cuts that we are bringing in, the corporate tax cuts, will account for $11.5 billion in increased capital investment and a net increase of 113,000 jobs in the coming decade. That's huge. That is absolutely huge when you look at what we're doing.
Just in general thought of that, there's an article here. I don't often read the Tyee, but there's a very interesting little article from the Tyee on August 24, 2009, by Calyn Shaw that notes:
"What seems to be lost in the HST argument, however, is that in the long run the switch to a value-added tax instead of a retail tax is hugely beneficial to consumers." Interesting. "The current PST is an embedded cost in most of the goods and services we purchase. Just because we don't see PST on the receipt doesn't mean we didn't pay it. Businesses paid the PST and passed it right on to consumers.
"What is worse is that the current PST is a cascading tax, which means that often the embedded PST was paid multiple times. Depending on the supply chain of the goods, B.C. consumers are often paying double or even triple PST on an embedded cost without even knowing it. By implementing the HST system, the government is cutting the cost of doing business. It will reduce the marginal effective tax rate by 40 percent."
There are very good reasons for why we should be looking at the HST and why we should be repealing the PST, which is what this tax does. I want to just go into those very good reasons a little bit in terms of my riding.
The Forests critic railed on about this bill, but here's the catch. Many, many speeches in this House over the last five years that I've had the privilege of being here have been talking about how we need to be able to support the forest industry, how we need to be able to find a way to be able to support those jobs in rural B.C. We need to be able to support the economies in rural B.C.
It's interesting. The opposition Forests critic, the member for Columbia River–Revelstoke, said they're opposed to the fact that we actually tried to give them some tax relief just recently. He stood up and just said that. It's amazing. Clearly, they don't understand how the economy works and how things happen in rural B.C. It's very clear.
HST will reduce the costs on the forest industry by $140 million. That's huge. That is so large that what it will do is reduce the overall cost by about $2 a metre or about $7 a thousand board feet. That's an enormous competitive advantage, particularly when you look at the challenge we've come through in this economic cycle.
Just some quotes around forestry that I'd like to add. The Truck Loggers Association, which supports HST, said it expected that with the introduction of the HST, the forest industry as a whole will save about $140 million, including $40 million for forestry and logging. That's logging and forest nurseries and the gathering of forest products.
For example, under HST, a tax saving for a single pickup truck costing $60,000 with special heavy-duty tires, which also cost about $1,200, would save about $4,200. Provincewide there are between 10,000 and 12,000 trucks. That's a big savings for the little guy and for the person who is trying to make a living out in the forests.
A logging truck suitable for on-highway use has tires that cost about $400 each. That's a tax savings of $28 a tire. Whereas for a logging truck that's only suitable for working in the bush — for the off-road — the cost for those tires is about $2,000 each, and a tax saving of about $140. That's big.
The reason why I point those particular things out is that it was just the other week that I had a couple of fellows come into my office. They wanted to meet. They wanted to know: "What does the HST do? What does it mean?"
These two individuals were truck loggers. They had their own trucks, and they were working in the forest industry. They're happy to see that this particular year we've had a whole bunch more work happening in the forest industry, and they had a busy season, but they wanted to know: what does HST mean?
I tell you, Madam Speaker, after talking through how to have those savings in HST, how they were going to be able to have those flow-through tax credits in forestry, they said: "Wow, we had no idea what that actually meant for us as individuals and what that will mean for the forestry industry." Clearly, the forestry critic also has no idea of just what HST will do and what it means.
Rick Jefferey, the president and CEO of the Coast Forest Products Association said: "Those regions that have introduced a value-added tax like HST see increases in productivity and investment, and for our industry" — forest industry — "that means levelling the playing field with our competitors and providing us with an opportunity to invest in and maintain wealth-creating, high-paying jobs."
That's significant. Hank Ketcham, the president and CEO of West Fraser Timber, says: "We see this not as a short-term fix, but rather as a long-term economic policy initiated of great importance. Many business sectors, large and small, have called for it. Reducing costs and eliminating inefficiencies help to save existing jobs and create new jobs in B.C."
John Allan, the CEO of the Council of Forest Industries — and this is a quote: "Right now everyone
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is losing money" — this was a quote from a few months ago; with the prices of lumber today, some of the mills are actually back in the black, which is great news to see — "burning money, so in the short term it will help preserve cash, help preserve employment." That's what John Allan said.
It was interesting. The speaker from Columbia River–Revelstoke said that the dollars and savings of the forest industry — they're not putting it back in.
I can tell you, Madam Speaker, when I talked to Apollo Forest Products, when I talked to Canfor, when I talked to L&M Lumber, when I talked to many of the mills in my riding, they said that those dollars that they were able to get back through the softwood lumber agreement deal have been a lifesaver for them. They've been able to have some cash on hand that they had to burn through to be able to keep their operations open, to keep people employed.
That's critical. Of course, the member opposite seems to think that that didn't actually happen. But that was very, very critical for helping us get through this period. Now HST will give them a huge opportunity to be able to move forward and be more competitive and actually generate some investment.
This is another quote from John Allan: "In the long term it will promote investment and will, overall, ensure that we're competitive in the world market."
So harmonizing the tax, which is allowed under the softwood lumber agreement, which is very, very important…. The softwood lumber agreement, of course, that the opposition have said they would tear up, threatening thousands of jobs in this province…. But under the softwood lumber agreement, it's allowed, because it applies to everyone. "It's a huge deal for forestry" — another quote from John Allan.
Quote again: "It's welcome relief when you're going to get, by government numbers, $140 million in savings per year, and anything that can relieve industry of some of the cost is going to help maintain employment and, in the longer term, pave the way for economic recovery."
Those are huge things for rural B.C. and for what we need to do across the province. But also, those are quotes that come from the industry leaders around the province.
I also have a very interesting comment that came from Spectrum, from the owner, Crawford Young. He's an individual, an entrepreneur who has gone out, and he's created a little silviculture company. It's not so little. He does an awful lot of work now in the province. Silviculture, of course, is critical in terms of what we're going to be doing in the province and how we're going to be able to build the future of the forest industry in this province.
His quote is that going to HST is going to save his company $50,000. That's big. That is very, very big for that company. What that means is that he is now going to be able to be more competitive with companies that are from out of province. It also means that he is going to be able to support employment in terms of the jobs that he has to carry through winter.
Obviously, without the tree planting in winter, he is involved in many other activities that do carry on in winter. But this type of a savings will really help his company — not only just going through the economic challenge we have, but going forward. It will really make a difference.
That's what HST does. It supports forestry. It supports jobs. It supports rural B.C. Like I say, it's a shame that the opposition…. They just don't get it. They don't understand it.
It's not just in forestry where we're going to see savings. In my riding I've got two active mines. There's an opportunity for three new mines and possibly even more in the coming years. HST will save the mining industry….
Let me actually get the exact quote, Madam Speaker. I do want to read this into the record, because it is very important for the industry. "It will save the mining sector, along with oil and gas, about $80 million a year."
You think: "Why is that important? I mean, the mining industry can make money, but what does that mean about jobs?" For the startup of a new mine such as the one that's proposed down in Williams Lake, or Mount Milligan, which is proposed just at the edge of my riding, that means tens of millions of dollars of savings in construction. For Endako, which is undergoing a $500 million expansion, it means a million dollars in savings in the expansion, and millions of dollars in savings over its operation.
Why is that important? When you can have those kinds of savings, when you don't have to put those dollars out, it reduces your overall operating costs, and that means for molybdenum…. Like Endako Mines, when molybdenum is trading at $18 and your costs are around $12, it means that you can bring those costs that you have down. That means that if molybdenum prices drop, the mine is still able to keep going, and it can still be able to support jobs. That's how you take a competitive advantage for our province. That's what you need to do.
When I went around and knocked on doors throughout my riding during the last election campaign…. The member opposite keeps saying: "You know, you don't have a mandate." Clearly, during the election I was asked three main things, and the first one was: "Find a way to support the forest industry. We need help."
Giving help from the government to the forest industry means that you have to take tax dollars and apply them in a way that's going to be able to help support workers, help support jobs and help the industry in general. That's not an easy thing to do. I mean, short of cutting cheques to people, which perhaps is what the
[ Page 4062 ]
opposition seems to think we should do, you have to find a way to be able to fundamentally reduce the costs and improve the structure within the industry. HST does that.
Virtually most of the doors that I knocked on, that was the number one issue. HST delivered on that election issue, and that's what people had asked for in my riding.
Another thing people asked for. They said: "We need to see the economy diversified. We need to see that moving a little bit farther away from forestry, keeping forestry strong but being able to create new jobs."
Bringing in new mines, bringing in opportunity in bioenergy, bringing in opportunity in independent power — all of those things create jobs and diversity within rural B.C. Once again, HST helps support that. It helps to bring that in, makes it more competitive. Once again, delivering on HST is delivering on what people asked for in the election campaign in my riding.
One of the other things they said is: "We need to create new jobs. We need to see employment opportunities in rural B.C. It's not enough just to talk about it. We need to see actual action on the ground."
HST, as I read before, will create 113,000 jobs, 114,000 jobs in this province. Those jobs are going to be very specific. There's going to be a ton of those in resource sectors, in forestry and mining, in agriculture and other opportunities. That's all in rural B.C. So once again, delivering on HST says to the people in my riding who asked for it that this is the best way that we can go forward to bring those supports, to deliver what people asked in the campaign and to improve the economy and the future of our province.
I realize there's a lot of opposition. A lot of people think we shouldn't be bringing in HST. But it's interesting, because if you put in the question, "Would you like a tax like the PST introduced today?" — a tax that's embedded, a tax that is hidden, a tax that is cascading — I can tell you this.
I put that question up on the Internet and on Facebook just to see what a reaction would be, just to generate some conversation and stuff. I had about 35 responses to it. One person was opposed to HST. One — that's it.
I have more than 1,600 people on Facebook, and I welcome people from all political stripes to join me on Facebook, because I'd like to see the conversation. I like to generate that. I like to see how those comments come in.
When you look at it in the terms of PST…. By the way, the opposition took great pleasure in 1993 in raising it from 6 percent to 7 percent, and they seemed to want to keep it around because they liked that embedded tax that's a job-killer, and that's fine. They like that sort of idea.
They don't like new thinking. They don't like to venture out into the idea of something that could create a difference for the province. They're not comfortable with change, and that's fine. But when you put those two side by side and you ask the appropriate question around it, the numbers on support and the numbers in there are very, very different.
You know, the HST debate has gone on now for a day here in the House, but it really has been going on in discussion for a long period of time. I just want to talk for a moment about some of the misinformation that is going out there, because it truly is a shame. If you want to sit down and debate HST, debate facts. Debate what's really happening. Don't throw rhetoric and other things out there.
I'll just give you an example. Back in September the Leader of the Opposition stood up in this chamber and said that the HST was going to cost people $1,000 a month — $1,000 a month. What kind of responsible way is that? I mean, clearly, that is just fearmongering. You know, maybe that's a misspoken comment in this chamber, but I can tell you this: there was never a retraction. There was never a correction.
What kind of leadership is that, when you have somebody that'll come out and grossly misrepresent those kinds of facts — $1,000 a month? Eighty percent of the goods in this province are not going to change price, so that would be $1,000 a month on — what — 20 percent of expenditures? Think about how much a person would have to spend. And calling that the average person? Absolutely ludicrous, even when you look at other quotes like $2,100 per year that it would cost in terms of that. The numbers don't hold out for that.
Other bits of misinformation…. They stand in the House and say it's going to cost low-income…. And low-income people are going to be worse off because of this. We have brought in a $230 rebate on this for people of low income. Clearly, that will more than offset any potential cost for low income, but once again it's an example of misinformation, an example of people that are not being honest. They're not being direct. They're not debating facts. They simply want to fearmonger and try to prey off of people's fears.
