2015 Legislative Session: Fourth Session, 40th Parliament
The following electronic version is for informational purposes only.
The printed version remains the official version.
official report of
Debates of the Legislative Assembly
Tuesday, April 21, 2015
Volume 23, Number 9
ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)
Orders of the Day
Committee of the Whole House
Bill 19 — Civil Resolution Tribunal Amendment Act, 2015 (continued)
Hon. S. Anton
Report and Third Reading of Bills
Bill 19 — Civil Resolution Tribunal Amendment Act, 2015
Committee of the Whole House
Bill 17 — Guide Dog and Service Dog Act
Hon. S. Anton
Reporting of Bills
Bill 17 — Guide Dog and Service Dog Act
Third Reading of Bills
Bill 17 — Guide Dog and Service Dog Act
Second Reading of Bills
Bill 27 — Liquor Control and Licensing Act
Hon. S. Anton
Hon. S. Anton
Bill 22 — Special Wine Store Licence Auction Act
Hon. S. Anton
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Energy and Mines (continued)
Hon. B. Bennett
Estimates: Ministry of Transportation and Infrastructure (continued)
Hon. T. Stone
TUESDAY, APRIL 21, 2015
The House met at 1:33 p.m.
[Madame Speaker in the chair.]
Madame Speaker: Hon. Members, I have the absolute privilege today of welcoming someone back to this chamber who has not been with us in many years, Mr. Bill Chisholm, first elected in 1991, with me, and again elected in 1996. I would ask the House to please make him very, very welcome.
Orders of the Day
Hon. T. Lake: In this House I would call continued committee debate on Bill 19, the Civil Resolution Tribunal Amendment Act, and in Section A, the Douglas Fir Committee Room, continued estimates for the Ministry of Energy and Mines.
Committee of the Whole House
BILL 19 — CIVIL RESOLUTION TRIBUNAL
AMENDMENT ACT, 2015
The House in Committee of the Whole (Section B) on Bill 19; R. Chouhan in the chair.
The committee met at 1:36 p.m.
On section 3.
L. Krog: Referencing in particular that part of section 3 which adds the part 3.6, which enumerates those matters over which the tribunal has jurisdiction over a claim concerning the Strata Property Act, I’m just wondering…. Given that there was consultation with the strata owners associations and various groups related to that, is the government satisfied that the vast majority — or can they even tell me what percentage — of the kinds of claims that have ended up in Supreme Court are going to, in fact, be covered by section 3.6(1)?
In other words, is this going to provide the great benefit to the strata owners, the hundreds of thousands of strata owners in the province, that it is hoped that it will provide, as opposed to those rather more obscure sections covered in section 3.6(2)?
Hon. S. Anton: The direct question was: how many claims from the Supreme Court would go into the tribunal? The answer is: perhaps not many. It is more likely that the tribunal will take claims that actually have not had a good venue to be heard up till now. These are more minor strata disputes that were not well suited to the Supreme Court and consequently didn’t have a forum where they could be heard.
Of course, I think the analysis of the strata corporations and our analysis is that sometimes the failure to have a venue to hear those claims properly meant that in some cases they would be long-standing disputes within a strata. It was not a good situation for the owners or for anyone involved in the particular dispute.
L. Krog: I want to ask a question around the interplay between the Residential Tenancy Act and the claims that will now be adjudicated by the tribunal relating to strata properties.
Is the Attorney General aware, have any concerns or can she offer any comment on the interplay between this legislation as proposed in the use of the civil tribunals and the existing Residential Tenancy Act, in terms of disputes that people may have tried to fit into the residential tenancy branch for resolution when in fact they weren’t really properly there and have been either turned away…?
In other words, what can she tell us about how this has worked out in practice over the last few years, and will this legislation provide some kind of solution? I gather the Attorney General can’t tell me what percentage of claims that were ending up in Supreme Court will, in fact, now be covered by this section. So I’m curious to understand the interplay, again, specifically in relationship to the Residential Tenancy Act and the residential tenancy branch.
Hon. S. Anton: Of course, 3.6(a) says that the tribunal does not have jurisdiction in relation to the Residential Tenancy Act. But I think, if I’m not mistaken, that there was a question as to whether some of these matters would get shoehorned into the residential tenancy branch and now might actually more properly find themselves in the civil resolution tribunal. The answer is: not many — very few. Generally, these are more likely to be claims relating to bylaws and more minor matters which, as I said earlier, did not have a place, a good tribunal for dispute resolution, up until this proposed civil resolution tribunal.
L. Krog: Sub 3.6(1)(a) says “the tribunal has jurisdiction over a claim concerning one or more of the following: (a) the interpretation or application of the Strata Property Act or a regulation, bylaw or rule under that Act.” For practical purposes and subject to the obvious reading of sub (2), which lists the various sections of the Strata Property Act where the tribunal does not have jurisdiction, is, then — how shall I say? — the forum of first resort for interpretation of where the Strata Property Act applies now going to be the tribunal process, as opposed to the Supreme Court?
Hon. S. Anton: I just want to correct something I said a moment ago, a section number. It’s 3.6(3)(a). I think I missed out one of those subsection numbers.
I’m not sure that I have the question right. I think the question was: does 3.6(1)(a) create a fairly broad application of the Strata Property Act into the civil resolution tribunal? The answer would be yes, it does. The object is that for things that, as I said several times, there was not a good venue for hearing those disputes, the civil resolution tribunal will be that venue.
L. Krog: For practical purposes, if I have some intriguing little claim — and I can’t, unfortunately, give the Attorney General an example today — that I think involves the Strata Property Act, then I would go to the tribunal process first in order to receive a ruling, in a sense, potentially, as a facilitation going to the adjudication stage. An adjudication would say, “You know, Mr. Schwartz, your problem belongs in Supreme Court because the act doesn’t apply here,” or that provision of the act falls to the Supreme Court on the basis of the reading of the Civil Resolution Tribunal Act, etc.
In other words, is this the forum of first resort for interpretation, as opposed to me going to Supreme Court and being told by a Supreme Court judge: “Mr. Schwartz, you’ve got to take it into the tribunal process, because that is specifically covered by the tribunal process”?
Hon. S. Anton: I think the question is, for someone who has a claim, whether they might go to Supreme Court or start off in the civil resolution tribunal and how that would look if they started in the civil resolution tribunal. We want people to know early whether or not it’s the right venue. As they go into the software program, the program itself will direct them, telling them either yes or no. They can stay in the civil resolution tribunal or, alternatively, say: “No, you have to go to the Supreme Court.”
If taking them through that front end of the software doesn’t resolve that, then there will be a staff person early on in the process who will be able to tell them: “Yes, we have jurisdiction in the civil resolution tribunal” or “No, you do have to go to the Supreme Court.”
L. Krog: I guess it may be an obscure concern, but we’re asking an awful lot of people who sit on tribunals to perform the same function as has historically been given only to Supreme Court judges.
Imagine for a moment that you receive a decision by way of adjudication under the civil resolution tribunal scheme that says, “Mr. Schwartz” — Mr. Schwartz is going to survive a number of questions — “you go off to Supreme Court.” The Supreme Court hears it, and says, “Sorry, Mr. Schwartz, but frankly, under the statute — and I’m a Supreme Court judge — my interpretation is that you belong back down in the Civil Resolution Tribunal Act.” It seems to me that it raises, just the intellectual concept of that happening, one of the problems that I foresee with the tribunal process.
That is that you will be asking, very specifically by virtue of the wording, individuals who, as the Attorney General indicated yesterday, may well be lawyers but may well not be judges. And because you can’t have access to counsel, people who’ll be making potentially complex arguments around what are, essentially, jurisdictional issues may see themselves, instead of going through a simple system where they trot into the civil resolution tribunal and get their decision and come out, get punted up to Supreme Court and punted back, at great expense, potentially, and a great deal of time-consuming waste.
One of the concerns that this raises — and it’s obvious — is: has anyone in the ministry considered, with this legislation, the possibility that you may require some highly experienced, potentially retired, judges, etc., who are very good at interpreting and deciding whether the act in fact applies to the particular fact pattern? When I’m a claimant, if you will, pitching to the tribunal and saying, “You’ve got to solve the problem for me,” and the tribunal is saying: “No, you go up. You go back down….”
I think the Attorney General can understand the scenario I’m talking about. I’m just wondering, then: are we going to have some specifically well-trained legal people, in other words, to make those kinds of decisions — something that involves, potentially, some serious legal consideration — as opposed to, “How much is the damage from the hot-water tank that broke in the tenant’s suite?” or whatever, or the damaged pot or the noise at night or whether or not you get to use the common property for your Christmas party — all those other kinds of more pedestrian claims?
Hon. S. Anton: A couple of comments on the question. First of all, an initiating party or a responding party can of course consult counsel. It’s not as though they have no access to counsel. They do indeed have access to counsel. It’s just in the hearing, if they get to that point, that they will be representing themselves.
Secondly, the Supreme Court itself does have inherent jurisdiction, so they should not be bouncing any matter back to the civil resolution tribunal. If people have found their way to the Supreme Court, the Supreme Court can hear it.
Thirdly, for most disputes that are before the tribunal, if there’s a jurisdictional issue, it will be a fairly common and clear jurisdictional issue. It’s only if it’s a grey area…. Grey areas are not uncommon. They do happen. All of our tribunals deal with grey areas from time to time. Most tribunals will figure those grey areas out.
Again, in the civil resolution tribunal, if it’s not clear as to jurisdiction, the case manager who sees the file initially can easily refer it to one of the tribunal members them-
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selves. We will have tribunal members who are strata experts and who will be able to make those decisions.
L. Krog: I appreciate the Supreme Court has the inherent jurisdiction. Is the Attorney General saying, for purposes of the record…? Obviously, at some point if this act falls in front of a Supreme Court judge for interpretation, I think it would be helpful for the guides to the courts to know that the presumption behind this legislation is that if it gets to that stage, the poor claimant, whoever that may be, is not going to be punted back to the civil resolution tribunal. They will, in fact, have their day in Supreme Court, instead of having to do a U-ey and head back down the trail.
I think it’s important for the Attorney General to understand the point I’m driving at and that she be prepared to say that that’s the expectation.
Also, it does point out, in her response, one of the problems. When I come back to counsel, you may consult counsel, but instead of having the potential of two lawyers advocating for the position in front of the adjudicator, and giving the adjudicator the benefit of their experience and research and whatever else they will do, the system doesn’t allow for that. In fact, it comes back and is reliant upon the adjudicator having some, I would argue, potentially significant experience.
I want to come back to the main point. Is that the Attorney General’s assertion, then, that if a case such as I’ve indicated occurs, where you’re punted up to the Supreme Court, that in fact the expectation is a judge will hear that rather than punt it down?
Hon. S. Anton: The answer to the question is found in section 49, which we will get to at some point. To read from that section: “If the Supreme Court determines that all matters in a proceeding before it are within the jurisdiction of the civil resolution tribunal, the Supreme Court must dismiss the proceeding unless it is not in the interests of justice and fairness for the civil resolution tribunal to resolve the dispute.” Then there are a number of considerations.
L. Krog: In 3.6(1)(e) and (f) — and I’ll read them out — it refers to: “(e) an action or threatened action by the strata corporation, including the council, in relation to an owner or tenant; (f) a decision of the strata corporation, including the council, in relation to an owner or tenant.”
What’s the difference between the strata corporation and the council? Surely, the council is the strata corporation for practical purposes, and I’m just trying to…. Or is this a reference to a situation where no units have been sold by the strata corporation and, therefore, the strata corporation is the original developer-owner? What’s that making reference to when we talk about “a decision of the strata corporation, including the council”?
Hon. S. Anton: Some things in strata law require all the owners to take a vote, which is the strata corporation. Other matters relate, for example, to the application of a bylaw or the imposition of fines. Those are decisions which may be made by the council rather than the whole of the strata corporation.
Sections 3 and 4 approved.
On section 5.
L. Krog: With respect to section 5, it talks about disclosing a reasonable claim in 6(1)(b). I’m wondering what’s going to determine whether or not a case is reasonable. How’s that going to be decided? Is there any judicial interpretation or some other statute where this has been employed that we can resort to? Do the people understand what may or may not constitute a reasonable claim?
Hon. S. Anton: This is a sort of front-end filter to make sure that the claim does in fact identify an actual claim or an actual issue that needs to be resolved.
L. Krog: Let’s imagine for a moment that Mr. Schwartz has come in. He wants to make his request for resolution. The tribunal has to give him his initiating notice, which is what starts this process. The tribunal says it doesn’t disclose a reasonable claim. What’s Mr. Schwartz’s next step if he believes it does disclose a reasonable claim?
Hon. S. Anton: The goal of the tribunal is to resolve disputes. The goal of it is to provide a forum for people to conveniently go to. The goal is not to push out things unless there really is absolutely no claim at all. Somebody might be sitting down and writing a story of their life.
As long as there is a claim, it is likely to be accepted. The remedy, if there were to be no initiating notice, would be at judicial review.
L. Krog: Just to be clear, then. Mr. Schwartz goes to the tribunal. The tribunal says: “We’re not giving you an initiating notice, because it doesn’t disclose a reasonable claim.” He, potentially, on request, gets written reasons. He’s read the reasons. He’s still not satisfied.
So his only remedy is to seek judicial review. That judicial review, I presume, is in front of the Supreme Court, as opposed to the small claims court?
Hon. S. Anton: As I said a moment ago, the goal of the tribunal is not to push things away but to allow claims in. It would really have to be something that there was no claim or no issue before the tribunal before they were to not give the initiating notice.
There are two ways that a person could proceed if they
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were unhappy with the result. They could go to judicial review. Presumably, they could file an application or a straight-up claim in the Supreme Court, although that doesn’t seem terribly likely. But again, it’s a possibility.
L. Krog: Just to confirm, that application — what I’m getting at — requires it to be put before the Supreme Court, not the small claims court.
Hon. S. Anton: Section 12 adds section 14.1, which is: “A person may not bring a tribunal small claim as a claim in the Provincial Court unless one or more of the following apply.” And there are five sections there. Section (c) says: “the tribunal refuses to resolve the claim.”
I must add to my answer from a moment ago, which is that in the case of a tribunal deciding not to give an initiating notice, that would, we think, form a refusal to resolve the claim. Therefore, it would fit within that 14.1(1)(c).
It seems a little bit unlikely. Again, as I said, the tribunal’s goal is to be a recipient of claims and not to turn things away unnecessarily. The refusal to issue an initiating notice will only be brought where there really is no claim whatsoever to be resolved.
L. Krog: For practical purposes, if you file a claim in the small claims registry…. Right now they perform no adjudicative function at the registry. I file my claim, I serve it on the other side, I go to mediation or a settlement conference, and I end up at a hearing.
If the Attorney General’s interpretation with respect to — and this gets complex — section 12 of the bill, which adds section 14.1, which she has just quoted, and in particular (1)(c), “the tribunal refuses to resolve the claim,” then nobody is going to be in a position to stop me filing in Provincial Court. In other words, the Provincial Court will not be expected to perform any adjudicative function at the filing of that claim.
Making that claim in the Provincial Court small claims division, as opposed to the way this process works, where there is an adjudicative process, essentially, whether we call it that or not, by the staff where they determine when you are trying to get the right to…. When you file your request for resolution, they perform an adjudicative function right then and there, essentially, deciding whether or not they will give the initiating party an initiating notice.
Just to be clear, we’re not going to change the rules in small claims court. So if I’ve had my refusal at the tribunal — and I’m compelled to go there because that’s what the act says — then I’m free to go to small claims court. Nobody in small claims court can raise the issue and say: “You should be back down in the tribunal process because you’ve been refused.”
Therefore, you have only that option. It’s not judicial review, per se. It is essentially proceeding with it in small claims, assuming that small claims appears to have jurisdiction on the face of it.
Hon. S. Anton: The answer to the question is that under that section the Provincial Court would not be bouncing it back to the civil resolution tribunal. But it’s a very hypothetical matter, because we’re talking about a case that, for the civil resolution tribunal, presents no dispute at all. There’s no reasonable claim, so there’s nothing there.
I suppose that matter, theoretically, could be taken to the Provincial Court, and then it would be up to the Provincial Court to decide how to deal with it. But as I said, we’re not anticipating that it would be a terribly common matter.
L. Krog: I’m trying to understand how this process is going to work, because this is a very important section, section 5 of the act, adding these sections about how you initiate a claim.
You send your request for resolution, which is, presumably, going to be a fairly standard form, such as you’d use now in the small claims registry. That’s going to be looked over by what sort of people with what level of training? How fast is that process expected to occur before you are either given the initiating notice, being a requester for a resolution…?
In other words, is it going to be available 24-7? You know, like we talk about…. I can file it at 2 a.m. and if it’s a simple case, am I going to get my initiating notice back within an hour or two? Or are we looking at days?
In other words, how is this process going to roll out in a very practical, easy way? If someone’s listening at home today — and I’m sure there are many — they will be able to understand…?
Hon. S. Anton: Thousands.
L. Krog: “Thousands,” the Attorney General says. I believe her. The thousands listening at home today will be able to say: “Oh, that’s how the process is going to work. This seems really straightforward. This is how long it’s going to take, and this is what it’s going to look like.”
Hon. S. Anton: The goal is that the front-end process will, for the most part, be automated. The initiating notice should be generated simply through the program itself. There’s essentially a very short time period while that’s being issued. There may be some exceptions to that. There will be exceptions for people who file paper initiating a request. There may possibly be some exceptions under the automation piece, in which case it may be a slightly slower process. But the goal is that the whole thing would be fairly quick.
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L. Krog: Just so I’m clear, if this is 2001: A Space Odyssey…. When the minister says it’s going to be automated, does that mean — and I’m trying not to be too obtuse here — literally that there will be a computer program, specially designed software, that will analyze the electronic submission of the person requesting the resolution?
Then that “program,” computer, whatever you want to describe it as being, will literally spit out an initiating notice if it appears to hit the boxes or ring the bells or whatever cliché you may want to use, as opposed to somebody with a pair of human eyes looking at it at their computer and punching back and sending out the initiating notice? In other words, how does this process actually work?
[D. Horne in the chair.]
Hon. S. Anton: The whole process is still in development, so I don’t want to be too definitive on how it will play out. Certainly, the goal is to have the vast majority of the initiated notices generated automatically. There may be exceptions. Certainly, when people file manually, there may be circumstances where human eyes will be looking at it and deciding whether or not to issue the initiating notice.
L. Krog: This reminds me to thank the Attorney General once again, and her staff, for providing a briefing with respect to this bill prior to us getting to committee stage and second reading.
When we talk about the brand-new, purpose-built technology, the concept is literally that the…. It’s small, but nevertheless, the small…. I hesitate to use the term “adjudicative” process, because I don’t want to confuse the facilitation process with the adjudicative process as described in the act. But the decisions that will be made as to whether or not you get your initiating notice are going to be made by a computer program as opposed to a person doing it. That is the concept behind the legislation.
Without wishing to exaggerate, in other words, 2001, HAL, robotics, Brave New World — whatever you want to say — is here. In other words, whether or not I get my initiating process is going to be decided by whether or not I’ve hit the right button, so to speak, when I electronically filed my request for resolution. Am I correct?
Hon. S. Anton: The technology will issue an initiating notice. However, if the technology, for whatever reason, does not issue the initiating notice, it will then be looked at by human eyes. A person, a case manager, will have a look at it and will decide whether or not an initiating notice ought to be issued.
L. Krog: Just to get this straight. Is the Attorney General saying that if anyone submits a request for resolution and if HAL’s, — or whatever the computer’s name is — program doesn’t spit out the initiating notice, at that point it will automatically go to a pair of human eyes? Or will I, as the person submitting the request for resolution, get a notice saying: “The computer has rejected you, but we’re going to now give it a pair of human eyes?” I mean, how is that going to work?
I’m sure the Attorney General can understand my amusement at this concept, that it’s just too…. Having started with fountain pens, it’s almost incomprehensible to me that we will have technology deciding whether or not I get to make a claim against somebody in a process being created by this bill.
Hon. S. Anton: There are many instances in our lives which have moved beyond the fountain pen and which involve filing on-line forms. This is similar to many kinds of things that we do in our daily lives — filling in on-line forms. As long as you fill in the fields and your answers are relatively responsive to what the fields are requesting, the question you’re asking or the form you’re asking for may be received.
That’s exactly the case here. As long as you…. It’ll take you through the process and require you to fill in certain fields. If those are done and done properly, then you will get your initiating notice. If that is not granted to you at that point, a person will look at it and make that decision.
L. Krog: It gives me great comfort to know that at some point some pair of human eyes will actually look at something during the initiating process of this, where a decision, quite literally, has to be made whether or not to give the initiating party an initiating notice.
I take it that this is going to be a request for a proposal. It went to PricewaterhouseCoopers, as I understand it. That was subcontracted to go to a Vancouver-based firm. It’s a cloud-based platform. Can the Attorney General tell the House anything more about the program, how it’s going to work? Who’s going to own it? Is it the provincial government? Does it belong to the manufacturer?
Hon. S. Anton: Remembering that we are dealing with section 5 here, which substitutes a new 6 and 7 in the bill, the answer is that the province will own the software licences.
But Chair, I would suggest we stick to the matter at hand.
L. Krog: I appreciate the Attorney General’s desire to stick to the matter at hand. My job is to inquire as to how this legislation is going to work and what, specifically, this legislation means. How it’s to be delivered I think is perfectly reasonable. I don’t intend to engage in too much of a discussion with the Attorney General on this, but at this point have we even tested this technology?
Hon. S. Anton: The software is currently under development, and the goal for the platform is that it will work for more tribunals than the civil resolution tribunal. This relates to the tribunal transformation work that’s underway as well.
The platform itself is called Salesforce. It’s a customer relationship management platform.
L. Krog: I mean this a bit cheekily. The Attorney General speaks about it with the same confidence that I apparently do about technology, which I find rather terrifying. It’s part of the reason I find this particular aspect of the legislation so difficult and problematic.
It’s not just this civil resolution tribunal. All of the various administrative tribunals are going to end up working with the same basic technology in terms of submitting requests for resolution in the civil resolution tribunal or whatever.
You know, with great respect, given Gordon Campbell’s web portal, given what’s happened with the health records technology and given what’s happened with the Ministry of Children and Families computer program that was supposed to create these wonderful things where anyone could pull up the file and any good social worker could work on it, I must admit the opposition has some obvious concerns about how this technology is actually going to work.
To follow on what the Attorney General has had to say, is the concept that it’s going to be used first in existing administrative tribunals and experimented with there, or is the experiment going to take place in the new civil resolution tribunal?
In other words, is the guinea pig here, or is the guinea pig all the other administrative tribunals that were dealt with under Bill 18?
Hon. S. Anton: There are many tribunals, and it is not necessarily the case that this Salesforce platform will be used for all of them. They will be determined on a case-by-case basis. We will be starting, though, with the civil resolution tribunal. The next anticipated tribunal to use the platform would be the residential tenancy branch.
D. Routley: Has there been a privacy audit done on this system in the conceptual stages?
Hon. S. Anton: The answer to that question is not yet, but we are mindful of our obligations.