You know, there's an old saying….
Point of Order
N. Macdonald: The member said that members on this side were not being honest. I'm sure it was just a mistake, but maybe the member could refrain his language.
Deputy Speaker: I would caution all members in the House in terms of the parliamentary practice.
J. Rustad: Thank you, Madam Speaker. "Being somewhat disingenuous" may be another way of putting that.
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However, when you look at those kinds of comments….
J. Rustad: Leadership is about being able to stand up. It's about being able to take positions. It's about being able to bring forward facts, being open to straightforward, honest debate and making sure that when you bring stuff forward, you bring it forward based on sheer fact with backing. That's what we have done here with HST. It's not necessarily what you're hearing from the other side.
We have a month to debate this, and I look forward to hearing the opposition as they go through this, because they are going to have plenty of opportunity to actually be able to bring some facts in and to be able to bring some opportunity for that discussion. But one fact that you will never hear from them, and you will never hear them utter this once…. You'll never hear how they are actually going to support industry like the forest industry. You won't hear that. You won't hear that as part of this debate.
There's one other thing you won't hear. You'll never hear them commit to actually getting rid of HST. You won't hear that. They will rail on, and they will go on, and they won't commit to getting rid of it, and I'll tell you why: because they know it's good for industry. They know it's good for jobs. They know it's good for building the future of B.C. They also know it's good for building rural B.C., but they're not willing to stand up and say it.
You know, it's a shame, because it does take strong political leadership to do things that are tough, to be able to make the right choices. In 1991, when GST was brought in, it was an opportunity at that time to make the right choice — perhaps not in 1991, because of the economic situation, but certainly by 1993 it was an opportunity to do the right thing for industry, and do you know what they did? They raised PST from 6 percent to 7 percent and wouldn't even consider the idea of doing something that would support industry.
In other words, they increased a tax that is crippling for jobs and that is embedded and hurtful for consumers, and that was the way they decided to do things in the future.
J. Rustad: You know, I seem to have hit on a raw nerve, because the opposition hates to talk about the 1990s. They do. When you bring up the 1990s, they say wrong decade. They say wrong millennium. I can tell you why. There's a reason why they do that about the 1990s. The reason why is because they know that the NDP is wrong and that they're in the wrong decade and the wrong millennium.
They don't understand how to build an economy in this province. It's very clear. You know what? I stand on my record. I stand on what I'm doing and what I'm saying here in the province. I'm being straightforward. I'm bringing examples. I'm showing how I stood up and supported what I did during the election campaign, what I talked about in the election campaign. I'm doing this. Yet, they refuse to stand up and say anything that would be supportive for industry, that would be supportive for jobs.
J. Rustad: Obviously, in what I'm saying and the rhetoric that I'm hearing back from the opposition in terms of heckling, I'm striking on a nerve. They know they have lots of rhetoric, but they're hollow.
There are several other things that I want to point to — the examples in terms of what HST is doing and in terms of what we've done as a party. In 2001 we brought in a 25 percent tax decrease for personal income taxes — 25 percent. They railed on and on and on about how it was going to hurt the province, how it was going to hurt us being able to provide service, how it was not going to be able to create jobs. It was just the wrong thing to do. Clearly, they were wrong.
The 25 percent tax decrease — not only did it jump our revenues, not only did it spark economic activity in this province, but it created a place that people wanted to move back to. Clearly, they're wrong, and that's okay. But you know what?
Over the nine years since 2001, we've introduced more than 120 different tax-cutting measures. It's amazing. An individual earning $40,000 a year pays $1,000 less. And $70,000 — they're paying $2,300 a year less. It's 37 percent less for the people in this province. And 325,000 people no longer pay taxes. These are low-income people that they actually taxed. They thought that was okay to tax low-income people and waste our dollars on things like fast ferries. But I do digress.
The tax measures that we implemented in this province have driven hundreds of thousands of new jobs. We've gone from last place, the worst in the country, to one of the best economies in the country. We have enormous opportunities to build our future. HST is yet another measure that is going to help to build that.
You wait and see. In the coming years, the growth that we're going to see is going to be phenomenal. I tell you, this is going to be a northern decade. We are going to see phenomenal amounts of growth in jobs. We are going to see rural communities supported, and HST is going to play a huge part of that.
Despite all the railings and opposition from the NDP, even some of the communities they represent, such as
[ Page 4064 ]
Smithers and Terrace and Kitimat and Prince Rupert, are going to see the benefits of what we're doing, of the tax measures we're putting in place, of how we're trying to support those jobs in rural B.C.
I'm proud to be able to stand up and say that we are doing the right things, we are taking the right steps, we are supporting rural B.C., and we are supporting jobs. We know that the key in this province is to be able to have strong families, strong communities, and to be able to look forward to a bright future.
B. Routley: Well, the members in this House want to hear some facts. Here are the bare facts. The bare facts are that this government plans to transfer $1.9 billion. They're going to take it from consumers in British Columbia, and they're going to give it to the biggest corporations and the banks and all their friends.
That's their plan, and they would have you believe it's almost free. If you listen to them: "Oh, well, it's not going to cost anybody any money." No, no, it's not going to cost anybody any money, just $1.9 billion this year and the next and the year after that.
This government plans to pick the pockets of the poor and the disabled — the people living on fixed incomes, seniors living on meagre pensions, folks on welfare or unemployment payments, people injured and ill and living on bare subsistence earnings or benefits — and they plan for this tax to be forced on even the lowest-paid minimum-wage earners in the country.
This tax is going to be cutting into and eroding the B.C. minimum-wage earners' already skimpy pay. It's worthwhile noting that while this government wants to keep up with the Joneses, so to speak, on the HST, they claim that they have this desperate need. They don't want to be like Alberta. They don't want to be like Washington. They don't want to be like a lot of other provinces. They want to be like Ontario and they want to introduce the HST, this harmful tax, and yet they have ignored the very people, the minimum-wage earners that need a raise.
They have no plans to help B.C.'s minimum-wage earners to earn something even close to the same minimum wage rates as Ontario. Shameful. They want to be like Ontario but not when it comes to the lowest-paid workers in the province. It's absolutely shameful. They refuse to give our province's lowest-paid workers the time of day on a wage increase. They've been stuck at $8 since 2001.
No increases for more than nine years, and they brag about all the corporate tax cuts that they've been giving. Oh, they've been piling up the corporate tax cuts and they're proud of it, but nothing for the lowest-paid workers in the province. It's totally unacceptable.
Now this government plans to tax the kids when they save up to go buy their bikes. This HST — someone called it a harmful stupid tax, and I think they're right. It's a tax that's going to impact all British Columbians and it is clearly regressive in that it will take a bigger bite out of the earnings of the poor and middle-income earners and a much lower percentage of the highest-income earners in B.C. In other words, a much lower percentage of the richest or wealthiest people in B.C.'s earnings will be impacted by this tax, and that's what this government is proud of.
So they're going to…. The working class in B.C. will become poorer, and the rich and multinational corporations and even the banks are going to make out like bandits, running off with the lion's share of the cash from this transfer of tax onto B.C. consumers. That's what this government is all about as a result of this government's actions, and the rest of us in B.C. are going to pay and pay and pay some more while they're gifting more and more to the big corporations.
This HST is based on a foundation of half truths and outright jiggery-pokery. The centrepiece of this harm tax is that at the same time as they're picking the pockets of B.C. consumers, they are giving their billions in tax breaks to their corporate and banking pals.
The major groups that will benefit the most from this harmful tax are the same backroom influence peddlers that have donated millions to this Liberal party, and now it's payback time.
In spite of the fact that the majority of British Columbians, more than 80 percent, do not support this tax, this government is planning to stick it to us anyway. They're going to stick it to ordinary British Columbians, to working-class British Columbians, to those who can least afford it. They're going to stick it to them with their HST.
This government has now taken to flying low. Apparently they're now flying below the radar, so to speak — below the radar. This government said before the election that the HST was not on their radar. Oh my, my.
That statement was made even after they had received reports from the Premier's handpicked Progress Board back in December of 2008. Interesting — isn't it? — that the Premier's Progress Board had recommended the HST to this government way back in December 2008, and that was five months before the election. Clearly, the HST was on the radar of a very influential handpicked group, who told this government they wanted the HST before the election. However, now they're asking us to believe that they didn't have the tax on their radar — simply not believable.
Now they say that it's the greatest thing since sliced bread. So why didn't they come clean with the people of British Columbia? Why didn't they just run on the HST? Why didn't they?
Well, we know why they didn't. They knew full well that the HST was not going to be supported by the people of B.C. That's why they waited. They knew that
[ Page 4065 ]
they were going to announce the transfer of tax from the corporations, and we're supposed to accept that it's all going to trickle down to the good folks of British Columbia. What a joke. They know that the people of B.C. would not be there for that.
During the election this government was asked by the tourism industry about the HST, and they told the tourism industry and the Home Builders Association that the HST was not a consideration. Essentially, they told them the reasons why it wasn't a good idea. Now people are feeling tricked by this government. The people of B.C. see yet another complete reversal of what this government says before the election and what it says after the election.
This harmful tax is exactly what they said they wouldn't do before the election, and we have seen this movie before. With B.C. Rail in 2001 they said, "We will not sell B.C. Rail," and then they did. Then they told health care workers, "We won't rip up contracts," and they did.
Now it's the HST deception. Instead of being transparent with the electorate, this government told the public that it was not on their radar — not on their radar — and now they say it's such a wonderful thing. The people of B.C. just don't get it, they claim. So 80 percent are all wrong. It's going to be so good for them, and it's going to be so wonderful, we can hardly believe it. They just try to have us believe this lie.
I apologize, hon. Speaker.
Deputy Speaker: Hon. Member, I would ask you to withdraw that last comment.
B. Routley: I withdraw that.
Deputy Speaker: And you do know that second reading allows for wide-ranging debate, but I would bring your thoughts back to the consideration of the bill.
B. Routley: Okay. Well, this bill, hon. Speaker, doesn't meet the interests of the majority of British Columbians. Here are just some of the reasons why, when you look at the details of this bill, they do not represent the interests.
For example, the B.C. Restaurant and Foodservices Association. During the 2009 election they sent a questionnaire to all the parties, and one of the questions was whether they would implement the HST. The NDP said that we would not, and while the B.C. Liberals responded with detailed reasoning on why they would not harmonize the PST with the GST, here are some of the excerpts. The HST "would extend the PST tax base to a broader range of goods and services that are presently exempt from provincial sales tax…. That is a major concern," they said. "The B.C. Liberals are also mindful that a harmonized GST would reduce the provincial…ability to unilaterally adjust sales tax rates."
Now with the introduction of this HST, this government is abandoning the rights of the government of the province of British Columbia to introduce taxation on our own. Now the federal government can just dial in whatever they want in terms of a tax. What this government has done is abandon our rights. Our autonomous rights to act in British Columbia have been abandoned by this government, and it is quite scandalous.
They say: "In short, the harmonized GST is not something that is contemplated by the B.C. Liberal platform…." Yet now we have learned that in December of 2008 the Premier's Progress Board recommended to the government the HST.
In January of '09 the federal government announced new flexibility for provinces who adopt the HST, including limited point-of-sale exemptions for provinces that adopt the GST. January 2009, Ontario Premier Dalton McGuinty says that his government is considering adopting the HST. March 2009, in its annual budget Ontario announces it will adopt the HST.
You know, we don't find any of these things in relation to this legislation. In fact, they don't even have the courage of their convictions to put HST anywhere in the legislation. Unbelievable.
[Mr. Speaker in the chair.]
During April 14 to May 12, which was the B.C. provincial election campaign, the B.C. Liberals made no mention of the HST to the public — no mention — except in response to a survey by the B.C. Restaurant and Foodservices Association, in which they suggested that they're not — they are not — contemplating adopting the new tax, because of its adverse effects.