D. Routley: Are privacy audits planned in the conceptual and design phases, or will they wait until implementation? I’m asking the question suggesting that the answer should be in the design and conceptual stages since some of the other problems with the integrated case management system have been very difficult to cope with and engineer out of the system after implementation. The advice of the Privacy Commissioner has always been to do privacy audits in the design and conceptual stages.
Hon. S. Anton: There are no privacy audits that we are looking at, at the moment, but we do intend to consult with the Information and Privacy Commissioner as the rules are developed. That was a commitment that has been made for some time now.
D. Routley: Is the system purely a software system? Is it cloud-based? Will information be stored in a cloud-based context?
Hon. S. Anton: Just a reminder that we still are on section 5. The answer is that it is a cloud-based system.
D. Routley: The cloud-based systems may be vulnerable to exposure. There’s a concern that inadequate tokenization of a cloud-based set of data could be subject to re-aggregation and could, in fact, threaten the provisions in FIPPA, the Freedom of Information and Protection of Privacy Act, that forbid the storage of personal information outside of Canada.
Is there anything the minister can offer as reassurance that personal information of British Columbians won’t be vulnerable?
Hon. S. Anton: The application of the Freedom of Information and Protection of Privacy Act is found in the current section 90. Section 37 proposes some minor amendments to section 90, but generally the intent of the section remains the same as it is in the current act.
L. Krog: I appreciate the assistance of my friend who is far more technologically astute than I am and more acquainted with this particular area.
One more question around the issue of the reliance on computers and the Internet. I would be the first to acknowledge that many have access. But what’s the concept for people who don’t have access, who don’t have a home computer and who are seeking resolution of an issue? Are they going to be able to go to a government agent’s office, for instance? Are they going to be able to go to a courthouse, any kind of government office, in order to actually submit their claim, even if it’s via the Internet?
Hon. S. Anton: There will be the opportunity for people to file in other ways — manually, for example. I don’t want to try and define all the ways that that will happen. That’s something the tribunal is working on right now. Most people will initiate the claim by computer but not everyone.
Chair, if I might suggest a ten-minute recess.
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The Chair: The committee will be in recess for ten minutes.
The committee recessed from 3:01 p.m. to 3:13 p.m.
[D. Horne in the chair.]
L. Krog: Is there going to be any provision for those who may lack the appropriate language skills with respect to provision of services to people who do lack language skills or, alternatively, perhaps have some disabilities that prevent them from travelling — something to take into account those kinds of circumstances?
Hon. S. Anton: We are, of course, very aware that there are many people in British Columbia who do not speak English as a first language and, in fact, are challenged by services such as the civil resolution tribunal, which will be dealing in English. We will be encouraging users to seek help and support from their friends and from family. We are considering what kind of services we may offer in other languages and what kind of interpretation services we might be able to offer, but those are not well defined at the moment.
Section 5 approved.
On section 6.
L. Krog: I wonder if the Attorney General can just explain and confirm that the repealing of section 10(2), the amendment, is to take into account that the process will now be mandatory as opposed to voluntary. Is that all we’re talking about here?
Hon. S. Anton: That’s correct.
Section 6 approved.
On section 7.
L. Krog: I wonder, again, if the Attorney General can just confirm section 7’s contents. It talks about when the tribunal may refuse “a claim within its jurisdiction if it considers that any of the following apply.” The reason for it? And is this substantively different from the existing section 11?
Hon. S. Anton: I think the question was: how much of this is new? So (a) is not new; (b) is new language but replaces the “frivolous and vexatious” language with “no reasonable claim;” (c) is the same; (d) is new; (e) and (f) are new.
Section 7 approved.
On section 8.
L. Krog: With respect to section 8, again, can the Attorney General confirm: is this substantively different from section 12 as it exists now?
Hon. S. Anton: The provisions here are new. The proposed former section 12 will be repealed. The new sections 12.1, 12.2 and 12.3 are added.
This allows the Provincial Court to order that the tribunal not adjudicate if it doesn’t have jurisdiction or if it’s not in the interest of justice or fairness, that it not facilitate a settlement in the same conditions, and that the Supreme Court may order that the strata property claim not be resolved in the tribunal if, again, there’s no jurisdiction or if it’s not in the interest of justice or fairness.
L. Krog: Just to come at it from another angle, section 8 — fairly lengthy, adding these three substantive, separate sections — gives the authority to the courts to order the tribunal not to do something. Is there any part of section 8 or anywhere in the act, for that matter, that gives the power to the court to order the tribunal to do something as opposed to not doing something?
Hon. S. Anton: The provisions here are to order that the tribunal not do certain things, and there’s not a provision that a court orders the tribunal to do something.
L. Krog: Given that this is structured in such a way that you start in what I will call the civil resolution tribunal process and then you can get bumped to Provincial Court…. Often with appeal processes, courts have the jurisdiction to order a new trial, for instance, or compel a lower court to do something. Was consideration given to that possibility, given the apparent hierarchy of this process? And, if so, why not include some provision like that in the act that gives them a positive and not simply a negative power, if you will?
Hon. S. Anton: It’s our belief that this is a better system designed this way in that someone with a dispute can take it to the civil resolution tribunal, where they will get more immediate and more accessible justice and resolution of their claim.
There may be people who believe that was not enough for them. We anticipate that most claims will be resolved and finally resolved in the civil resolution tribunal. If necessary, a person will be able to take their claim to a full trial in the Provincial Court with representation by counsel.
The Provincial Court is not set up as an appeal body. We believe it’s a better system to allow the full new trial,
[ Page 7450 ]
if needed, but as I said, we don’t anticipate that there will be a large volume of such cases.
Sections 8 and 9 approved.
On section 10.
L. Krog: Just so I’m clear, if I’m interpreting this correctly, while the tribunal claim is pending, the limitation period is in fact suspended. Is that correct?
Hon. S. Anton: The answer to the question is yes. Once the initiating notice is issued, the limitation period and the ultimate limitation period do not run.
Sections 10 and 11 approved.
On section 12.
L. Krog: It talks about: “the person is in a class of persons exempted by regulation.” In other words, a person may not bring a “small claim as a claim in the Provincial Court” unless one or more are applying.
Can the Attorney General give us some idea of what the anticipated classes of persons are who are going to be exempted by regulation? Does this relate back to what we’ve discussed already? Are we talking about something different? Otherwise, this House is being asked to approve, essentially, a pretty free reign as to who will fall into that class of persons exempted by regulation.
I’m trying to imagine the factual situation or a practical example which might assist in understanding what we’re talking about and why it’s necessary to include this provision.
Hon. S. Anton: This is the piece we were dealing with earlier. We do not have an example of a class of persons that might be exempted by regulation. This was to allow the flexibility that we talked about earlier.
If there is a class of person exempted from the civil resolution tribunal, the member of that class of person will be able to go straight to the Provincial Court.
Sections 12 and 13 approved.
On section 14.
L. Krog: This talks about the facilitated resolution process, facilitated settlement. Perhaps I could just inquire: what’s the difference between a case manager and a designated facilitator? What are the qualifications that a case manager is going to require, and what qualifications will the tribunal members require? In other words, what are these people going to actually look like, and who are they going to be?
Hon. S. Anton: This section deals with case managers. These are people who will be hired by the tribunal itself. They will be merit-based appointments. People will be hired for dispute resolution skills and subject matter expertise, particularly relating to strata. They may or may not be legally trained, but they will definitely be expected to have good dispute resolution skills.
L. Krog: I’m wondering if, for practical purposes, it’s contemplated that these would include people who have now worked in the mediation process and small claims quite successfully. I believe most of them are independent contractors, essentially, working for government. Is that the kind of pool of talent we’d be looking at and using? Some of those people, in my experience, have significant abilities and an understanding of how to resolve matters with parties.
Hon. S. Anton: Those persons mentioned by the member have the kinds of skills that we will be looking for. These persons will be hired through the Public Service Act.
Sections 14 to 17 inclusive approved.
On section 18.
L. Krog: This says: “If a tribunal small claim or strata property claim has not been resolved during the case management phase, the claim is to proceed to resolution by tribunal hearing.” I am just wondering: what if the court orders the tribunal not to facilitate under section 12.2?
Hon. S. Anton: If the court has ordered that it not be in the civil resolution tribunal, it will be in the court, if the court has so ordered.
Section 18 approved.
On section 19.
L. Krog: With respect to section 19, it includes, again, a number of added provisions. In particular, I am looking at sub 30.1(4): “The Provincial Court may consider a determination under subsection (1) (a) to (c) when awarding costs under section 19 [costs] of the Small Claims Act.” Are those the basic costs that are provided for under the Small Claims Act — in other words, the filing fee, etc. — or are there some additional costs contemplated by this?
Hon. S. Anton: If the matter is one which is now before the Provincial Court and the Provincial Court is
[ Page 7451 ]
determining costs, it may look back to the facilitated settlement stage in consideration of its costs that it will award under section 19 in the Small Claims Act.
L. Krog: Given that we’re dealing with a statute that hasn’t been proclaimed yet, and just so I can try and understand this back and forth, under section 19, referring to section 30.2, it says: “On terminating facilitated settlement, the tribunal” — not the small claims court — “may make an order requiring a party to pay another party to the dispute some or all of (a) the fees paid, under this Act by the other party in relation to the dispute, and (b) any other reasonable expenses and charges that the tribunal considers directly relate to the conduct of the proceeding.”
The obvious question is: what does that reference? Does that mean, for instance, that in a matter of some complexity…? I’ve had to consult some, no offence to the Attorney General, high-priced Vancouver firm with some great expertise. I’ve spent a couple of thousand dollars getting a very short letter telling me what I needed to know with respect to this claim. Will that be a reasonable expense and charge that the tribunal considers directly relate to the conduct?
Would it include me travelling some distance? Would it include hotel accommodation if I’ve had to attend in front of a facilitator, etc.? In other words, what’s contemplated by this? My concern is that this provision may, in fact, allow for the imposition of costs on a party greater than presently exists under the Small Claims Act.
Hon. S. Anton: The language in section 30.2(1)(b) reflects the language contained in rule 20(2) of the small claims rules, which allows the small claims court to order other reasonable expenses and charges.
L. Krog: Those, I believe, are awarded in the most remarkable sorts of circumstances. Is the contemplation here that that’s the kind of process? In other words, what do you really have to do to get whacked in the process such that you’d have to pay something beyond the filing fee and the witness fee and things of that nature?
That, if it is substantive, flies in the face of the concept behind small claims, which was that ordinary folks could go in and not risk the cost process in, well, the old days, county and Supreme Court or the Court of Appeal or the Supreme Court of Canada. In other words, it was a place where people could resolve their disputes. That’s the whole drive — this inexpensive process. That’s the drive behind the Civil Resolution Tribunal Amendment Act.
Again, is that what the Attorney General is contemplating? In other words, it’s only going to be the most sort of exceptional circumstances. This will not be commonplace that these kinds of costs would be awarded if, in fact, a facilitated settlement process is terminated.
Hon. S. Anton: It is expected that expenses and charges awarded under section 30.2 would be awarded within the spirit of the act. Certainly, one of the things that might be contemplated is if the proceedings have been frustrated because a person to the dispute failed to comply with the act or they were not acting in good faith. Those are the kinds of things that would be taken into consideration when considering any expenses and charges under that section.
Section 19 approved.
On section 20.
L. Krog: Just to confirm, this removes a couple of existing sections. Is the impact of this…? Does that mean that additional parties to a dispute need not give consent in order to be included?
Hon. S. Anton: Section 20 proposes a change to section 31, which takes out consent requirements as a result of the shift to a mandatory model.
Section 20 approved.
On section 21.
L. Krog: Are there any checks and balances in the case management system that allow for some leniency before refusing to resolve the case?
Hon. S. Anton: Section 21 proposes only a change of language. I can understand that the member opposite may deplore the loss of “frivolous” and “vexatious” and turning to “reasonable likelihood of success,” being a bit of a traditionalist at heart, but that is what we are up to here.
Sections 21 to 23 inclusive approved.
On section 24.
L. Krog: This says that “in the case of a final decision in a tribunal small claim, the tribunal may not make an order under this section unless both of the following apply” — the time for a notice, etc., and no notice of objection has been made. How does this section change the impact of section 48 as it exists now?
[R. Chouhan in the chair.]
Hon. S. Anton: The purpose of this section is to ensure that no enforcement order is made while there is still time for a notice of objection — in other words, within the 28 days mentioned.
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Sections 24 and 25 approved.
On section 26.
L. Krog: Just to confirm, this is the section which essentially means that the decisions of the tribunal, the operational procedures of the tribunal, are not to be reviewed. Is that correct?
Hon. M. Polak: Just for the interest of members, because it wasn’t noted earlier, in Committee A they have now moved on to the estimates for the Ministry of Transportation and Infrastructure.
Hon. S. Anton: The judicial review no longer exists as it was laid out previously in division 4. For a small claims matter, there will be a notice of objection, if necessary, to the decision of the tribunal, which will lead to a new trial in Provincial Court. On a strata matter, the matter can be appealed directly to the Supreme Court.
Section 26 approved.
On section 27.
L. Krog: Now, this is the addition in provisions…. The notice of objection knocks you out of the tribunal process and puts you into small claims essentially. If you do that, then it means that the final decision of the tribunal is not enforceable. Then you’re off to small claims. I suppose one of the questions is….
These are the steps that you could go through to reach a final decision under the tribunal model. First, you’re going to start with the case management mediation processes — no settlement. Then you’re going to move on to a tribunal hearing on the merits of final decision. Then the party files a notice of objection. A certificate is issued. Then you make the deposit application with the Provincial Court, or the application to set aside or reduce the deposit. Then, in some registries, you’re going to go to Provincial Court mediation, or some registries have a mandatory mediation process. Then, arguably, you might end up at a settlement conference or a trial management conference. Then finally, on the seventh step, you’re going to end up at a Provincial Court trial.
Does the Attorney General acknowledge that those are, in fact, all the potential hoops that one will have to jump through, roadblocks — whatever cliché you want to use? Those are the steps that would and could exist under this new process, which is supposed to be simpler, quicker, cheaper and easier.
Hon. S. Anton: We expect that the vast majority of cases will resolve in the tribunal. However, of course, there is a notice of objection — a possibility of going into the Provincial Court. Whether or not all those steps remain necessary at the Provincial Court is not yet resolved, but we will be working with the Provincial Court to determine whether each one of those steps is required. And of course, they are somewhat dependent on which registry you are in.
L. Krog: Well, I’m almost frightened by the prospect that I’ll have to deal with another bill along these lines, involving the small claims court.
That aside for a moment, proposed 56.3 says in sub (2): “The amount a person is required to deposit must not exceed the total of the following: (a) an amount prescribed by regulation that is less than or equal to the amount awarded by the civil resolution tribunal against the person; (b) an amount prescribed by regulation as security for the costs of the other parties.”
I guess, for practical purposes, under the existing proposal you could, in theory, be required to deposit up to $25,000 plus an allowance for costs. Is that a correct interpretation of what the maximum allowable would be, assuming the numbers, as have been indicated by previous answers from the Attorney General, remain the same — small claims jurisdiction presently $25,000? It may get boosted, but for present purposes it’s $25,000.
Hon. S. Anton: The maximum amount of the deposit will be the award granted by the civil resolution tribunal. There is the possibility there for regulation that will allow a lesser amount than was awarded by the civil resolution tribunal.
L. Krog: If the Attorney General can just confirm, that presently could be $25,000? It could be. I’m not saying it is, but it could be $25,000.
Hon. S. Anton: The amount will be the amount limited by the authority to the civil resolution tribunal, so it’s conceivable that one day it could be $25,000. But we are proposing that it will commence at a lesser amount which has not yet been established, as we discussed earlier today.
L. Krog: With respect to the regulatory powers under the act, I take it, then, that the Attorney General is offering as a bit of hope for people who wish to file their notice of objection — or are thinking about what this may look like down the road if they get into the process — that there will be regulation around how much money will be satisfactory for deposit.
Will there be regulation as to how that security is to be held, etc.? Are these things that will be decided by OICs — in other words, cabinet regulation — or will it be decided by the tri-
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bunal itself? I appreciate that it appears there’s not going to be precedent built up. Will it be decided by the tribunals in practice, or will the tribunal issue practice regulations? In other words, who’s going to create the system? And will that system ultimately, as I say, be a creation of…?
Well, this is sort of building on building. Are we contemplating a regulation that will give that authority to the tribunals to decide all those things, or are we contemplating that cabinet will make the regulations which will determine all these things — or some combination thereof? In other words, again, practical question: how is that going to work in terms of setting up this process prescribed by regulation, presumably, that sets up the security for costs?
Hon. S. Anton: It is the court which will be ordering the deposit. There may well be a regulation which determines the maximum amount that the court can require, but it is the court that will actually make the order.
L. Krog: But in fact, the government can, by regulation, prescribe those amounts. The court will decide whether there will be, but it will be cabinet that will decide what the amount will be.
Hon. S. Anton: The regulation will set the maximum amount. The maximum amount could be 100 percent of the award by the tribunal, or it could be 50 percent of the award set by the tribunal. I want to offer a range there because it simply has not been determined yet. Whatever that maximum amount is prescribed by regulation, that’s the maximum the court may require. The court may require something less than that.
L. Krog: We are setting up this security process which is, I think it’s fair to say, without precedent in the small claims process that exists now and that may, in fact, be entirely prohibitive for a person who might have an arguably legitimate legal point to argue. I’m concerned because it’s not as if we have the benefit here of a Supreme Court judge who’s made a decision, and you’re going to the Court of Appeal, and someone is suggesting security be posted for costs or whatever the case may be, where there has been a person with significant training, experience, knowledge, etc.
When the Provincial Court judge is ordering that someone pay this security for costs, then that will be based on a decision, again, by persons who may not have any judicial experience per se, who may or may not be legally trained — presumably are. I think that’s what the Attorney General is hoping or contemplating, but not necessarily so. That strikes me as being a bit of a roadblock, if you will, for obtaining justice, if in fact this becomes the practice of the small claims court fairly regularly.
If they’re taking, so to speak, the policy hint from government, the policy hint is: “We want all of this stuff resolved down in the civil resolution tribunal, and we don’t want it to come up to small claims court anymore. Here’s the policy that will discourage people from filing notices of objection. We’re going to order the maximum amount that the regulation prescribes, which cabinet will determine.”
I’d be interested in just hearing the Attorney General’s comments on the point I’m trying to make around the potential that people will have access, in some respects, to less justice under this proposal than they would under the existing process that takes you through the court system.
Hon. S. Anton: One observation, first of all, which is that under section 8 of the Small Claims Act there is the opportunity to appeal a decision to the British Columbia Supreme Court. In that case, generally you would be required to make a deposit for costs and for the amount of the judgment. So there is some precedent for this kind of scheme.
Secondly, the deposit depends on the circumstances in the civil resolution tribunal. If it’s an adjudicated claim, the Provincial Court may make an order for a deposit as a condition of the new process in the Provincial Court. If the person has not responded in the civil resolution tribunal, the Provincial Court must make an order for a deposit, although even then there is a provision for hardship.
As in all these cases, we do rely on the normal good judgment of the Provincial Court.
L. Krog: Just to confirm my understanding. We’ve got two divisions here under section 27 — the “Objection to Tribunal Small Claim Decision” and then division 6, “Appeal of Strata Property Final Decision.”
In a strata property final decision, which would be made by the tribunal, your next level of appeal is only to the Supreme Court on a question of law. There is no appeal per se to the small claims court. The Attorney General can nod if my understanding is correct. Let the record show the Attorney General nodded.
Well, enough of Wynken, Blynken and Nod. Perhaps we’ll get back to the question.
In this section you can only appeal on a question of law, not a mixed question of law or fact. In other words, the record, so to speak, is what’s going to allow the Supreme Court to deal with this.
I take it, just for practical purposes again, that we will have a written final decision in a strata property claim and that’s the only document, so to speak — in other words, the only evidence, if you will, the only material, that will end up in front of the Supreme Court.
In other words, it’s not like we’re going to be ordering a transcript of what was given in evidence at the tribunal hearing. It will be the decision itself. Am I correct in that?
Hon. S. Anton: This is somewhat a reflection of the current provisions of the Strata Property Act. The Strata
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Property Act does have some arbitration provisions in it. In practice, they are rarely used. If they are used, there is a right of appeal from that arbitration decision on a question of law. So this new provision here is a reflection of that.
As to what the record would consist of, it would consist of the decision and any evidence that was submitted to the tribunal.
L. Krog: I’m going to assume that any evidence that was submitted…. Would that…? Well, is it even contemplated that there would be transcripts taken of the evidence of witnesses? I presume the tribunal process could potentially involve witnesses. Would it include transcripts? Will there even be provision for recording of this, or is that, again, something for contemplation that may or may not be implemented down the road?
Hon. S. Anton: The question, I believe, is whether or not there would be written transcripts of the proceedings at the tribunal.
The tribunal may possibly engage in a number of processes in reaching resolution. It may be by Skype. It may be by e-mail. It may be by a hearing. The purpose here is that the tribunal will have a great deal of flexibility. So the form of the record may vary from one case to another, but it is that record, in the form that it’s in, which may go to the court.
Sections 27 to 30 inclusive approved.
On section 31.
L. Krog: It provides: “If the tribunal cancels under section 37…an order that has been filed under this Part, the party that filed the cancelled order must not take any further steps to enforce that order,” etc.
Can the person…? Can anyone…? Is there a process by which you can object to the cancellation of a final decision or dismissal order under section 36?
Hon. S. Anton: This section is a housekeeping section. The only things that are changing are the section numbers.
Section 31 approved.
On section 32.
L. Krog: These sections, as I understand them, under section 32, and the changes made, essentially give full authority to the tribunal to make rules respecting the form and content of initiating processes and respecting the process to be followed if the court orders the tribunal not to adjudicate, facilitate; authorize the tribunal to make rules respecting reconsideration of an order for payment; make rules respecting the process to be followed and the orders available if the party initiating the process fails to respond.
All of these decisions will not, in fact, be made by cabinet. They will be made by the tribunal or the tribunal chair or the tribunal in conjunction with other tribunals under clusters, or how is this going to work?
Hon. S. Anton: The rules described in section 62 are rules for the tribunal to make, not for cabinet.
Sections 32 to 37 inclusive approved.
On section 38.
L. Krog: Again, and I’m not going to let this pass without comment — another section where we give enormous regulatory power to cabinet once again to deal with a process that’s been established, that was supposed to be established a while ago, that isn’t actually up and running and that we’re now amending with a 50-section bill to make it workable.
I think it’s worth noting for the record, on behalf of the opposition, that this continual referral of so much of what is important in the bill, any bill, to cabinet for regulation later where the public has no ability to scrutinize, criticize or comment on it is a very unhealthy practice. Having said that, I am satisfied that all of the other provisions remaining in the act are consequential, and I’m prepared to suggest that we go: sections 38 to 50.
Sections 38 to 50 inclusive approved.
Hon. S. Anton: I move that the committee rise and report the bill complete without amendment.
The committee rose at 4:39 p.m.