June 23, the HST is announced by Gordon Campbell and Hansen, just six weeks after the election.
Point of Order
Hon. G. Abbott: Mr. Speaker, I might ask you to counsel the member on using the names of the members of this House in the House.
Mr. Speaker: Hon. Member, you're reminded not to use names.
B. Routley: Thank you, hon. Speaker.
Just six weeks after the election, this government signed a complex, many-page document. It was signed off with no debate, no consultation, no public mandate. In spite of being fresh out of a provincial election, they
[ Page 4066 ]
do a complete reversal of what they said during the election and sign on to an HST.
People tell me they feel deceived. In many letters and e-mails people are letting us know just how upset they are. I know the members on the other side of the House are hearing the same and seeing the same kinds of letters and e-mails. Yet the government side of the House stand up and vote for something they know their constituents don't want and that they didn't tell the people of B.C. during the election. That's what's going on.
Now we know that they've been told by government advisers that they would like them to implement the HST. Again, this bill has no reference to the HST, and that's just not right.
We know that a lot of their pals and supporters have been saying that they wanted the HST for years. It's not just the select group. We've heard from other players that they've been calling for it, and they're listing them all proudly now. Now they say the HST is the single most important thing they can do. Yet they will, with one hand, take from the consumers of B.C. with the HST, this regressive and harmful tax, and with the other hand they're going to give huge tax cuts, yet again, to the richest corporations and multinationals and the banks.
They'll continue their big tax cuts, but nothing for the lowest-paid workers in the province of British Columbia. Nothing for the lowest-paid. They're cutting programs. They're cutting programs for the poor. They're cutting programs that help the children of British Columbia, and they're so proud of their big tax cuts for their corporate pals. It is just scandalous and shameful.
This government thinks it's okay to just keep piling up their tax cuts for their corporate friends, and nothing is done to make even a dent in the problems that so many British Columbians face — people all over B.C. with crises in their budgets; all the non-profits writing, talking about their problems; kids with sports programs. And here they are handing off more corporate tax–gifting all wrapped up in the HST bow.
Take from the B.C. consumers, and give big bonus tax breaks to their corporate friends, all while cutting more and more services to the people of British Columbia. That's the plan, and it's a very sad plan and disgraceful plan seen by the….
The Liberal members tell us that it's all going to trickle down. It's all going to trickle down. We just have to trust that it'll trickle down. However, we have seen this before, and there's no trickling down. We're not going to win the race to the bottom with this government's approach to giving money away to big corporations. They're already running off. The forest industry is running off to the United States. They're running off, taking our logs to China.
They've got to be kidding that they think that giving more…. There's no evidence that all this gifting of corporations has done anything in terms of investment. In fact, investment is going the other way.
Mr. Speaker: Noting the hour, Member.
B. Routley: Well, I'll reserve my right to finish my time. The other side is so excited, maybe they'll give me my time back, hon. Speaker. But with that, noting the hour….
Mr. Speaker: Members.
B. Routley: Well, I don't know. We don't want to quit this quick — do we?
B. Routley: Oh, okay, we're going to go till six. Given the huge debt burden, we want to talk about the debt burden in the province of British Columbia, with continuing large numbers of unemployment, poverty and homelessness on the rise in British Columbia — a huge debt burden already on consumers and a ballooning B.C. government debt. What about the debt? Here they are giving truckloads of cash to the bank and their corporate friends.
B.C. Stats shows a 24 percent drop in the value of B.C. exports, a trend which the B.C. Liberals will use to justify deep cuts in social programs and the public sector jobs. Exports of forest products and coal and natural gas are down sharply, and we're losing thousands of jobs in British Columbia. This plan isn't going to work.
Noting the hour, I move adjournment of the debate and reserve my.….
B. Routley: Apparently, they're happy I'm reserving my place in the House when it resumes.
B. Routley moved adjournment of debate.
Committee of Supply (Section A), having reported resolution and progress, was granted leave to sit again.
Hon. G. Abbott moved adjournment of the House.
[ Page 4067 ]
Mr. Speaker: Hon. Members, have a good Easter, and I'm sure that on April 12 we'll come back at ten o'clock in the morning.
The House adjourned at 5:56 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF
TOURISM, CULTURE AND THE ARTS
The House in Committee of Supply (Section A); H. Bloy in the chair.
The committee met at 2:33 p.m.
On Vote 44: ministry operations, $113,617,000 (continued).
The Chair: I would like to remind all members that their questions should be directed towards Vote 44.
Hon. K. Krueger: I've introduced most of the people who are with me to the House, but right now we're joined by Andrew Little, the gentleman on my far right, who is the manager of intergovernmental relations, strategy and policy division, and by John Crooks, the provincial recreation officer, who is seated next to him. Thank you for joining us, gentlemen.
M. Sather: I want to ask the minister a couple of questions regarding Blue Mountain provincial forest in Maple Ridge. There has been a lot of controversy over trail use on Blue Mountain.
It's used extensively by mountain bikers but also more and more by folks with ATVs, which has led to some concerns from other user groups and citizens like the Blue Mountain conservation group. None of these trails have been approved, either when they were under the Ministry of Forests or now under this ministry. The Forest Practices Board has made a couple of reports saying that habitat is being damaged by the recreational use.
Two years ago the municipality asked for the trails to be closed until a study was done of wildlife, and a hydrological study. There are two species at risk there, tailed frogs and red-legged frogs.
I'm wondering if the minister is contemplating or would contemplate bringing in some form of management to regulations to deal with the situation on Blue Mountain in Maple Ridge.
Hon. K. Krueger: The Ministry of Forests had come to the point of a tentative recreation management plan. Our ministry has been considering that. It is not a designated area presently, but the ministry's intention is to work with the Ministry of Forests, the local government and local stakeholders to establish the area as a recreation site. I would very much welcome the member's written advice of all such concerns of his constituents, and we'll take those into account.
M. Sather: Just a two-part question then. If it's approved as a recreation site, does that mean the trails are given approval as they now stand? The other part is around First Nations who use that area, the Katzie First Nation, for ceremonial purposes. The recreational users — that is, the mountain bikers — have put up an awful lot of signs there that are kind of, I guess, in biker language, but they're quite offensive to the First Nations in their use of that land.
I'm wondering if the ministry is on top of that and can get a handle on making an equitable arrangement, a fair arrangement, between First Nations and the mountain bikers and ATV folks.
Hon. K. Krueger: If the ministry designates this area as a site, then a process would be launched with public input to examine the questions the member has posed, including which of the existing trails, if any, are appropriate and whether they are sustainable and environmentally appropriate. Those concerns that the First Nation has raised with the member, the ministry will certainly discuss with the First Nation. That is significant. Issues of signage will be dealt with.
D. Donaldson: I have a question that relates to this vote, Vote 44. It has implications throughout my region in the northwest of B.C. and elsewhere. However, it's quite specific. As a preamble I'd like to say that I would take a written answer to look at the time factor that it might take to answer. So a written answer would be fine.
I'm concerned about the implications of the decrease, the cut in budget, to the tourism development sector under this vote from over $18 million to $9 million — especially that this subvote provides for advancing tourism product and sector development.
I point out that the value — this is a sport fishing question — of sport fishing to the province is $1.4 billion according to the B.C. Wildlife Federation. We met with them earlier this week. The value of the freshwater fishery component of that — non-title freshwater fishery and recreational fishery again — is $479 million. It's worth millions to the people and the economy in my area.
The minister may be aware there's a pending Skeena quality water strategy decision. It has to do with an
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angling management plan. In layman's terms that means fishing regulations, sport fishing regulations particularly. The people in my area have undergone a consultation process that's well over a year old now. It wrapped up in November. They've been waiting in December, January and February. Now it's the end of March. They still haven't had the sport fishing regulations that are associated with this process posted on the website of the Ministry of Environment as promised.
However, the implications relate to this subvote and to tourism because many of the fishers who come to the area come from out of the region, and some — actually, many — come from out of the province. They require a year in advance oftentimes to do the booking. So with the delay in posting the regulations, it's having an impact on the small businesses, the tourism businesses, in my area — bed-and-breakfasts, hotels, motels, transportation.
My question regarding the subvote is…. I've seen letters addressed to the Ministry of Tourism, to the minister, so you know that people are asking for these regulations to be released quickly. If you could detail in a written response to me the efforts you've made within government to have them released as soon as possible…. They were promised back in December, and now it's four months later. They still haven't.
These new regulations that relate to a tourism sector — sport fishing, that is — are going to have implications. So anything you can detail in that answer around the mitigation measures that you'll be taking, through advancing tourism and product and sector development to the potential negative impacts of these regulations, would also be appreciated in that letter.
Hon. K. Krueger: I thank the member for his very specific and detailed question. We'll be happy to give him the written answer he's requested. I appreciate that we'll be able to save the remaining time in this debate for other questions. We'll certainly handle that one in writing, and we'll do it promptly.
S. Chandra Herbert: I, too, would like to thank the member for Stikine because that was a question that I also heard up in the Chilcotin, so I'll be interested in the answer as well.
Hon. K. Krueger: Carbon copy.
S. Chandra Herbert: Carbon copy. Excellent.
All right. Getting to the hotel room tax and implications of the elimination of the hotel room tax — also the additional hotel room tax, which I understand is in the bill that's coming to the House on the HST…. I guess I just wanted to see whether or not the minister could share with us, because the tourism industry has been asking me this for quite some time: what is going to replace the hotel room tax, and how are we going to fund the 2 percent for destination marketing organizations?
Hon. K. Krueger: In future we expect that the funding will be by an appropriation, as it is this year, in that the hotel room tax is being eliminated with the provincial sales tax, and the HST is taking their place.
The additional hotel room tax mechanism. The Minister of Finance wrote the destination marketing organizations some months ago, as I think the member knows, and gave them reassurance of continuance in spite of their five-year cycles coming up. In the budget, based on consultation with the tourism industry and municipalities, government has committed to continuing and enhancing the additional hotel room tax beyond July 2011. People like the AHRT approach, and we are continuing it.
S. Chandra Herbert: Will there be additional legislation required to fund the additional hotel room tax?
Hon. K. Krueger: No new legislation is required.
S. Chandra Herbert: I guess if the whole point of the HST is to have one harmonized tax, it would raise questions about an additional hotel room tax on the HST. That's a bit of a confusing thing, because you can't get rid of all, say you're only going to have one and then have two. I'm just wondering if the minister would think that was contrary or if that's the same as always.
Hon. K. Krueger: The AHRT is not a tax on the HST. Currently there's a 2 percent tax on the actual hotel revenues, and this is permissible in the arrangement with the federal government whereby we're going to implement HST.
S. Chandra Herbert: A question about the resort municipality, the tax that they get, the extra tax that they may be able to have. What's the plan for that specific tax?
Hon. K. Krueger: That is the purview of the Minister of Community and Rural Development, so I'd ask the member to put that question to him.
S. Chandra Herbert: I understand there was a Green Paper and some consultation with the industry. I think it was a very quick turnaround process to get to that meeting, and I haven't heard what has happened after the Green Paper was presented.
I'm just curious, given that it dealt with a number of issues and put out a range of possible solutions. The question that I've been asked by a number is: how do
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the minister and government plan to manage the flow of money so that destination marketing organizations aren't fighting against each other, so to speak, for market share? What's the plan for that?
Hon. K. Krueger: The member is correct. There was a consultation. There was a Green Paper, further consultation. Consensus was not achieved in the industry. We intend to continue funding destination marketing organizations the same way.
The thrust — and there is consensus around this — is to make sure there isn't duplication of effort or the use of those financial resources in ways that aren't efficient. We are striving — and when I say "we," I mean government and industry — to make sure that there is solid performance with those funds and that there is accountability for how they are spent.
We have been urging, for example, local destination marketing organizations not to send their people internationally to travel shows and so on, but to work with the regional organizations, and the regional organizations to work with us to make sure that any such trips are done in a way that benefits the whole industry in the province. One small community or even some of the larger communities going by themselves to London, England, we don't think, for example, is a productive way to go. Those are the initiatives that we'll be working on in the coming year.
S. Chandra Herbert: Would the minister also include, in his list of things he's concerned about, the use of the additional hotel room tax for capital infrastructure or capital projects?
Hon. K. Krueger: That is permissible if the DMO was set up that way in its five-year plan. The Ministry of Finance retains responsibility for those arrangements. The member might want to pursue it further in those estimates.
S. Chandra Herbert: Just so that I understand and the industry understands, based on partly what happened in the green paper and how there wasn't consensus and based on the minister's remarks, am I correct to assume that the current system that we have in the way that the funds are disbursed will continue as it's set up for this next year at a minimum?
Hon. K. Krueger: The answer is yes.
S. Chandra Herbert: All right. Moving on from the hotel room tax — a question. How many people currently within the ministry are getting severance pay?
Hon. K. Krueger: I wonder if the member could clarify his question.
S. Chandra Herbert: I understand that Tourism B.C. has been folded back into the ministry from its independent, industry-led status. I guess that my question is: how many people are getting severance pay that used to be, I guess, affiliated with Tourism B.C., and what's the total amount that it's costing the government?
Hon. K. Krueger: Some 145 offers were made to employees of the former Tourism B.C. Three of those employees declined the offer. They will not be drawing severance pay. There are four severance packages being paid, and those will be reported in the wind-up statements of Tourism B.C. — not people's names, but the cost. That's the process.
S. Chandra Herbert: If the minister can tell me when the wind-up statement for Tourism B.C. will be revealed. I know that somebody has got to pay for that, and it's coming out of the tourism budget. So that's why I ask.
Hon. K. Krueger: That's at the same time as the public accounts, so early summer.
S. Chandra Herbert: Will that be in a specific line item? I'm just concerned that it's going to be in a catch-all expenses or something like that. Will I be able to see, specifically, that that was the cost?
Hon. K. Krueger: It is a separate set of audited financial statements, and this will be a line item.
S. Chandra Herbert: I would press it to try and get the number now, but I know what'll happen, so I won't continue on that line of questioning, aside from saying that it was talked about — that it would be more efficient to do it this way, when in fact, based on what I've seen so far, it seems to be less efficient, given the stuff that's happened with "You gotta be here," as well as what we're seeing with the severance package. But I'll look for those numbers.
I know that in years past there was an annual survey done of about 700 respondents in the tourism industry. It was asked so that the industry could let Tourism B.C. know how effective it was in their eyes. It scored very well for years, and I understand that that survey — and correct me if I'm wrong — is not being done anymore.
I'm just curious. Under this new model, how will the ministry know if Tourism B.C. or the Tourism Ministry is being affected in the eyes of its stakeholders?
Hon. K. Krueger: Obviously, there's no point in doing a survey about an organization that no longer exists, but staff have been tasked with making recommendations as to the most effective way, in their judgment, to assess the effectiveness of our programs. A new survey
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is one possible way, and I would welcome the member's input on that, if he wants to write me about it.
S. Chandra Herbert: I know that Tourism B.C. used to do regular surveys of staff morale, consistently placing among the top companies to work for in B.C. And as, I guess, Tourism B.C. is not now in the ministry — or is now in the ministry — I'm wondering if that survey is continuing or what the most recent survey shows.
Hon. K. Krueger: There is a survey that is done of the staff every year, of all public servants for British Columbia. That'll be issued shortly, in the usual timing. It is, actually, a survey that is quite similar to the one Tourism B.C. was using for its employees. The ministry, historically, has done well according to that survey.
S. Chandra Herbert: Will it be broken out by ministry so that we'll be able to compare it, for example, to the Tourism B.C. survey?
Hon. K. Krueger: The answer is yes.
S. Chandra Herbert: Questions on the minister's council on tourism, the advisory body that was set up. How many meetings have there been? Is the chair getting a remuneration for his role? What were the selection criteria for those that are now on that board?
Hon. K. Krueger: The minister's council on tourism — the members were designated by appointment. The selection criteria included consideration of their skills and abilities, their reputation in the industry, their knowledge and experience, and the effort was made to have representation of the various regions of the province.
Expenses are covered to travel to meetings. The chair is entitled to claim an honorarium, but he has not done so. They've had four meetings thus far.
S. Chandra Herbert: A quick question. Are all of the Tourism B.C. offices — overseas or in North America, as the case may be, South America, whatever — still open, and where are they?
Hon. K. Krueger: The ministry has offices in London, England, and in Tokyo. We work through agreements with general sales agents in Germany, Taiwan, Australia and South Korea. All those offices have remained open. It's our intention to keep them open.
S. Chandra Herbert: The minister will know that I'm passionate about culture. I know the minister himself has spoken about the possibilities for cultural tourism. I've heard it all across the province — the great opportunities. I'm just wondering: how, specifically, is the ministry supporting the growth of cultural tourism, in particular with First Nations people?
Hon. K. Krueger: I'd just like to clarify with the critic whether I should free up the tourism staff other than with regard to cultural tourism.
S. Chandra Herbert: I'll just put three questions on the record for the staff, and then, of course, they're free to go. I realize that I'm running short on time and that there are other estimates waiting.
I understand a demographic survey was done of all the ticket buyers who came to the Olympics to better understand who they are, why they came and how to get them to come back. My question was: was that a global survey, or was it just for North American ticket buyers? What was the thinking behind those decisions, and what were the results?
The other question — this came to me through the member for Columbia River–Revelstoke, who represents the area, as well as the member for Nelson-Creston, who has concerns, as do successive mayors in the area. Their question is about the proposed Jumbo ski resort. Where is that at? Is that moving ahead, or is it not going to happen? What is the planning there?
The final question, which is an important one given that we're banking a lot on the idea of future tourism growth: what is the ministry doing to deal with the rise in oil prices and the spectre of peak oil, which could make it very difficult to travel internationally should those suggestions of what is going to happen to oil prices come about? Those are the three questions. I'll let the minister respond.
Hon. K. Krueger: I understood the member to say that in the interest of time, he'd be content with written answers to those questions. We'll certainly do that.
S. Chandra Herbert: I know, in particular, the Jumbo one is pressing in terms of time. But on the other two, if I could get an answer within two weeks, that would be great. Thank you to the Tourism staff for being here, and we'll move on to the cultural tourism portion.
Sorry, just one last question. I'm not sure if the Tourism staff have to be here for it, but it's related to the tourism development spending. Last year I believe it was around $18 million, and this year it's about $9 million.
I remember last year when I asked about that $9 million, which was supposed to be allocated for something to do with First Nations, with aboriginal folks…. I never saw an announcement and wasn't sure how that was spent. I'm wondering how it was spent as we're, of course, at March 31. If the minister can tell me how that $9 million was spent, as it's not being spent this year given the decline in that budget.
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Hon. K. Krueger: I missed the first part of what the member said, and I think it was that he had a fourth question that he'd like us to deal with. A written response is correct. I thought I would save him some time on the Jumbo question because we have been fulfilling our responsibilities with regard to consultation with the Ktunaxa First Nation.
They asked me to come and meet with them on that subject, and I did that. So we continue to work on that question.
S. Chandra Herbert: The first question was the question I was hoping actually to get an answer on here today. The others can be written answers — no problem.
It was just the question of tourism development '09-10. It was about $18.9 million, and then in 2010-2011, it's about $9.9 million. I was told $9 million that was in the budget last year was for an aboriginal initiative. Details weren't ready yet, and I haven't heard anything since. We're at budget end of year, so I don't know what that money was spent for in the end.
Hon. K. Krueger: That $9 million was set aside for a specific initiative that would involve First Nations, the arts and tourism. The initiative is no longer being pursued, the $9 million was not spent, and that budget — because it was for a specific purpose that didn't come to fruition — has not been continued into the 2010-11 year. This is a sensitive matter to First Nations, and it's not appropriate for me to discuss it any further.
S. Chandra Herbert: Thank you to the minister for letting me know that. I guess the assumption is that the money then goes back into general revenue or paying down debt or something like that? I see nodding from the other side. Okay.
Thank you to the Tourism folks who have been around for, I guess, two if not three days of questioning on the issue, because it is of such importance.
Hon. K. Krueger: I'd like to introduce two staff that the critic hasn't met yet, or perhaps he has — Jennifer Iredale, to my right, the director of heritage branch, and Andrea Henning, who is the executive director of cultural services and is sitting to my immediate right.
We're in the member's hands. We can focus on whatever he chooses.
S. Chandra Herbert: I was interested in the cultural tourism plan and the heritage tourism plan in particular — the two of them. I know that the minister earlier, in another day of this estimates process, mentioned First Nations folks — I think, if I correctly remember the name, it was the Aboriginal Tourism Association — and how he was working very closely with them.
I guess the question was: where are we at in the development of a cultural tourism plan, and in particular, how are we helping develop with this budget the tourism potential within First Nations communities?
Hon. K. Krueger: I'm going to kind of speed-read some things into the record for the member, and he can focus on any he wants to, as he has advised us that he's running short of time.
We do indeed have a really healthy relationship with the Aboriginal Tourism B.C. The CEO of ATBC is a Métis gentleman named Keith Henry. We allocated $550,000 to them for '09-10, and again for this budget year. We've been involved with them in the development of an aboriginal blueprint working towards an updated document.
We have what is called the experiences B.C. program, with a $50,000 allocation for heritage marketing, an allocation for cooperative programs and facilitation of strategic planning. We have ongoing promotions of aboriginal and cultural products and experiences through our marketing efforts, including the website, media relations, various publications, newsletter and direct marketing.
S. Chandra Herbert: I understand that there was a plan to grow the number of aboriginal-run tourism businesses in the province. I can't remember the exact figures, but it sounded like, I think, there were 60 or something like that, and they wanted to increase the number.
In the blueprint that the minister mentioned, the idea was, I think, that there was a down payment — not a down payment, because it was not a mortgage — a chunk of money that was put in there from the province and the federal government with the idea that there would be another infusion to help increase the number of aboriginal-run businesses and grow that sector.
I'm just curious how we're doing in that plan, and is there a plan to do that second infusion — or investment, I guess — to grow that sector?
Hon. K. Krueger: The member is correct that there are 60 businesses involved, and ATBC and the ministry are certainly interested in assisting more aboriginal organizations to be in a position of marketing their products and their experiences. We committed $5 million for a five-year plan to help ATBC, and we're just going into the fourth year of that.
Through aboriginal tourism development we provide support, not only as the liaison between ATBC and the ministry but also financial and management services for the implementation of the blueprint strategy.
We have a program to assist First Nations in developing resorts, and that is through helping them find financing.
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It doesn't involve grants from government, but it does involve a lot of advice and bringing them together with people who will assist them with their various needs in bringing on resorts. I'll leave it at that.
S. Chandra Herbert: I guess, as we're in year four, we're not sure after year five whether or not there will be that second investment. Or does the minister have any thoughts on that?
Hon. K. Krueger: That is the work on the blueprint strategy that I referred to in the earlier response. We're actually thrilled with Aboriginal Tourism B.C. We certainly want to see them continue in their work, so we're working on that question. We still have some time.
S. Chandra Herbert: Moving on to archaeology. I don't know that there have been a lot of questions on archaeology before in the estimates process, but there's always a first time or a second time.
I understand that the ministry has had a growing backlog of unreviewed reports from archaeological consultants sent to the archaeology branch for review. Compared to last year, how many reports are there currently in there for review?