The House resumed; Madame Speaker in the chair.
Third Reading of Bills
BILL 19 — CIVIL RESOLUTION TRIBUNAL
AMENDMENT ACT, 2015
Bill 19, Civil Resolution Tribunal Amendment Act, 2015, reported complete without amendment, read a third time and passed.
Hon. Michelle Stilwell: I call Bill 17, entitled the Guide Dog and Service Dog Act, in committee.
[ Page 7455 ]
Committee of the Whole House
BILL 17 — GUIDE DOG AND
SERVICE DOG ACT
The House in Committee of the Whole (Section B) on Bill 17; R. Chouhan in the chair.
The committee met at 4:43 p.m.
Hon. S. Anton: I’m joined by Toby Louie, the executive director of corporate policy and planning; Judy Klima, director of policy and legislation; and Kristina Ponce, senior policy and legislation analyst.
Section 1 approved.
On section 2.
Hon. S. Anton: I move the amendment to section 2 standing in my name on the orders of the day.
[SECTION 2, by deleting the text shown as struck out and adding the underlined text as shown:
Access to public places
2 (1) A guide dog team, service dog team or dog-in-training team may, in the same manner as would an individual who is not a member of any of those teams, enter and use any place, accommodation, building or conveyance to which the public is invited or has access, provided that the individual who is a member of the team ensures the dog that is a member of the team
(a) does not occupy a seat in a public conveyance or a place where food is served or dispensed to the public, as the case may be, and
(b) is held by a leash or harness.
(2) A person must not
(a) interfere with the exercise of
a privilege underthe right of entry and use specified in subsection (1), or
(b) charge a fee, in respect of the exercise of
a privilege underthe right of entry and use specified in subsection (1), for the dog that is a member of a guide dog team, service dog team or dog-in-training team.]
On the amendment.
M. Farnworth: I see the member wanting to hurry and go “aye.” I’m going to be in agreement with the amendment, but before we get to the vote part, I just want to go over a few things with this, because I do think it’s important. It is one of the concerns that I do have about the bill in the sense of how it got here.
This particular amendment will replace the existing language that was in the bill when the government tabled it. It uses antiquated language — in the original bill, that is. It’s been pointed out that it refers to the right of access to public places for people with disabilities as an “exercise of a privilege.”
People with disabilities have a right to enter a public place. It is not the exercise of a privilege. So I’m a bit puzzled — and perhaps the minister can answer that question — as to how, in this day and age, a piece of legislation arrives here with the use of the term: “it is a privilege and not a right.”
It speaks to, in my mind, a piece of legislation that probably has been sitting around for a long time waiting for the right time to table it, to introduce it to the House, but was done in a rushed manner and really did not go through the proper legislative review to make sure that the language is the appropriate language that should be used today.
Hon. S. Anton: The act itself is a licensing regime, a licensing act, and generally in licensing matters the word “privilege” is used. Technically, the terminology is the same — a “privilege” and a “right.” However, there were concerns that we heard — as, obviously, the member opposite heard — and the view of the stakeholders is that the term “right” is preferable. So we agree, I agree, and so I’m proposing the amendment.
M. Farnworth: I appreciate the answer from the minister. But I think if you ask the general public…. I don’t know. Maybe it is an administrative term, but there is a big difference between a right and a privilege. I think it’s important that that is on the record.
I’m not criticizing the minister, in the sense that I understand why her answer is. A driving licence is a privilege. Being a person with disabilities and being able to enter a place — it’s a right. I fundamentally think that it’s important that we have that on the record. But with that, we can move on to the next section.
Section 2 as amended approved.
On section 3.
M. Farnworth: This is also an area that I would like the minister…. She can probably address the issue that I’m about to raise because it applies to a number of sections in this bill. A lot of this is being done by regulation. So I just want to make sure from the minister what kind of time period she’s looking for in terms of enacting the regulations. How and when are they going to be developed, and what’s the process that’s going to be done? I expect that that would probably be the same for all that in this section. But in this section, in particular, we’re talking about tenancy rights when it comes to guide dogs.
I would just like the minister to clarify exactly what the section is going to accomplish and the types of changes it’s going to accomplish — in particular, the rights of people with disabilities and their service dogs when that service dog is no longer able to provide the function it does as a service dog but has clearly been a part of that individual’s life for a long time. It is not something that is
[ Page 7456 ]
to be discarded — or an individual be forced to move just because that particular dog is no longer able to provide the function it was trained for, and there may well be a new one. If the minister could just explain this, because I think this is also an important section.
Hon. S. Anton: We will be working with stakeholders in development of the regulations. The target is to have them ready by later this year. The significance of section 3 is that it extends the tenancy rights to retired guide and service dog teams.
Section 3 approved.
On section 4.
M. Farnworth: This section deals with false representation. I think all of us share the concern. What we have seen is a proliferation of people who seem to think that, you know, their companion animal is special. And it is special, but if it is not a properly trained and certified guide dog, it is not special to the same degree as a guide dog. That causes problems, particularly in terms of accessing services or, often, sometimes creating issues that reflect on properly trained guide and service dogs, and disputes and problems arise.
The fact that this section is here…. I think we’re all agreed that that is the right thing to do, that people must not falsely represent a dog as being a member of a guide or service dog team, a retired guide or service dog team or a dog-in-training team.
What I’d like the minister to do is to elaborate as to how she sees this section working. What kinds of guidelines are going to be in place? Are there going to be penalties in place? Are there going to be civic remedies in place? If the minister could outline for us those questions, I would appreciate that.
Hon. S. Anton: I think we echo what the member is commenting on, which is that there are certainly many pictures circulating on the Internet of people with dogs being represented as being a member of a guide dog team or some kind of service dog. The goal here is that a dog is properly identified and represented as being exactly what it is — namely, a guide dog or a service dog and part of a team.
In terms of penalties and enforcement…. Number one, education. We have a progressive enforcement. Number one, the goal is education, so that people understand the rights of these teams.
Secondly, it will be a progressive enforcement starting with enforcement officers who are officers under our security programs division. They will have the ability to ticket.
Thirdly, there are offence provisions which can be taken by prosecution if necessary.
M. Farnworth: Let’s just deal with each of them separately. In terms of education, who does the minister see as being responsible for the education? Is it going to be the SPCA? Is it going to be government through a particular ministry? Will that require funding to do that? And where will the funding come from?
Hon. S. Anton: In terms of the education, government will be taking the lead under the Accessibility 2024 initiative. But we will, of course, as in many things, be looking to our partners and stakeholders to help us out. Certainly, guide dog schools have expressed interest in that as well as business groups. There will be plenty of community partners who we will be looking to, to help us out on the education piece.
M. Farnworth: In terms of the funding, then, the government will be committing funding to this initiative.
Hon. S. Anton: We will be doing this within existing resources.
M. Farnworth: Can the minister tell us which ministry’s budget the initiatives, resources, will be coming from?
Hon. S. Anton: I’m going to look around the room to see if there’s another minister who’d like to take this one on. I’m not seeing any nods, so I think it’ll probably be coming out of Justice.
M. Farnworth: Does the minister have an idea as to the size of the budget or the size of the resources required for this initiative?
Hon. S. Anton: We have not targeted an amount at the moment, but we will be working with stakeholders to consider these things.
M. Farnworth: I will take that answer for now, because I’m mindful that we have the estimates process for the Ministry of Justice still to come ahead. I just forewarn the minister that she can expect a question around this, and answers at that time would be appreciated.
The second part of this was that the minister talked about the progressive nature of enforcement and the people who would be able to be doing the enforcement. If the minister could outline how they see that working. I would assume that part of it clearly would be bylaw officers at the local level who would have the ability.
Second, I guess, what provincial officers would the minister anticipate having that authority? Thirdly, would
[ Page 7457 ]
this allow federal authorities, then, to be able to enforce the statute that we’re debating?
The reason I say that is because if you ask many people…. I think one of the areas where you see the most egregious examples of a fake uniform, so to speak, or a fake coat on a guide dog is often in an airport. I myself have been on a flight where I’ve seen a tiny little Pomeranian in an official-looking “service dog–guide dog” regalia, or uniform. I’m not sure what the correct term is for animals, but the minister knows what I’m getting at.
Hon. S. Anton: Cape.
M. Farnworth: Cape. Thank you. You see an animal in an official-looking cape, and it’s being treated quite a bit differently.
Now, it’s one thing for an individual to pay for a seat. Some airlines do allow the travel of companion animals, and that’s fine. But I think it’s entirely different in an airport where you see a dog wearing a cape and it is not a guide or service dog.
If the minister could answer that question as to who will be responsible and who would be doing the enforcement, I’d appreciate that.
Hon. S. Anton: The bylaw officers, no, because those are municipal.
The provincial authority will be inspectors appointed under section 30 of the Security Services Act.
Hon. S. Anton: No for bylaw officers, because those are municipal bylaw officers.
In terms of provincial persons who may issue tickets, they will be inspectors appointed under section 30 of the Security Services Act, or alternatively, they could be peace officers.
In terms of federal enforcement at airports, I think if there was to be enforcement in an airport, that would have to rely on peace officers — RCMP, for example.
M. Farnworth: I’m a little surprised in the sense that one of the ways…. The minister has stated that clearly education is the preferred option, and I would agree with that, that what you want to do is to educate people: “This is the law of the province. This is appropriate behaviour, or this is inappropriate behaviour.” It would strike me that one of the most effective ways to do that is to have the broadest possible ability to, in essence, enforce the provincial laws.
Has any thought been given to working with UBCM or having a common local government policy on this particular issue? It’s one of those things where if the only time you’re going to get a ticket is if an individual empowered under this particular piece of legislation is going to be issuing you the ticket or the warning or the fine or whatever it’s going to be — and at the airport it would be, in essence, an RCMP officer — that’s not going to happen that often.
That’s why I’m wondering if the minister could just elaborate on that. I think in order for this to be really effective, the way that I think it would all be, it would be nice if there was a broader scope of ability to enforce it.
Hon. S. Anton: Bylaw officers are local government, and we’re not contemplating them at the moment.
In terms of the Offence Act, there is a violation ticket administration and fines regulation. We intend to add this act to the provisions of that regulation.
M. Farnworth: Okay. By doing that, what do you accomplish? Does it broaden the pool of people who are able to actually, let’s say, ticket this particular offence — and, if so, by allowing who to make that ticket?
The other question on that is: in terms of people able to ticket the offence, would that include, for example, animal welfare officers or control officers with, let’s say, the BCSPCA?
Hon. S. Anton: In terms of who can issue the tickets, as I mentioned a moment ago, it is under the violation ticket administration and fines regulation of the Offence Act. Item 1(a) is police officer. I think I said peace officer earlier, but I should use the language of the act, which is police officer. The intention is to add this act to their powers of enforcement of a violation ticket. Similarly, this is where the inspectors appointed under section 30 of the Security Services Act are also found.
M. Farnworth: Then it would not include, for example, animal control officers of the BCSPCA, if that’s correct.
Hon. S. Anton: The question is the SPCA’s role in any kind of enforcement. The Prevention of Cruelty to Animals Act, in section 23.1, says: “A person must not do, or attempt to do, any of the following without lawful excuse or authority: (a) harm a service animal; (b) touch, directly or indirectly, a service animal; (c) interfere with or obstruct a service animal.” And the definition of service animal is an animal trained for use “(i) by a person within a prescribed class of persons, or (ii) for prescribed purposes.”
I hope the member is following this logic. The intention is that the prescribed class of persons and prescribed purposes will be defined in regulation to include guide dogs or service dogs. In other words, it will become an offence to harm a guide dog or a service dog or interfere with a guide dog or a service dog, and the enforcement
[ Page 7458 ]
of those provisions will be up to the SPCA under the Prevention of Cruelty to Animals Act.