Hon. K. Krueger: The ministry has made substantial progress in reducing the backlog, including automating a number of our processes. We'll write a note to the member and report more fully on that.
S. Chandra Herbert: I asked because I do have some concerns. I was given a letter from the archaeology branch which stated: "In order to address a growing backlog of unreviewed reports, the archaeology branch has decided to close the related permit file without reviewing the report." It goes on to say: "As more than two years have passed since the report was submitted, we do not anticipate that any further action will be required under this permit."
So the question I had is: is it going to be ministry practice from now on that they will not review reports — which I would say could place heritage and important archaeological sites at risk — and instead basically stamp the reports without reviewing them, with the possibility that at some time in the future they may come back to them?
Hon. K. Krueger: The ministry focuses on sites where there is activity rather than those where there isn't activity, which only makes sense, I'm sure, to everyone present — any new incoming reports of activity at sites. All sites are of interest, and certainly, our responsibilities are clear in our minds, but our energies are focused on those where there is activity.
S. Chandra Herbert: I guess I raise the issue because it's concerning to me and, I'm sure, to those that are very interested in the archaeological history of our province that we would have somebody go into a site, check it out, do a report on the work that was going on there — kind of a map, so to speak — and submit the report.
It could be submitted with errors. It could be submitted without correct information, which, then, in future, should somebody go back to that site — maybe the site is going to be developed or something — could imperil that archaeological history.
That's the concern that I have. That a report would be rubber-stamped without being reviewed after sitting in a desk or in a file for two years kind of speaks to the archaeological history of our province. It doesn't seem to be as much of a priority as I think it could be.
Maybe I don't understand the process correctly, but that's how it was described to me by an archaeological consultant. Is that a risk, or am I just concerned about nothing?
Hon. K. Krueger: Nothing is rubber-stamped. Our energies are focused on areas where there is activity. The member said that if people do go back into the site, then what would happen? As soon as we had indications that people were going back into a site, then that's activity. We would focus on that.
We're going to provide the member with a letter that gives him further detail.
S. Chandra Herbert: I guess the question…. I still have it. It does seem to me…. Maybe terminology is the disagreement here. But an unreviewed report which has been approved does sound to me like what rubber-stamping is. It's been approved.
I know the letter goes on to say that in future if anything happens on this site, they may contact the person who did the report to try and get further information — maybe having to look at the report again.
Well, as we know, development in the province can happen very quickly. It can happen very slowly. So we may be in a position where somebody files their report. Maybe they don't put in the proper location markings, maybe they don't put in something that's crucial for an understanding of what that site looks like for a future developer. Then when we go back to develop in 20 years, let's try and contact the person who created the report. That person may have moved out of province. That person may have moved out of the land of the living.
So how does that square with this not being rubber-stamped, when it's being approved without being reviewed?
Hon. K. Krueger: The strides that we are making with automation are enabling us to make more efficient use of staff time. It only makes sense that we would focus
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staff resources on those sites where there is activity. If a report has been received and is on file, then if activity begins on one of those sites, obviously that report would come into play. But we are going to provide the member a more fulsome answer in writing.
S. Chandra Herbert: Thanks to the minister for that question. It still doesn't, I don't think, address the fundamental question of what happens in terms of that length of time.
I look forward to the letter which describes that from the archaeology department so that I can see if they have an answer for that question, because it's one I've had raised, actually, by more than one archaeologist, which is interesting to me, since I don't often hear from archaeologists. I'm sure most MLAs don't. That is a concern for them.
My colleague from Powell River–Sunshine Coast has a question relating to archaeology, heritage and that kind of issue so I'll let him take the floor here.
N. Simons: Thank you to the minister and to staff for being here. I have a brief question about Keats Island, the Maple Beach issue. I'm just wondering. Once the ministry has been informed of a potentially adverse impact on a registered archaeological site, what's the ministry's responsibility to address that? Could he maybe explain what has happened thus far?
Hon. K. Krueger: The member met with me, and we had the assistance of our Assistant Deputy Minister, Peter Walters, who is here with us today. The member has made us aware of the issue. It is being investigated further to determine if there is impact on an archaeological site by the works that have taken place at the site and if there would be by any other works that are contemplated.
We are assisted in that by the integrated land management bureau and other agencies. We seek to make a determination whether there has been any issue that will be of concern under the Heritage Conservation Act.
N. Simons: Has any member of the staff visited the site? Is that projected as one of the possible options, and if so, is there enforcement capability if, in fact, an infringement is determined to have occurred?
I know that the Squamish Nation is highly concerned about this. They've put their concerns in writing, both in 2004 as well as this year, as Keats Island is an historical, culturally significant place in their traditional territory. I'm just wondering if there's a possible explanation for the Squamish Nation on what might be next in this process.
Hon. K. Krueger: We have not had our own archaeological staff visit the site. We'll be relying on an independent archaeologist. It really isn't appropriate, now that the matter is under investigation, for me to be commenting on it further, because the member brought it to our attention, and it is under investigation under the Heritage Conservation Act.
N. Simons: Thank you for that response. Can the minister tell me how many complaints he receives on a yearly basis under the Heritage Conservation Act?
Hon. K. Krueger: We'll do a search on that and respond to the member in writing. I personally have not had a lot, but these are concerns, particularly by First Nations people, that we take very seriously. I have met, and Mr. Walters with me, with First Nations, and we have reactivated a joint working group with them. There is a real spirit of cooperation and goodwill between us.
S. Chandra Herbert: The final question for today before we draw these estimates to a close would be about…. We had the complaints issue raised by my colleague from Powell River–Sunshine Coast. Also interested in how many investigations are being done by the ministry into complaints around archaeological concerns or heritage desecration — things like that. How many investigations? Also, how many fines or penalties have been issued in this last year, maybe over the last couple of years? Just so I get an idea.
I'd be happy to get that in the form of a letter, because I know you'd have to go back and look through the records. But I want to know how effective the heritage act that we have in this province is. I can read the act. It looks like it could be effective, but from what people have told me in the field, they're not so sure that it is. That will be helpful in that assessment.
I just wanted to draw this to a close — to say thank you to the minister and his staff for sharing what they could. Obviously, I wish they could share more than they have. I thought it was funny that I got a document relating to the tourism development, line by line for that area, and at the top of it, it said "can be shared" or something like that. I wanted to get the page behind it that said "don't share with the opposition." But, alas, that didn't happen this time.
Thank you to the Ministry of Tourism, Culture and the Arts and everybody who works in it. I really appreciate your work. On behalf of the official opposition, we're interested in doing what we can to support the sectors that rely on this ministry.
Hon. K. Krueger: We're certainly willing to provide that information in writing to the member. We are presently compiling it for the joint working group, and we'll include him in that.
I appreciate the member's kind closing remarks and want to thank the critic and his colleagues for their
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participation in this debate. I guess it's time to take the vote.
Vote 44: ministry operations, $113,617,000 — approved.
The Chair: Committee A will stand recessed until 4 p.m.
The committee recessed from 3:44 p.m. to 4:05 p.m.
[J. McIntyre in the chair.]
ESTIMATES: MINISTRY OF
AGRICULTURE AND LANDS
On Vote 14: ministry operations, $68,494,000.
Hon. S. Thomson: It's a real pleasure to be here this afternoon for the estimates of the Ministry of Agriculture and Lands. I'm accompanied by a number of ministry staff today, and I'll introduce the ones who are here with me currently. There may be others joining as appropriate, and when they do, I'll introduce them.
I have with me Larry Pedersen, our deputy minister; Anne Minnings, our senior financial officer; and Lindsay Kislock, the assistant deputy minister for agricultural operations division.
As I said, it's a real honour to be here today to speak to the estimates of the ministry. It's been ten months since I had the honour and the privilege of being appointed as Minister of Agriculture and Lands, and I have come to know many of the staff that work in our ministry and really appreciate and value their daily contribution to the work of government and the work of ministry on behalf of the agriculture and food industry in the province.
It's also been a real pleasure over the last ten months to work with our industry, with our primary producers, our processors, our small-scale processors — all the parts of the value chain in this industry — and with the stakeholder groups, the environmental NGOs and organizations and all groups that have an interest in agriculture and agrifood policy in the province. I've had the real pleasure of being able to get around the regions in the province and meet directly with those groups, both around the province and here in Victoria.
The ministry budget this year has been reduced by 3.9 percent overall, compared to the previous year. While this is not a huge change, it is nonetheless significant, and it has resulted in the ministry having to identify key priorities that we will focus on this year.
The ministry has worked hard to ensure that despite the economic challenges facing government, we are still able to focus on critical ministry services. This budget gives us the capacity to continue to meet our commitments to B.C.'s agriculture sector under the $533 million Growing Forward agreement with Canada and to provide the important business risk-management support to the industry.
We've taken over the delivery of the AgriStability program and brought the administration of that program here to British Columbia. This is going to give us the ability to provide cost-effective, timely, improved client service of these important business risk-management programs directly to the agriculture sector and the producers that are involved in those programs right here in British Columbia.
We're maintaining our state-of-the-art containment level 3 diagnostic lab, which is an important part of maintaining our capacity to properly respond to animal and plant disease outbreaks, to protect the environment, to meet our biosecurity objectives and to protect plants and animal health.
My ministry remains committed to the continued development of B.C. agriculture and food products at local and provincial levels and to ensuring that we maintain our reputation as leaders in environmental stewardship, food safety, quality and adaptation.
We recognize the challenges facing farmers. This industry is not immune to the very significant global economic challenges that have faced the province and the industry. The agriculture and food industry is facing those issues as well, and as I said, we're not immune to them, and there are many significant challenges that we are working on.
While this budget allows us to continue to support the national business risk-management program framework, it also allows us to continue to work closely with farmers to find innovative ways to support this industry in the middle of this global economic crisis that is beyond our direct control.
As you know, the agriculture industry is very much a mixed jurisdiction between provincial and federal responsibilities, so it's been very important for us to maintain a good working relationship with our federal government. We've done that through our Growing Forward program, and we have also done that by maintaining a very positive working relationship with the federal Minister of Agriculture through our federal-provincial-territorial tables and working groups on many issues.
Also very important within our ministry is the support for our Crown land resources in this province. We have maintained our ability to respond to the demand for sponsored Crown grants through the Crown land account. This important program allocates Crown land to meet strategic goals at the municipal level while ensuring accounting and transparency for land costs.
While budget levels have fluctuated in recent years, we have maintained the ability to investigate Crown contaminated sites. This budget, actually, is an increase
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to the capacity or the activity for this year. We will investigate five more priority sites, bringing the total number of sites to 77.
Remediation work has been completed or isn't needed on 45 sites. There are investigations and ongoing work on the rest of the sites.
Our award-winning brownfield renewal program will continue to support community revitalization across the province. We're also continuing the innovative work we do to bring strategic land parcels with local governments, First Nations and private sector partners to create jobs, diversify the economy, create wealth and respond to the needs of B.C. communities.
I'm looking forward to the questions from the member for Saanich South and all members of the House. We'll do our best to answer the questions in the most comprehensive, frank way that we can. I look forward to the estimates and getting the process started.
L. Popham: It's a pleasure to be here today as well. I'd like to reflect a little bit on my past year being the Agriculture critic.
I was fortunate to get this position. When I first got it, I felt slightly overwhelmed, because when I thought of the Ministry of Agriculture, it changed the way I thought about agriculture in B.C.
Up until this point I had thought about the small farming communities and the ranchers that I knew personally, and it didn't seem to fit into a ministry. It just seemed to be part of our province and the way it worked.
Over the last year I've travelled the province, and I've been reintroduced to the fact that the Ministry of Agriculture is all of us farmers working together, it's all of our communities working together, and it's everybody in the industry trying to find a better way to do things and trying to make agriculture a priority in this province.
The conversations I've had have been encouraging, and they've also been alarming in some ways, because I think that we're trying to protect an industry with a budget that is too small. What makes me feel good at this point is knowing that the Minister of Agriculture is from that same industry that I'm from, and I think that he wants agriculture to be a priority. I don't see that happening in the ministry as a whole, and that's what I'll get into today.
I understand that we're in a global situation with the economy. I think there is some recovery happening. But it strikes me as odd that we wouldn't be putting more money into an agricultural budget, because I think that when we are in a crisis, that's probably one of our strengths in British Columbia.
So I'm going to start off. I think the minister and I have a good relationship. Because of that, on November 3, I wrote to the minister asking for the re-establishment of a standing committee on agriculture. I think that it's a legislative committee that worked very well. It helped us all communicate in a way that was going to benefit agriculture.
The letter I received back was that it was something that he was interested in but that the decision to re-establish the standing committee is a matter that was best decided between the House Leaders. I then wrote again and asked if both our House Leaders could entertain this idea. I haven't heard anything back as of yet, and I'm just wondering if the minister has.
Hon. S. Thomson: As you know, we're working in a number of processes where we are working in partnership with the industry in a number of ways, looking at many of the issues. We've had the ranching task force approach, and we've had a report on their working across all parts of the value chain, dealing with that. We've recently committed to implement a round-table process through the Vegetable Marketing Commission to deal with some of the challenges facing the vegetable industry.
We continue to work through those partnership approaches. I think we're going to continue do that. We have a good working relationship with the industry across the province. I will commit to follow up on your specific request.
L. Popham: Thank you very much for that answer. I understand the importance of those other committees. I just want to establish that it is something that the minister will be pushing for and is supportive of.
Hon. S. Thomson: I think the important point to realize is that the approach around the standing committees has a significant financial impact in terms of the operation of the committee. That is something that would have to be taken into consideration. But as I said, I will commit to have further discussions with the House Leader in terms of the specific requests that you have made and to ensure that there's a response.
L. Popham: I understand that, but I think my point is that the other committees also have a cost to them. The difference between those committees and the one that I'm talking about is that the opposition members are not able to participate. That's one of the roles that I'd like to play. That's why I'm pushing for this committee specifically. I'm just wondering if that's something you're interested in as well.
Hon. S. Thomson: As I said previously in the last estimates, it is something that I think we need to look at. As I said in my answer previously, I will commit to follow up on your specific request.
[ Page 4076 ]
L. Popham: Okay. Well, I'll leave it with the minister. Thank you.
The next topic that I want to talk about is the HST, and it's quite a fitting topic today. From the discussions that we've had in the House regarding the HST, there has been a commitment by the government to bring up examples of what part of the industry supports the HST. I've heard repeatedly that the Agriculture Council supports the HST, and that, therefore, the Agriculture Minister supports the HST.
I've also had conversations with the Agriculture Council, and I can see where the HST will help large industrial agriculture and large agriculture. But the conversation that I've had reinforced the fact that it doesn't help small farms. What was alarming for me in the House today, listening to the Minister of Finance…. He stated that the HST will be helpful for agriculture because it'll allow farmers to lower their costs of food for consumers. That's alarming for me, because one of the problems with agriculture is that the cost of food is too low now, and they can't make a living.
Having an HST that will assist larger farms to lower their prices is setting up small farms for a disaster. I would just like to hear about the studies that were given to the minister so he could support the HST. I would like to hear about the ones that were coming from the larger farms and if there's been a study that shows how it'll affect smaller farms.
Hon. S. Thomson: I think the important point here is that the move to a harmonized sales tax, with the way it applies to agriculture, benefits all farms — large and small — because of the ability to now be able to claim the full input tax credits on all your farm inputs. You previously weren't able to do this as a small farmer, a medium-sized farmer or a larger farmer, as a small-scale processor or as a medium-sized processor.
All those components of the industry benefit from being able to claim the full input tax credits on farm inputs, which means they can lower their cost of production, which leads to increased profitability through all the sizes of scale of farm operations.
L. Popham: I'm just going to quote from the Finance Minister today. I'm going to ask my question in a different way. The Minister of Finance says:
"The B.C. Agriculture Council fully endorses the shift to harmonized sales tax. You know why? Because it's good for farmers and ranchers in British Columbia. It allows them to remove costs from their cost of doing business so that they can actually provide prices to the consumers in British Columbia that are cheaper. That makes them more competitive. It means that there are going to be more British Columbians buying British Columbia agricultural products rather than imported agriculture products with which they're trying to compete."
The concern that I have is that the HST is being used as a tool for large farms to compete in a market where cheap produce is being dumped into our market. For me, that's not a tool to use. The problem that farmers are having is making a living, so if there is a way for them to reduce costs with inputs, it sounds to me like the plan is that they then reduce the cost of their foods, and that's how they become competitive.
That's not how it works. Farmers are not making money right now, so we need to have a chance for them, if their inputs are lower, that their food costs are higher. That's a business plan. Asking them to reduce their costs as a benefit for the HST does not work, and it also reflects badly on the small farms because they don't have any more room to decrease their costs and their inputs aren't as high. Small and medium farms are not going to benefit, but if they are, I would like to see the study that the minister has.
Hon. S. Thomson: As the member opposite knows, the B.C. Agriculture Council — which is a broad umbrella organization representing all farmers in British Columbia, including larger farmers, medium-sized farmers and smaller-scale farm operations through the FARM Community Council component of the membership within the council — fully supports and endorses the harmonized sales tax.
It's something that the industry has been calling for, for a number of years through many submissions to the Standing Committee on Finance, calling for a harmonized system and calling for change to the antiquated PST system that was not applied fairly and consistently within the sector.
The move to a harmonized sales tax makes the industry more competitive, makes them more profitable, reduces cost and makes them more competitive on an international scale, a national scale and provincially. So this is a positive move.
Many of the organizations across the province — not just the B.C. Agriculture Council, but the B.C. Grain Producers Association, the B.C. Cattlemen's Association, the B.C. Food Growers Association and the B.C. Food Processors Association — have all applauded the move and have all said that this is the right decision to make the industry more competitive, to remove costs for producers. That's why this is the right decision for this industry at this time.
L. Popham: I'm having a hard time understanding how it makes them more competitive. I'm listening to what I heard in the House from the Finance Minister, and he says that it makes them more competitive because they can reduce the prices on their food. Is that correct?
Hon. S. Thomson: The important point to recognize is that by being able to claim the full input tax credits,
[ Page 4077 ]
it does reduce the costs. So this is reducing the cost of production for producers. It is, as I said, a benefit to all operations in terms of larger, smaller and medium-sized farm operations. All of them benefit because all of them will now be able to claim the full range of input tax credits and receive full rebates on all the harmonized sales tax that they will pay.
Previously they were not able to do that. It was a patchwork approach to what was eligible for a PST exemption. There were many farm input costs, many legitimate costs in farm operations that were not eligible, which they paid PST on, which they had to pay. Now they get the full HST tax credit, input tax credit, just as they have had up to this point on the GST.
The items that were previously zero-rated in agriculture for GST will continue to stay GST-zero-rated. That means they won't pay the HST on those items. That was a move, when GST came in, to assist with cash flow and farm operations for major farm input costs. But the real issue levels the playing field for our industry against all those other jurisdictions that have a harmonized sales tax approach: the Atlantic provinces, Ontario, many of the European countries which we compete against that have the harmonized sales tax.
The options for the producers are to have more profit in their operations. As you know, many of them are challenged right now with that level of profitability, so we need to find ways to reduce their costs to make them more competitive. They also have the option in terms of pricing to be able to compete against those products where there's profit in the industry, to do that to make sure that we have the focus on the local food producers and on B.C. product and consumers buying the B.C. product as opposed to buying it from another jurisdiction or another area.
This is a move that makes the industry more competitive, and it's going to put our industry on a sounder footing going forward.
The Chair: I know how everyone is very keen to be debating HST right now. It is the topic in the House and others, but it's very important that I remind you that HST in the form of Bill 9, the Consumption Tax Rebate and Transition Act, is currently before the House. I must remind all members of this committee to be sensitive to that.
As well, the need for legislation or matters affecting legislation are not a proper subject for estimates, which is before the Committee of Supply. I think it would be wise to say that some of this debate would be better considered during Committee of the Whole for the bill when it's in the House and when it arrives. I've been advised to caution all members.
The Chair: Rules and the sensitivities. If I could just clarify, Bill 9 is before this House, and it does affect it.
J. Horgan: I'm just curious. The harmonized sales tax that the member is referring to is a federal tax. She's asking what the impact of that will be on the sector that the minister is responsible for. I don't see it having any bearing whatsoever on Bill 9 and the debate that's taking place in the House today.
The Chair: Excuse me. That was right out of order. Would you please withdraw.
J. Horgan: I will certainly withdraw.
J. Horgan: And you can take that quote and do something with it as well.
The Chair: Order.
I'm conferring with the Clerk to the point you raised. Would you please allow me to do that for one moment. Order in the room.
I'm reminding all members that this bill is before the House. I'm just asking for members to be sensitive to that fact and the two points that I mentioned. So I'm just asking and cautioning.
J. Rustad: Although there has been an offer to withdraw, I would request an apology from him for making such an unparliamentary type of remark within this House.
The Chair: Sorry, if I can just respond. Member, you have heard the apology, and I think we should just move on at this stage.
On Vote 14, Member.
L. Popham: Thank you for the clarification, but I've been advised that we're actually debating the PST in the House, and not the HST. Is that not right?
The Chair: I'm just asking for the sensitivities, the rules running the House — asking to be sensitive to legislation debate that's going on in the House. We have to be sensitive to that. I'm not going to be drawn into the intricacies of it.
L. Popham: I'll be sensitive to the debate on the PST, but I think I have questions that do pertain to how the HST will affect the industry. I still feel that's going to be okay for this vote.
The Chair: I'll just say that if you can tie that into questions about Vote 14.…
[ Page 4078 ]
L. Popham: Yes, I understand that, and I'm hoping that's what I was doing. I was commenting on the viability of the agriculture industry. I don't remember if we got past that. I don't even remember what question we were on anymore, but anyway….
I think the point I was trying to make is that the agriculture industry is vulnerable right now. They are requesting aid at all times, and that's not subsidy aid. That's policy aid, things that will make agriculture work better in our province.
Bringing in, supporting a tax system that is going to require producers to decrease their costs to the public, taking more value away from our agriculture products, to me is setting us up for more of a disaster. So I don't agree with it.
One of the things that I think is critical — and maybe this is the report I would like to see from the minister, as well, on the viability of our industry….
The restaurant industry and the agriculture industry have a partnership in B.C. Specifically, I know Vancouver Island. It's a very, very critical relationship for these farms, and these are small and medium farms. The issue of putting a tax on the restaurant industry that harms them and takes away their purchasing power immediately affects the agriculture industry.
So I'm just wondering if there's been a report showing the effects on the restaurant industry and agriculture industry relationship and the HST.
Hon. S. Thomson: We'll take a bit of direction on this. I think, as has been raised, I'm becoming a little concerned that this is moving beyond debate on the estimates and our spending, which is the focus of this process. I do appreciate the member opposite's comments around the viability of the industry in the future. I think that's a concern that we both share.
[H. Bloy in the chair.]
In my opening comments I talked about the challenges facing the industry. But I think the important point is that when you can have a policy that takes $16 million to $18 million of cost directly out of the bottom line for producers on the primary sector — and to some degree, somewhere, estimates of $24 million to $26 million in total when you add the small-scale processing and the food-processing industry — that is a benefit to the industry, and that helps improve their viability going forward.
L. Popham: I understand that answer. I guess my question is: is that savings that the industry will see to be reflected in their profit that they get to take home and put in their pocket, or is that to be used as leverage to drop their prices to compete internationally?