M. Farnworth: I understand that, and I think that’s great. When the minister makes that statement…. I think the issue in this case isn’t so much the hurting or interfering part, but rather, it’s the false representation part. That’s what I see is the problem. It is that false representation.
When you’re talking about taking that section and saying, “Yes, it will apply,” it applies to…. But that doesn’t mention false representation, and that’s where I think there is a problem here. That is, who is enforcing the false representation?
I think that’s one of the biggest problems that we face, particularly in education. I don’t think it takes a great deal…. I think most people instinctively know that you don’t hurt a guide dog. In fact, you don’t hurt any dog, and the laws are there. But I think one of the reasons this legislation is here is to deal with one of the issues, this phenomenon, this growth of — as we’ve talked about the capes — the false representation of a guide animal.
That’s the part where I’m wondering about who’s doing the enforcement. That’s why I’m concerned. What I’m hearing from the minister is that, yes, the enforcement applies under provincial statutes, and from what I hear from the minister, it is the RCMP who are going to be doing the enforcement.
That’s why I’m asking questions about a broader class of officer — or bylaw officer, if you like, in terms of the provincial level — or the SPCA, in terms of that enforcement when it comes to the false representation of a guide dog and those individuals who put a cape on their animal when it clearly isn’t a guide or service dog.
Hon. S. Anton: The answer is as I gave earlier. It’s the inspectors or police officers. But let me add one thing about the inspectors, which is that they are from the same program which registers and certifies the dogs. The inspectors come out of that program. They will have the body of knowledge needed to do the enforcement as necessary.
M. Farnworth: I don’t want to belabour this section. We’ll be able to move on to other sections. But I do think the minister is going to have a problem with this section in terms of…. If this legislation is to work the way that I think we all would like it to work…. What we have here is a section that in reality and in practice, as opposed to theory, will be rather narrow in its ability to be enforced.
I don’t think, you know, in terms of police officers…. It’s not going to be a high priority in the list of calls that police officers are going to be responding to. I think it may well end up being one of those things that…. Okay, you’ve pulled over a vehicle. You’re writing a ticket. Somebody walks by with a dog that’s clearly…. You go: “Okay, you, I want…. Is that a certified animal? No? Well, here’s a ticket.”
I have a feeling that that’s how this is going to end up being. Likewise, at airports, again, I think it will be more by happenstance as opposed to being on the lookout. That’s why I think that when the minister is looking at the regulations around this, it would be wise for the government to look at expanding and broadening the pool that is able to enforce the legislation.
I think the SPCA is one. I also think, perhaps, talking with the Ministry of Community Development and local government about having a comprehensive policy that applies across the province so that bylaw enforcement officers in communities right across the province…. There is a comprehensive policy that applies to everybody throughout B.C. You have the ability to do the enforcement that’s necessary.
Otherwise, I think the real challenge is going to be that…. You’re going to do an education program, but the reality is if people realize that, okay, yeah, there’s an education program but the consequences of either getting caught or being ticketed, or whatever the progressive enforcement is, are such that it’s rarely going to happen, then it’s much harder to change behaviour. It’s much harder, I think, to get the people who take advantage of these capes and false representation. So I think there’s a real challenge here.
I was just going to say: if the minister could give a response that, yes, these are issues that would be looked at in terms of regulation, I would be happy. I think it’s important because, as I am sure there will be…. The minister is a lawyer and is well aware that if there is a court case or a court challenge, then one of the things that is often important….
A judge will look at: what did the Legislature intend when they made this law? People don’t often realize it, but that’s what, in part 1, the important aspects of this discussion are. What were lawmakers intending? If the minister could give an answer, I would appreciate that.
Hon. S. Anton: We are very committed to making this program work. There’s a lot of interest in it from both sides of the House, which I appreciate. If we need to make adjustments, we will. But as I said, the goal is to start off with education — and enforcement, where needed, through the inspectors and police officers, as I described. If we need to make further adjustments or do more in the future, we will definitely be considering that.
Section 4 approved.
On section 5.
M. Farnworth: This particular section is about certification and how to apply for certification for guide and
[ Page 7459 ]
service dogs. It lists a number of sections: “…in the case of a blind person…in the certificate is a guide dog, and (ii) the blind person and the dog are a guide dog team.”
Another one deals with “the case of a person with a disability, a certificate certifying that (i) the dog identified in the certificate is a service dog, and (ii) the person with a disability and the dog are a service dog team.”
Can the minister just outline how this section is going to work and how those changes will be seen by owners of service dogs and guide dogs? This is an important part of the legislation. Just outline how the certification process is going to work.
Hon. S. Anton: The regime will include the registrar, who will be our government executive director of security programs, a current position. What this will do is create a standard application process for all types of teams to be certified by the registrar, which are active teams, training teams and retired teams. The registrar will be able to determine the form and manner of the application, and the type of information that is needed will be prescribed in the regulations.
M. Farnworth: One of the areas that stakeholders have critiqued about the act is for dog teams and guide dogs from out of British Columbia. I think this is an area that the legislation needs to address. You know, we don’t want to create problems for people who are visiting the province or coming from other provinces that may have their own certification process.
So I’d like to move the following amendment:
[SECTION 5, by adding the following section:
5 (3) A guide dog team or service dog team which have received accreditation from Assistance Dogs International or the International Guide Dog Federation are deemed to be certified for the purposes of the Act.]
On the amendment.
M. Farnworth: I would table this amendment and ask for the…. The reason I submit this amendment is that that way, guide dogs that are internationally certified are able to come to the province and they are deemed by the province to be certified. That’s the nature of the amendment that I am submitting. I hope the minister will accept it, because I think it has the potential to remove possible problem areas that I would rather we deal with now as opposed to down the road in a miscellaneous statutes amendment act.
Hon. S. Anton: My position on the proposed amendment is that it’s not necessary. We are very aware of the issue. We will recognize international schools. The goal is that the registrar will issue a British Columbia certificate, with a very quick turnaround if needed.
If someone is coming from Germany and they have a dog which is recognized by an international school, they can simply send an e-mail to the registrar and the registrar will assess it and issue a certificate where appropriate.
M. Farnworth: Here I was, I guess, being optimistic, and one should never be an optimist sometimes. This is the government that says: “We want to cut red tape.” This is the government that says there’s way too much red tape. This is the government that says: “We’re opposed to red tape. We’ve eliminated all these regulations.” This amendment exactly does just that.
What you’ve just said, Minister, is that if I’m a tourist in Germany or Japan and I have a disability, I’m blind…. You’re now telling me that before I plan my trip to Canada, before I plan my trip to British Columbia, I have to find out whether you’re going to accept my certification that my dog is a legitimate guide animal.
I now have to go find a website. I have to send an e-mail to make sure that this is okay and then wait for that to come back. We all know how slow, sometimes, that can be. “Have I filled the form in right, or have I filled it in incorrectly? You just add one more layer of red tape to my visit.”
“I want to go visit B.C.,” and guess what. “You’re just making my life more difficult,” instead of saying right up front: “You know what? If you’ve got an internationally certified guide dog, you come to Canada and they ask you at the border.” Or you’re in the airport and you’re asked by a police officer, or whoever is doing the certification, and they say, “Oh, sprechen Sie Deutsch?” or “Habla español?” or in whatever your language is: “Is your dog certified?” And you go: “You know what?”
M. Farnworth: Exactly.
“Yes, it is. Here’s the certification right here.” How simple is that? That’s logical, right?
Instead, by doing what you’re proposing, Minister, you’re putting the onus on the person who wants to come and visit British Columbia to check out to make sure ahead of time. Like, why? Why would you do that? Why wouldn’t you just put that up front in the legislation, if that’s what you want to do instead of…? Make it clear right from the outset.
It’s no big deal to amend the legislation just because it’s suggested by the opposition. It shows a willingness on the part of government, that — you know what? — hey, it’s not a bad idea. Minister, I’d be the first one to give you full credit for adopting the amendment. It makes sense. I can see that some of your colleagues back there know it makes sense because they’re smiling in agreement.
The Chair: Member, through the Chair.
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M. Farnworth: …show, confirm with action, that you are the party that you like to think you are when you talk of doing away with red tape, removing barriers. By adopting this very simple amendment, which says…. I’ll read it, just to make sure. “A guide dog team or a service dog team which have received accreditation from Assistance Dogs International or the International Guide Dog Federation are deemed to be certified for the purpose of the Act.”
The people in the guide dog industry — that’s what they would like to see in place. It makes life a little easier for people, whose life is already challenging because they need a service dog in the first place, who want to come and visit British Columbia.
I’d ask the minister to rethink this and look at it from the perspective of the traveller coming here, not from this perspective of how can we make people jump through another hoop.
Hon. S. Anton: Part of this act, an important part of this act, is that we have a standard ID for both the dogs and the handlers. The ID which would come from other countries is not common to the standard ID that we will have in British Columbia. Indeed, there are many forms of identification that come from other countries.
What we would be suggesting is that everyone in British Columbia have a standard ID, but people who come from other places would not have the same standard ID. That would be hard on the dog handler and on businesses.
The advantage of the standard ID is, for example, both the handler and the business that the handler is proposing to go into can be satisfied that this dog team is properly accredited. They can’t be satisfied with that if they’re given something that is unrecognizable because it comes from a different country.
As I said, the goal is to make sure that people coming from other countries can quickly get a British Columbia standardized ID so that they fit in the program. The whole purpose of this act is to create that standard identification.
M. Farnworth: I was going to let this go, but the minister’s answer just contradicted what she said a moment ago, which is…. Okay. It’s Germany because “it’s Germany” was somehow the example that got raised.
You’re sitting in Germany. You’re coming here. The minister said that if you’re, let’s say, in Germany, and you were going to come to Canada, what you’d do is send an e-mail to the ministry. The ministry would send back, saying: “Yeah, it’s okay for you to come here.” But what the minister has just said is that you’ve got different standards in different countries, so how do we know what the standards are, which is why we have to have a common B.C. standard. That is exactly what you just said.
When you have an international accreditation, it should be valid when you come to British Columbia. We have a standard in British Columbia. Ontario could have its own standard as well. It doesn’t even have to be outside of the country. Quebec could have its own standard. When you come here, there should be, in essence, a recognition of the standard that exists in Quebec or a standard that exists in Ontario.
Likewise, the standard that exists, I would imagine, in the case of Germany, of the European Union — it would be a common standard that applies throughout the European Union, for example — that would be recognized here instead of making people jump through a hoop. I think that’s what the government needs to do. That’s what this amendment would accomplish.
I know, unfortunately, that the amendment is going to be voted down. But Minister, I really do think you are creating an unnecessary hurdle when there doesn’t need to be an unnecessary hurdle. It’s one that could be dealt with very simply.
Hon. S. Anton: If I was not clear, let me be clear. The training and the certification of the dog will be done…. The teams that we’re talking about come from the Assistance Dogs International or the International Guide Dog Federation schools. What I’m talking about is not the standard training but the standard identification.
Those dogs will have the standard training and will be perfectly acceptable in British Columbia, but they will have a different form of identification. It is that identification which will be relied upon by both the handler and the business to say that yes, this is a properly accredited team. It is that identification which we will issue in British Columbia on request so that when the team comes to British Columbia, they will have the same standard identification card that every other team in British Columbia uses, offering certainty to both that handler and any business that they propose to go into.
M. Farnworth: But the point is being…. That’s why the experts in the field have said: “Why not do that, and make that clear up front?” This is not just me that’s suggesting this. These are the people in the industry, in the field, themselves, who are saying that this is how the act could be improved. That’s the point.
If you don’t want to listen to me in the opposition, that’s fine. But listen to the people who actually deal with this issue on a day-to-day basis. They’re the ones saying: “Look, if you do it this way, you’re not going to have the problems.” Anyway, I will leave it at that for now.
A. Weaver: I’d like to speak in support of this amendment briefly. The reason why, if I could do that, please, here at committee stage, is that there’s a pattern emerging here in what I’ve noticed in this session particularly — to a lesser extent in the last session.
[ Page 7461 ]
The pattern is emerging where government is bringing forward legislation that it clearly has not had the time to think through. They’re now in a position where they say no to every amendment that’s being put on the table, even though many of them are reasoned and rational, like this amendment here — where the experts in the field recognize that this is creating an unnecessary burden of red tape on groups who will actually get certification elsewhere when there are international standards in place.
We’re seeing a pattern of ill-thought-out legislation, pushing everything to regulation, not listening to opposition when criticisms are actually being raised — legitimate concerns. We just have to witness the LNG tax bill, where these loopholes were brought forward.
Government just blindly moves on without listening to the stakeholders. We look at the liquor pricing — not listening to the stakeholders there. Time after time we get to the same situation where, after the fact, government is looking in the mirror saying: “What did we just do?”
This is a beautiful opportunity for them to listen to a reasoned amendment brought forward by the official opposition on a topic where they have, if government hasn’t, actually consulted the people involved, actually got their insight and input into what is missing in this legislation.
I urge the minister to support this amendment as brought forward by the member from somewhere in Vancouver. I’m sorry. I’ve forgotten, off the top of my head.
Hon. S. Anton: This is a very significantly thought-through act. The extensive consultation with stakeholders…. We are confident that the issue dealt with by the proposed amendment is dealt with in the act and the proposed implementation of the act.
We want to make sure that people who have guide dog teams in British Columbia and are relying on those guide dog teams and their ability to go from place to place with those teams have the standard identification. Otherwise, we are not solving one of the problems that we’re setting out to solve, which is standard identification for teams.
A. Weaver: With respect, a well-thought-out piece of legislation does not bring out an amendment shortly thereafter that corrects archaic language to more modern language. Clearly, as the member for Port Coquitlam pointed out, this seems to be rather hurried. If it were to be well-thought-out legislation, we wouldn’t be discussing these issues. We wouldn’t be amending language that’s a decade — maybe even longer — out of date at this kind of last-minute notice.
With respect, I think, again, that this very fine, very well-thought-out amendment put forward by the opposition should be accepted. It is accepted by the industry involved, by the stakeholders involved. This is yet another example of government marching to the beat of their own drum, not listening to anybody, no advice being given. They know best. But they don’t, and we’ll see it all come, I proffer, down the road again.
[D. Horne in the chair.]
The Chair: The question is the amendment proposed by the member for Port Coquitlam.
Amendment negatived on the following division:
YEAS — 29
NAYS — 40
Sections 5 to 10 inclusive approved.
On section 11.
M. Farnworth: There are a number of areas that I would like to continue to raise questions. I also know that our time is limited, and we are wanting to get some legislation through.
I think we’ve dealt with some of the key issues on here, but I do think there are some issues that the minister does need to look at. I’ll mention them here in the regulatory section because I think that is the appropriate one. When the minister is looking at regulations, I think she may want to look at some of these issues.
[ Page 7462 ]
I do think that we will be back on the issue of accreditation at some point in the future. I’ll be interested to see what happens when someone from another country, let’s say, for example, arrives here with a dog that is certified but didn’t know about our requirements. It is in Cyrillic, for example. Let’s say they come from Bulgaria. How we deal with that I’m going to be really interested in. And I think we will be back.
In the meantime, for people here at home, there are a number of people who live in rural areas or who are on a low income and who have existing animals right now that they class as their guide dog. If they’re not necessarily certified, does the ministry have any plans to sort of transition for people with existing animals or a process by which they can show that they meet certification requirements, as opposed to currently being officially certified, so that when this legislation comes in, we’re able to anticipate that particular issue?
What about people on low income? Is there a program…?
M. Farnworth: I know this is important, and my colleague from Powell River–Sunshine Coast might want to hear this particular part. That is: will there be provisions by the government to take into account the needs of people on low incomes, and issues around service animals?
Hon. S. Anton: The transition provision is in section 12. Dogs that are certified under the current act will be transitioned under the new provisions, and there is no fee for the application.
Sections 11 to 17 inclusive approved.
Hon. S. Anton: I move that the committee rise and report the bill complete with amendment.
The committee rose at 6:03 p.m.
The House resumed; Madame Speaker in the chair.
Reporting of Bills
BILL 17 — GUIDE DOG AND
SERVICE DOG ACT
Bill 17, Guide Dog and Service Dog Act, reported complete with amendment.
Madame Speaker: When shall the bill be read a third time?
Hon. S. Anton: Now, Madame Speaker.
Madame Speaker: By leave?
Hon. S. Anton: By leave, yes.
Third Reading of Bills
BILL 17 — GUIDE DOG AND
SERVICE DOG ACT
Bill 17, Guide Dog and Service Dog Act, read a third time and passed.
Hon. J. Rustad: I call second reading of Bill 27, intituled the Liquor Control and Licensing Act.
Second Reading of Bills
BILL 27 — LIQUOR CONTROL
AND LICENSING ACT
Hon. S. Anton: I move that Bill 27, the Liquor Control and Licensing Act, now be read a second time.
Madame Speaker: Please proceed.
Hon. S. Anton: The liquor policy review is one of the British Columbia government’s most successful public engagements. It made 73 recommendations that are transforming our outdated liquor laws.
This bill involves the full repeal and rewrite of the existing Liquor Control and Licensing Act and creates a more flexible framework to regulate liquor. It also provides authority to implement the remaining liquor policy review recommendations requiring legislative change that were not dealt with through our act amendments in 2014. I will explain each of them briefly.
The legislation will enable government to set the minimum requirements for obtaining a manufacturer’s licence after consultations with industry on the matter, streamline the liquor licence application process, enable local governments and First Nations to determine their criteria for providing input on licence applications, allow local governments to delegate authority to staff to make recommendation on liquor licence applications without the need for a council resolution, create an annual licence for non-profit groups holding meetings throughout the year, enable promoters or event organizers to apply for special occasion licences, enable businesses to obtain
[ Page 7463 ]
special occasion licences to raise funds for charity, allow government to repeal the liquor-primary club designation if consultations support that recommendation, create authority for government to regulate home delivery and streamline shareholder reporting requirements.
The proposed legislation will also address a number of other issues, including updating eligibility requirements such as removing residency requirements, ensuring more flexible oversight of charitable auction and ethyl alcohol permits, modernizing liquor advertising restrictions, clarifying when police are authorized to conduct searches related to liquor offences and preventing concerns about community impact by requiring the general manager to cancel dormant licences.
D. Eby: It’s a pleasure to rise and speak to Bill 27, the Liquor Control and Licensing Act.
I’ve been through the bill. The minister was kind enough to provide her staff to go through and do a briefing on this bill. The government is well aware of where our side stands on the way they’ve handled this file, the chaos they’ve caused in the industry, the damage they’ve caused to small businesses across the province.
You read this bill, hon. Speaker, and there’s nothing offensive that anyone can find on the face. It’s regulation-making power throughout. That’s where this government has created all the mischief today, in the regulations.
I look forward to canvassing some specific issues with the minister at the committee stage, but at this stage I’ll just confine my remarks to the fact that this is a long overdue revisiting of B.C.’s liquor laws. Clearly, the government is reserving a significant amount of power for itself in the regulations, where we’ll be watching very carefully, given their conduct to date and the damage that they’ve caused to the industry.
Madame Speaker: Seeing no further speakers, the minister closes debate.
Hon. S. Anton: Well, it was a very interesting comment. It’s too bad the member opposite didn’t listen to his colleague the member for Vancouver-Hastings, who said: “Well, that was a non-event.” That non-event meant that the day between March 31 and April 1, when we made rather significant changes, went extremely smoothly.
It was a compliment to all the hard work of people involved in changing technology, changing labels, working so hard all night long that night, working so hard all the months leading up to that. It was a remarkable transformation. It was a remarkable piece of work. I really appreciated the comment. The member for Vancouver-Hastings said: “What was all the fuss about?” Too bad the other member, for Vancouver–Point Grey, didn’t listen to him.
I appreciate the fact that he realizes the good job that government has done in the changes to the liquor regime in British Columbia, to the remarkable changes it has made to people’s enjoyment of liquor, to the help that it’s given to the industry and to the changes to level the playing field for all vendors in British Columbia.
These proposed changes to the Liquor Control and Licensing Act allow us to continue with that and, as I said earlier, modernize our liquor legislation in British Columbia. I will look forward to the committee debate.
Hon. S. Anton: I move that Bill 27 be referred to a Committee of the Whole House to be considered at the next sitting after today.
Bill 27, Liquor Control and Licensing Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. J. Rustad: I call second reading of Bill 22, intituled Special Wine Store Licence Auction Act.
BILL 22 — SPECIAL WINE STORE
LICENCE AUCTION ACT
Hon. S. Anton: I move that Bill 22 now be read a second time.
We are proposing to issue a limited number of liquor licences to sell 100 percent B.C. wines from grocery store shelves. We know that there’s a strong interest in these licences. With the limited number of licences available, the proposed auction will ensure an awarding mechanism that is fair and transparent to industry and taxpayers alike. The auction will limit applicants for this licence to the successful bidders and raise additional revenue for government.
To be clear, we are not selling liquor licences. We are auctioning the right to apply for a licence. In the interest of fairness and transparency, the bill sets out how the auction will be conducted, who can bid and the type of licence a successful bidder may apply for. These new licences cannot be issued without legislative authority since the sums raised through the auction process are considered a direct tax. After the auction successful bidders will proceed through the licence application process normally.
D. Eby: In contrast to my remarks on the last bill, I’m going to be more detailed in my remarks on this bill. This is a bill that is so offensive and so boldly hypocritical, it’s hard to know where to begin with it.
Let’s be really, really clear about what this bill does. It introduces an indeterminate number. You heard very clearly the minister said a limited number. What is that? We don’t know. It’s an indeterminate number of new, special liquor retail licences with special powers and benefits only available to grocery stores. But not just any grocery
[ Page 7464 ]
store — only to the deepest-pocketed, biggest corporate grocery store chains in the province.
Now, I asked the minister’s staff during the briefing how many licences would be issued under this legislation. They could not answer the question, saying more policy work needed to be done. This is the bill that the government presents to us today and expects us to stand and support.
The licences created by this bill enable the new licence holders to buy alcohol at reduced rates, not to pay for the alcohol until a customer buys it and exempts the holder from the requirement not to locate within one kilometre of an existing store. In other words, a competitor that gets product cheaper can order it without paying for it until it sells, can use this licence to sell alcohol right next door to an existing public or private liquor store, thanks to the minister’s bill. This is the bill that the minister presents to us today and expects us to stand and support.
This bill creates two tiers of retailers: one with every advantage, which can locate their stores anywhere in the province; and the second tier, which pays more for their product, pays up front and is subject to strict location rules.
Even worse, not only is this government punishing small business by creating a tilted playing field in favour of new licence holders created by this bill, but only the biggest grocery store chains with the deepest pockets will be able to participate in the proposed method of distributing these very, very special licences, because they will be sold at auction at prices that are well beyond the reach of family and independent grocery stores. Family and independent grocers need not apply. This is the bill that the government presents to us today and expects us to stand and support.
With the introduction of this bill, the minister has violated several commitments she made to independent and family grocery stores, private and public liquor stores and their employees and the liquor industry as a whole — not once, not twice but dozens of times in this House and in the media. These were commitments she made not two years ago, not one year ago but in one case just 15 days before she introduced this bill in the House.