Hon. S. Thomson: I think the point here is that in many cases in our industry we are price takers. What this does is allow our industry, because we're removing costs…. We compete in an interprovincial and an international market. Because we're improving the viability by removing that magnitude of costs from the industry in terms of reducing their costs of production, it makes our industry more viable and more competitive and will be beneficial for the industry.
L. Popham: Well, I think my point is that food is actually undervalued and that the prices that farmers are charging…. They're being forced to charge lower prices because we have a situation where they're expected to drop it, and we're undervaluing their goods. We can see that. I'll be getting into the situation with the apple growers later on, but I think they're in the exact situation that I'm talking about.
In North America we pay typically 15 percent of our income. We use that for food. We pay less for food than most places in the world, and that includes Europe. So I'm just wondering. It's confusing to me that the budget for agriculture is dropping. We're asking the farmers to drop their prices, which was demonstrated by the Minister of Finance today. That's our tool to address strengthening the agriculture industry.
I guess I would just like a more thorough explanation because it doesn't make sense to me, and I've had this conversation with farmers across the province. It actually doesn't make sense to them either.
If you expect the savings to be coming to the farmer through the HST, a tax system…. We don't even need to call it the HST if that's not acceptable in this place. If you're changing the tax system and allowing the farmers to save on their inputs, the profit that they're going to now make on the prices that are already there is the first profit that some of them will have made in a while. That profit will lead to their viability.
We see farms shutting down. We see that in the cattle industry. We see that in the fruit industry. So I'm just wondering: does the minister expect farmers to drop their prices?
Hon. S. Thomson: Again, I'd like to seek the guidance of the Chair because I think this is continuing to move in a direction around debating something that is being debated through the legislation that has been introduced and is not specific to the estimates of the ministry. But I'm quite happy to answer the question, and I think it goes right back to quite simple economics 101.
The HST is going to reduce the farmers' costs of production. The price charged by farmers for products is determined by the market, so anytime we can have a policy that takes $16 million to $18 million of costs out of the bottom line for producers and an equiva-
[ Page 4079 ]
lent amount for the small-scale food processors and food processors in this province to make our industry more competitive is beneficial. It's something, as I said, that the industry has been calling for, for a number of years.
The wide range of agricultural producer organizations across the province have said that this is a beneficial policy, that this is the right thing to do and is supported by groups across this country, including many of the groups that the member opposite references — B.C. Cattlemen's Association, B.C. Fruit Growers Association, B.C. Grain Producers. Those groups that are, as she mentioned, currently challenged are ones who've said that this is a beneficial policy. It's going to help reduce their costs and help them improve their viability for the long term.
Now, this isn't the single move that does it. There are many other issues that we need to deal with in the agriculture sector for these groups. That's why we've had a ranching task force bringing forward a number of recommendations. That's why I've agreed that we would look at a round table for the vegetable commission.
That's why I'm currently continuing to have constructive discussions with the B.C. Fruit Growers Association around issues within their sector. This is not the panacea, but this is a very beneficial move for the industry. It has been called for by the industry over many years and will significantly assist in lowering their cost of production and significantly improve their viability for the future and their options to be more competitive in the marketplace and in the industry.
L. Popham: I just want to clarify if the minister is saying that farmers are losing money due to input costs. Or is it due to low costs of our products that they're selling?
Hon. S. Thomson: Thank you for the question. I think the issue is that there's no one single cause of the challenges facing the sector. In some respects, in some cases it's input costs. In some cases it's international market and being in a very competitive international market. There's a whole number of factors, and that's why we have processes underway where we are working with those sectors.
We're a very diverse industry — 250 different commodities, a very diverse range of sizes of farm operations, different regional issues across the province — as the member opposite knows since she has been out meeting with the groups, just as I have.
There's a combination of things, but one of the very beneficial moves is anytime you can take $25 million of cost out of the cost of production, the cost of doing business…. To that whole range of commodities and sectors and groups that we have across the province, that's a beneficial move. It's something, as I said, that the industry has been calling for, for many years. When the decision was announced, the industry applauded across the sectors, across all the groups. This will assist them in being more competitive.
L. Popham: I understand that answer. I understand what you're saying, but I guess I'm still having a hard time understanding specific issues. I'm going to give you an example. The berry farmer on Oldfield Road is charging $4.50 for a pint of raspberries. It's a smaller farm, a medium-sized farm. He depends on drive-by traffic, and he depends on the restaurant industry. He also supplies to local grocery stores. A larger farm, an industrial-sized raspberry farm, has received the benefit of the HST — not as many inputs — and is able to drop that price down to $2.50.
What happens to the medium-sized and small farms that don't have that room to play? How does that help farming in B.C.?
Hon. S. Thomson: Again, I want to make the point that we're here to address the estimates for the ministry, not to have a debate about the economic challenges facing the industry.
Both my opening comments and comments by the member opposite are significant. It is a complicated value chain that is out there in the industry. The HST, which is the focus of this discussion, is beneficial to all of those. It makes that producer on Oldfield Road more competitive because it will remove costs. It's a different scale than the larger producer, but removing that volume of cost from the industry across all the sectors will make the industry more competitive.
It allows our producers to be more competitive against those international marketplaces. The price for the commercial raspberry producers is not being set by that raspberry producer. It's being set by the international marketplace and competition from California and other areas. So the fact that we can remove costs for him makes him more competitive and able to compete with that price.
That price is still there, even for that smaller producer on Oldfield Road who's getting that. He's taking advantage of the value chain and the approach to marketing. That's his business plan, and it's a business plan that may be working for him. We have to work across the sector, recognizing the different size of operations and different scale of operations. This harmonized sales tax, as I mentioned, is one that is beneficial to all sectors of the industry.
L. Popham: You know, I've gone through the HST. I run my own farm. I've talked to farmers. I understand the input cost situation. I understand that completely, but where you lose me is asking farmers to drop their
[ Page 4080 ]
prices. I think that flies in the face of what we're doing with agriculture or trying to do. I think it flies in the face of the agriculture plan, but I'll move on to a different topic now because time is short. I'm going to move on to another favourite topic, and that's promotion at the Olympics with agriculture.
The minister has stated that the government has leveraged the Olympic Games for an unprecedented amount of exposure to B.C.'s agricultural products. I'd just like to know what evidence the ministry or the minister has that these programs are a long-term benefit to local markets and of the recognition of B.C. brands to residents who did not have the opportunity to attend the hosted galas.
Hon. S. Thomson: Again, we don't specifically have a metric that says you can measure exactly the benefit that was received, but I think the important point to recognize is that this was an unprecedented opportunity to profile our industry to an international, national and provincial audience — international media, international business, international partners, national attention, provincial attention.
Our products were well featured through a whole number of opportunities and events that took place at the Olympics. They were well featured. They were well received. People recognized the tremendous quality of our products, the tremendous diversity, both at the primary level and as producers.
We provided the opportunity, in all of those initiatives that we undertook, to make sure that the total value chain in the industry was profiled. That included producers, processors, retailers and the restaurant community. We showed the partnership between the industry and the great chefs we have that are producing B.C. products.
Just for example, on B.C. Street in Richmond a number of our regions were featured — the Comox Valley, the South Okanagan, the Cariboo — all with significant representation of their agriculture products from their regions in there. We had 10,000 people a day through B.C. Street, all stopping in those venues to see what those regions were producing.
Focusing on the shellfish from Comox, the wines and fruit from the Okanagan, the beef and other products, the maple syrup and birch syrup from the Cariboo — all of those opportunities, I think, pay tremendous long-term benefit for our industry in terms of the profile that was achieved, as I said, provincially, nationally and internationally.
L. Popham: The minister has said that these events have come together as a highly successful branding initiative in its own right. From his answer I understand what he is saying, but I would be really interested in knowing how…. The minister said there wasn't a metric for measuring.
How will this success be measured over the next little while? Will there be reports come out that show how products were displayed and who saw these products? How is that going to affect our agriculture industry over the next few years?
Hon. S. Thomson: I think one of the important measurements of the success of what we did was the number of organizations that have asked for those kinds of things to be continued, for the relationships to continue to be developed. Most of the organizations that participated provided the product for it. They see the value in it.
We have asked staff, and staff will be continuing to work on an ongoing basis on following up on the relationships that were developed there, the connections that were made, the opportunities that will present themselves by being able to feature the industry. We are going to continue to do that, and we'll continue to measure. We will be getting that information.
I think a lot of the information will come from those commodity organizations that participate in that, because they're the ones that continue to do the active marketing initiatives based on those relationships that were developed.
L. Popham: Can you tell me: how were the people selected to display their products for the Olympics?
Hon. S. Thomson: For the majority of the events, or the significant ones, we went to the industry associations to get their input as to the people that would participate — the commodity groups, the sectors, the organizations, the companies. So that was through…. The B.C. Agriculture Council, the B.C. Food Processors Association, the B.C. Wine Institute selected those participants. That was in the majority of the cases.
L. Popham: Was that a formal process that they used to select the participants?
Hon. S. Thomson: I'm not sure what you mean strictly by a formal process. There was a structured process involving the organizations, and they are the ones that provided the input to us. I think the important point to recognize, though, is that by structuring it and working with the planning committee and putting the events on, we wanted to make sure that the total cross-section of the industry was represented.
The people that were there, while they may have come from a specific operation or specific farm, were there representing the total industry. So they knew they were there representing the cattle industry, or they knew they were there representing the hog in-
[ Page 4081 ]
dustry. They knew they were there representing the blueberry industry.
That was the basis of the way…. Because we were featuring the products, that was the focus, not necessarily the individual, specific farm enterprises or farm operations on their own.
L. Popham: Can you tell me how much money was spent on the promotion of B.C. agricultural products at the Olympics?
Hon. S. Thomson: Again — and I'll take the direction of the Chair, because this issue has been raised in previous estimates before this — this is relating to previous years' expenditures. There is a process where that information will be coming out through the public accounts process. We're here to debate and discuss the estimates for 2010-2011, so I think this is….
As I said, this was a very successful event, a great opportunity for the industry. The reports and processes around the cost of those will be coming out through the public accounts process that the ministers responsible for that will be doing.
The Chair: Member, all questions should be referred back or compared to the 2010-2011 estimates.
L. Popham: Maybe the minister could tell me the line item where this promotional money would be coming from in the previous budget. Can you tell me the difference between the previous budget and this budget?
Hon. S. Thomson: In the previous estimates, funding for this initiative would have come out of the "Strategic Policy, Investment and Innovation" budget line in the previous budgets, under Vote 14. That comparable number for this year was $4.083 million. The comparable number is $3.938 million — about a $150,000 drop from the previous year to this year.
L. Popham: Does the number this year reflect Olympic-related costs?
Hon. S. Thomson: No.
L. Popham: Just to be clear, how much Olympic-related expense is there in this year's Agriculture budget?
Hon. S. Thomson: Just to be clear, in the '10-11 budget that is the subject of these estimates, there are no Olympic-related costs in that budget.
L. Popham: How does that compare to last year's estimates?
Hon. S. Thomson: Within that vote there are no specific Olympic-related costs within that budget line. This is general marketing initiatives within that overall vote, and as I said, there are no Olympic costs in '10-11.
J. Kwan: It's a pleasure to be in estimates again in this House on a different topic.
Could the minister please provide the numbers, then, comparing this year's fiscal budget from his ministry on Olympic-related expenditures to that of last year? If he can give a clear number on what was expended in terms of that difference between this year…. What I heard him say was that this year there were zero dollars allocated for Olympic-related expenditures. So that, compared to '09-10 — what is the difference?
Hon. S. Thomson: As I answered previously, there was no specific allocation for Olympic costs in the '09-10 budget. Our initiatives were funded out of the general marketing capacity within that overall vote of $4.08 million. The comparable in this budget, as I mentioned, is about $150,000 less in this line item within this vote. That's about a $150,000 reduction. That is because of general budget pressures and attrition and other things, not as a result of a comparable to Olympic costs.
J. Kwan: So out of the $4.083 million that the minister mentioned, while there's no direct line item, what was the actual expenditure, then, that was put towards Olympic-related expenses? Let's do it on an initiative-by-initiative basis. If the minister must have a comparison, instead of asking and answering a straight-up forward question, then let's compare those initiative by initiatives of the '09-10 budget to that of this year's fiscal which, of course, with this year's fiscal budget…. The baseline is at zero.
Hon. S. Thomson: Again, I want to ensure that we are focusing on the '10-11 budget estimates. We did four significant initiatives at the Olympics to feature B.C. products. We did an initiative with the First Nations Agricultural Association to feature First Nations agricultural products and everything that they were doing growing the aboriginal agriculture industry.
We did a Canadian food and wine affair. That was the major initiative that involved a broad cross-section of the industry and the initiative I talked about before with bringing primary producers, processors, the retail industry and chefs together. That was featuring the industry to international media.
The berry industries worked, providing a real focus on the berry industry during a Valentine's event in providing a dessert process around one of the events. We also did an initiative with Canada AM featuring chefs in
[ Page 4082 ]
the B.C. industry and B.C. food products. We also had the opportunity to promote the industry by distributing B.C. food products to over 2,000 people in a breakfast process in Robson Square in the morning.
All of these initiatives were supported by industry partners, by the federal government through our Growing Forward agreement. So the overall cost of doing all of those initiatives was somewhere in the range — and the full details will come out in Public Accounts — of $80,000. Again, as I said, there were no Olympic-related costs in the '10-11 budget.
J. Kwan: Then, by way of comparison of the '10-11 budget to the '09-10 budget, approximately $80,000 was expended on Olympic-related expenditures doing these four promotional events, if you will, that the minister highlighted. Is that correct?
Hon. S. Thomson: Primarily, those costs, as I mentioned, were cost-recovered from industry partners and the federal government partner through Growing Forward. The primary cost to the ministry was staff time and staff expertise in the process, and that was within the capacity of the existing line item within the budget.
That comparable goes across into the '10-11 budget, where I've indicated that we have a $4 million budget in that line item — previously reduced by about $150,000 — into the '10-11 estimates. So that capacity is still there, within that overall vote, within the ministry, for staffing and work in the whole line item that's covered by that vote in terms of marketing and initiatives and industry promotion.
J. Kwan: If I understood the minister correctly, then the $80,000 that he referenced was paid for by industry and the federal government. He said it was recovered through the partners, so presumably those partners which he mentioned are industry partners and the federal government. In other words, from the provincial government the dollars spent in the '09-10 budget from this ministry for Olympic-related expenditures, then, is zero. The only cost item that came from this ministry would be staffing support to engage in these promotional events.
In other words, the difference between the '10-11 budget in comparison to that of the '09-10 budget for Olympic-related expenditure is zero out of this ministry. Isn't that correct? It's zero, and the only difference, where this ministry had put expenditures into Olympic-related expenditures, would be through staffing costs only. Can the minister confirm that for me?
Hon. S. Thomson: I think it's fair to say that, in general, that assertion is correct. There may be a few very minor things in that overall, but in your general assertion, that's the correct assumption. The difference between '09-10 and '10-11 — the $150,000 reduction in this line item within this vote — is not Olympic-related. That is just a general reduction in that line item, reflective of the overall budget adjustments across the ministry.
J. Kwan: I just want to be clear. In terms of Olympic-related activities, that would be all activities — right? — not just the showcasing initiatives that the minister highlighted. I'm talking about all Olympic-related activities, whether it be purchase of tickets or hosting of delegations at events and such. I just want to be clear with the minister on that point.
Hon. S. Thomson: From the ministry perspective, we did not host other events. We did not buy any tickets. The outline that I have just provided in the answer I gave you previously reflects the ministry costs.
I'll just say that as a minister of government, I did have some other responsibilities. I did officially host a couple of other events as a representative of the government. Those costs will come out through the reporting and the public accounts process that we talked about previously.
The Chair: Member, if I could just remind you to bring the questions back to the 2010-2011 budget.
J. Kwan: Sure, absolutely, Mr. Chair. All of this is by way of comparison to the 2010-2011 budget, all the way even to the minister's own salary — right? In paying his salary in terms of him executing his work as the minister of the Crown, what activities he engaged in, in the '09-10 budget versus what he is expecting to engage in, in the '10-11 budget, would all be relevant. That's how we tie all these things together.
I'm sure the minister understands that, and I don't have to preface that with every single question that I begin with this topic. That would just be, frankly, redundant. But if I have to do that, I'll do that. We've lived through that experience not so long ago.
Presuming that we could be more efficient here, I'll move forward with the questions, with the proviso and understanding that this is always a comparison relative to that of the '10-11 budget, related to the Olympic expenditures and activities.
The minister says basically zero expenditures in the '09-10 budget from this ministry on all Olympic-related activities compared to the '10-11 budget, save and except for staffing support that was provided. We'll get to the staffing dollar expenditures in a moment, because there are other possibilities where expenditures might have come from the ministry — i.e., secondment for the Olympic event that came from this ministry. We'll get to that in a moment.
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Let me just ask the minister this question. He said a moment ago that he did attend in his official capacity as a minister of the Crown and hosted a few of the events.
Again, relative to that comparison, of the activities that he participated in, which events did he host on behalf of government in his capacity as a minister of the Crown? So that would be activities that this minister engaged in directly, as we compare those activities to those he anticipates to do in the '10-11 fiscal year. What is the difference in terms of those hosting activities? Tell us what you did in '09-10. That would be appreciated.
Hon. S. Thomson: As we've stated previously, this was a tremendous opportunity to be able to assist in promoting and creating awareness of the industry and looking for those economic opportunities for our sector and for the province in general, this unprecedented opportunity to be able to host the world, both nationally and internationally.
I spent a few days in that capacity as the official representative for a few events, where I participated in as the official government representative during the Olympic Games. If you wanted to compare that to the year going forward in '10-11 and my work in '10-11, I hope that I will continue to be able to have those times and those days working, in terms of continuing to promote this industry, and looking forward to some of the opportunities that will have developed from that work at the Olympic Games, the opportunities for the industry and for the province.
That will be part of my regular work as a minister of this government and as a representative of Agriculture and Lands working on behalf of producers in the province.
J. Kwan: Could the minister please tell us specifically: what events did he attend during the Olympic and Paralympic period? Could he tell us specifically what he attended? Which event did he actually attend?
Presumably, when you compare his calendar in the month of February for those specific events, it wouldn't be there in the '10-11 year. So could the minister be forthright about that and tell us exactly which event he did attend in his hosting capacity on behalf of the government?
Hon. S. Thomson: As I mentioned, this was an unparalleled opportunity to be able to represent the province and to be able to represent this industry, the agriculture and food industry, in those opportunities. I was proud to be able to do it.
As we mentioned earlier, both through the initiatives we took within the ministry to specifically focus on agriculture and food opportunities and as the general representative, I attended five events — two sporting events and three medal ceremonies where I was the official government representative, or host, for those opportunities.
Those provided the opportunities not only to create the relationships and things for the province in terms of business and economic opportunities going forward but, also, as Minister of Agriculture and Lands, I never miss the opportunity to make sure that in whatever event and whatever process I'm in that I take the chance to promote the great agriculture and food industry that we have in this province. Those opportunities where I was the official government representative were great opportunities to do that, and I made sure that I did.
J. Kwan: The five events that the minister attended…. Those were not tickets paid for by this ministry. Is that correct? It was paid for, I believe, in accordance with the Ministry of Small Business, the minister who attended the events in his official capacity for the sporting events and ceremonies. His tickets — I believe he said they were paid for by IGR. So I just want to be clear if that's the same parallel here with this minister.
Hon. S. Thomson: Acting as an official government representative, the host of those events, the ticketing…. The full report on tickets will come out through the report that's been promised by the ministers, and they do not come out of our ministry budget.
J. Kwan: So this ministry did not purchase any tickets, as he has said earlier. His attendance of the events was not paid for by this ministry, but the cost was picked up by someone else within government.
With the previous minister in another set of estimates, I believe he had advised the House that that was, I believe, picked up by IGR, intergovernmental relations. Is that the minister's understanding? Presumably, when a minister attends an event, he would be clear on who's hosting him, so to speak, in this instance. So is the host for the minister in attending those events through the intergovernmental relations part of the provincial government?
Hon. S. Thomson: As I mentioned, I did advise of the ticketed events that I was asked to be the official government representative at, in terms of representing the province and being the host of those events. Those tickets were not paid for out of our ministry. The full accounting and reports on the ticketing and business-hosting program…. That report, as has been indicated previously, will be provided.
J. Kwan: It's interesting. The minister says that he's proud to have attended these events and so on, but he won't be
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forthcoming on the answers, on the specifics around that. It does make one wonder, though, Mr. Chair.
We've heard from minister after minister who claims that they're proud of their activities and things that they have engaged in. Yet they won't be forthcoming. They won't be transparent. They're saying to taxpayers — who actually paid for these tickets, who paid for the minister to attend, who paid for his salary to attend these events — that they won't be forthcoming in telling the information, in sharing that information with the public.
That information belongs to the public domain. The minister actually attended these events. He attended these events on the taxpayers' dime in every way — in every way. We paid the minister to attend the event in his official capacity. That's the salary that pays the minister, as the Minister of Agriculture, to attend the event, albeit to do official business, and no one is questioning that at all.
All that I'm trying to get information on, on behalf of taxpayers of British Columbia, is: where did the tickets come from? Did the minister go on behalf of government, and were the tickets paid for by industry, for example? Was it paid for by a Crown corporation? Or was it paid for by another ministry within government?
The minister must know this information, one would presume, with respect to his activities. If I was the minister, I would want to know, before I accept any invitation to attend these events, the details of it. I presume that the minister would have done his due diligence in his capacity as the minister of the Crown, but why would he not share that information? He says: "But you have to wait for some report to be released."
It is a mystery to me why the government takes this approach. Maybe the minister has been instructed by somebody to take this approach, and I would suggest that it's the wrong way to go. It is about accountability, transparency and openness, and I trust that the minister did good work at these events. If you are as proud as you say you are, then be open and transparent and tell the public about that information.
I ask the minister again: who hosted him at these events? Could he share that information with the public at this time?
Hon. S. Thomson: I think I'm being as open and transparent as possible and as I need to be. I've disclosed the number of events that I attended. I have said that I was there as an official government representative. Those tickets were provided by the provincial government. They were not paid for by my ministry.
Now, in terms of specifically which ministry of government paid for those tickets, potentially, you could be right that it's IGR. All that I…. You know, I was asked to be the official representative. Those tickets were provided by the provincial government, so I was there on behalf of the government, and the tickets were provided by the government. I did not attend any events where the tickets were provided by anybody other than the provincial government.
The Chair: Member, and noting the hour.
J. Kwan: Oh, okay. I guess we'll have to come back on Monday.
Okay, so the minister is saying, then, that he doesn't know. Is that what the minister is saying — that he's not aware of who within government hosted him at these events?
Hon. S. Thomson: I'll reconfirm that I was the host at those events. The tickets for me to be hosting those events were provided for by the provincial government through the business-hosting program. The full report will be provided, as has been indicated previously.
I move that the committee rise, report resolution and completion of the Ministry of Tourism, Culture and the Arts and progress on the Ministry of Agriculture and Lands and ask leave to sit again.
The Chair: I'd like to wish everyone a happy Easter, including Ione, a regular watcher of this program.
The committee rose at 5:42 p.m.
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