That means that the legislation introducing these new very special licences, introduced in this House on March 26, was being written and finalized by the minister at the exact same time the minister was promising a level playing field and no new liquor locations in the province. This is the bill she presents to us today and expects us to stand and support.
The gap between what the minister said just weeks ago and the bill she’s introduced in this House leaves just three possibilities. The first is that the minister doesn’t understand the bill. The second is that the minister had no involvement in the drafting of this bill, and nobody told her about it until two weeks before it was introduced. The third is that the minister simply doesn’t care what she says to industry in this House or in the media. All of these possibilities are equally troubling. The gaps between what the minister has promised and what this bill does are significant and will hurt small business across the province.
This minister promised existing liquor retail licence holders that there would not be any more locations selling alcohol in this province and that they would have the ability to move into grocery stores with their existing licences. She even set up a lottery to see who would get to move their licence into a grocery store first. This bill breaks that promise.
The minister promised that her reforms would create a level playing field, that all of the industry would be dealing with the same wholesale prices and the same rules. The competition would be fierce but fair. This bill breaks that promise.
The minister even promised that the one-kilometre rule would be enforced, protecting existing licence holders and public stores from competition right next door. This promise of hers is broken by this bill, too.
It is truly remarkable that this minister has broken almost as many promises as she’s made to industry and to the public by the introduction of one bill with 20 sections. Saying one thing and doing another may be a habit of this government, but the minister has raised that to a whole new level with this bill.
Let’s start by examining the minister’s promise of a playing field for liquor retailers in B.C. If this minister promised the retail liquor industry in B.C. just one thing, it was that she would be creating a so-called level playing field for all retailers so that all retailers could compete fairly, head-to-head. This bill eviscerates any promise of a level playing field on several levels.
It creates a new set of licences with profound advantages for corporate grocery store chains that can afford to buy them at auction. This is the Special Wine Store Licence Auction Act, and these licences are special indeed. I’ve already talked about how there’s no level playing field between grocery stores. These licences will only be available to the biggest, richest corporate chains. Family and independent stores are out of luck.
The licences this bill creates also make a cruel joke of the minister’s repeated promises that she is creating a level playing field for the public and private retailers in the province. The special privileges this bill provides to the deep-pocketed, big corporate grocery store chains that can afford the huge price tags that these licences will attract include some remarkable privileges indeed.
A holder of these licences will be able to purchase B.C. wine and cider at a cheaper price than any other retailer in the province, except for VQA licences held by wineries in the B.C. Wine Institute.
Expert wine lawyer Mark Hicken told the Vancouver Sun on March 26, 2015: “The discount model the VQA stores operate under is a 30 percent discount; 26 percent goes to the operator of the store, and 4 percent goes to the Wine Institute.” He explained that grocery stores that hold these VQA licences, and the licences that are issued
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under this bill, will enjoy this discount.
I have the e-mail sent by the B.C. Wine Institute to existing VQA licence holders dated March 5, 2015, that says, unambiguously: “B.C. VQA store licence agreements remain in place, including the discount model.” What great news for B.C.’s biggest and richest corporate grocery stores. They’ll get their products cheaper than anybody else. This is this minister’s level playing field.
It’s worth going through how many times this minister promised a level playing field in this House and elsewhere. March 5, 2015, 21 days before this bill was introduced, in question period:
“The question of wholesale price, of course, relates to the issue of a level playing field. There’s been extensive consultation with industry, webinars put on by our staff. People understand the concept now for the first of April, and it’s a good system that levels the playing field for everyone.”
“As I mentioned, we have been in very close contact working with the industry both on the retail…and on different forms of retail. We are working closely with the industry….
“They’ve asked for a level playing field. This is the level playing field, along with all the other changes that we are making to the liquor industry in British Columbia to support consumers, to support producers….”
Another quote the same day:
“These come out of a very extensive policy review. They come out of very extensive consultations — the desire for a level playing field in British Columbia. These are very good changes indeed.”
March 10, 2015 — 16 days before this bill was introduced, question period:
“One of the strong pieces that came out of that was the desire of industry, of retailers, for a level playing field. That is what we are doing with the new wholesale pricing, which will come into effect on the first of April….
“We are committed to a level playing field. That’s where we’re going on April 1….
“This is a level playing field. It comes into force with all the other changes that government is making, some starting on April 1 and many of which are implemented already.”
March 11, 2015 — 15 days before this bill was introduced, just two weeks before she stood in the House and introduced this bill in question period:
“Let me remind the member opposite that this is a wholesale price. Everybody is paying the same wholesale price. No more discounts.”
“That is the scheme starting on April 1. Everybody will pay that price — the rural agency stores, the government stores, the private stores, the wine stores. That is what a wholesale price is. Everyone pays the same price. Level playing field, starting on April 1.”
“This is the change that’s happening on April 1. It’s a change welcomed by industry. It’s the level playing field that people have been asking for, for many years. It joins all the many other changes we’ve been making in liquor policy review, and they are good changes.”
“What we have done, Madame Speaker, is change the whole system so that it is a single wholesale price that purchasers, that retailers, will be paying…This is the level playing field that we are embarking upon on April 1.”
This is not a level playing field. The minister also promised there would not be an increase in the number of liquor outlets in B.C. She promised this just 37 days before this bill was introduced.
Now, there are two reasons why it’s not necessarily in the public interest to increase the number of liquor outlets in the province. The first is a business concern for existing public and private businesses. Many private business owners rely on a predictable value for their licence to borrow money from the bank to expand their business or to bring in new stock. This bill creates great uncertainty about the value of existing licences in the province.
How much less are they worth? Banks aren’t sure. I’ve already been contacted by several independent liquor stores unable to borrow because banks and credit unions are troubled by the uncertain value of these businesses, given the minister’s reforms.
It looks like the bankers were right to look at the minister’s promises critically. Even though the minister promised certainty to the sector with no new locations, she has completely undermined that promise.
We won’t hear from public store managers or the B.C. government stores CEO about what the minister promised them, but surely it was the same thing. Business plans were made on both the private and the public side, based on what the minister said, and perhaps even agreements-in-principle with grocery stores for moving into those stores that have now been completely undermined by the promise of an unclear number of new licences with special powers.
A private store owner wrote to me expressing concern: “As private owners, we have a right to know how many of these licences are being ‘created’ and sold. We also have a right to know who is bidding and where they want to locate. It would directly impact our business, so we have a right to know.”
The minister makes an announcement of no new locations for liquor retail in the province, a promise that public and private business and employees should reasonably be able to rely on in making plans. And within 37 days, she has already contradicted it with this bill. She won’t even say how many new licences she’s issuing under this legislation.
How could any business operate in that uncertain legislative environment? I’m told investment in private stores is at a standstill as they await the latest bombshell from the minister’s office. I have no idea what the impact of the minister’s constant policy reversals have been on plans made on the public side, but I can’t imagine they’re more positive.
In fact, redrawing plans made on the minister’s reversals, on that side, are even more problematic because that is public money being spent to react to reversals made on the fly.
There’s also an important public health argument to be made against additional liquor outlets, increasing access to alcohol in the province. Easier access to alcohol through increased locations increases the possibility
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of the purchase and consumption of alcohol, which increases alcohol-related harms that cost the public purse.
I don’t recall that British Columbians asked for the moratorium on new locations to be lifted in the consultation. I am certain that public health officers and organizations didn’t ask for it either.
You know, I think it’s important to point out why I keep saying that the minister reversed herself with the introduction of this bill and why I believe that she has created such uncertainty in the industry and, surely, concern among public health officials.
So 37 days before this bill was introduced — February 17, 2015 — in the Vancouver Sun: “We are not increasing the number of liquor outlets in B.C., so anybody who has a licence is in pretty good shape.” And 35 days before this bill was introduced in this House, the minister rose and said: “A change that is not coming is the number of liquor outlets. We have the moratorium until 2022.”
It would be hard for the minister to be clearer, and it would be harder for her unambiguous statement to be more incorrect, given the bill that she has stood in this House 35 days later and introduced — astounding.
Noting the hour, I move adjournment of the debate to the next sitting of the House and reserve my right to speak to it.
D. Eby moved adjournment of debate.
Committee of Supply (Section A), having reported resolution and progress, was granted leave to sit again.
Hon. J. Rustad moved adjournment of the House.
Madame Speaker: This House, at its rising, stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 6:27 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF
ENERGY AND MINES
The House in Committee of Supply (Section A); D. McRae in the chair.
The committee met at 1:36 p.m.
On Vote 20: ministry operations, $25,524,000 (continued).
A. Dix: We were talking before the lights went on. We were talking to the minister: “Why don’t we do it now?” We were talking about a question I asked yesterday, with respect to asset sales.
The government and B.C. Hydro, to meet its rate obligations, were proposing some asset sales in the ten-year plan. I was asking the minister how that was going, and he was about to tell me how it was going.
Hon. B. Bennett: Swimmingly, as it turns out, very well. I’ll give the member some detail.
A little bit of historical context here. Between, let’s say, the mid-’80s and early 2000s — there were about 1,100 properties sold. I’ll give you the numbers: $320 million. A majority of those properties were high-value, market-ready properties.
Of course, the majority of properties that were left over after that program ended, around the year 2000, were a bit more challenging. There was, in some cases, infrastructure located on the property, and some cases required environmental cleanup and that sort of thing.
Between 2003 and 2013 property sales slowed down. There were less than 100 sales during that ten-year period — approximately $36½ million in revenue. That’s the historical context.
During the ten-year rates plan phase, which the member has asked about, there’s an assumption that $50 million in property sale revenue will come in over five years, between fiscal ’15 and fiscal ’19. So far, there are four properties sold, generating $3 million in revenue. There are four years left to reach the target, obviously.
There are an additional 34 properties identified for sale, with roughly an $87 million value on the books. Some of these properties are high value, and some of them are not, of the $87 million that are left. And $67 million of the $87 million includes properties that are not up for sale right now, to allow a better approach to notification of First Nations. The Tsilhqot’in decision is causing Hydro to take a step back from the divestiture of some of those pieces of property. And $19 million, representing seven properties, are expected to go to market in fiscal 2016.
Sales to date. One sale was simply based on an original purchase agreement where the seller had the option to purchase the property back, and they did that.
Three were sold on the basis of market value appraisals. I don’t know how much detail that the member wants, but it will be in Hansard. Duke Point, the sale price was $1,421,750. Madison One in Burnaby was a sale price of $1,429,000. Vedder road in Abbotsford, the sale price was $95,000. And Kalamalka Lake Road in Vernon, the sale price was $138,000.
Each of those properties, the last three that I men-
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tioned, were sold for as much as the appraised value or, in some cases, more. The first property, the Duke Point property, was the one that was a buyback clause that the vendor had on it.
Independent appraisals are done by certified appraisers for each property to determine market value. The processes used to dispose of surplus properties include competitive marketing of the property to the public, listing on MLS and, in some cases, direct sales.
The good news, I guess, is that…. The bad news might be that the five-year program is a little slow in getting started, probably because of the nature of the properties that are available for sale and, to some extent, perhaps due to this Tsilhqot’in case and Hydro needing to take more time with First Nations consultations. But, you know, the good news is there are another four years to achieve the goal, and the even better news is that those properties that have been sold have been sold for at least the appraised value and, in a couple of cases, considerably more than the appraised value.
A. Dix: The other bad news, of course, is that you can’t sell the properties in the next five years. Their impacts on rates will be in the next five years, and you’d have to, presumably, find the money elsewhere in future, unless you kept selling properties indefinitely. But presumably, there’s not an infinite amount of property for B.C. Hydro to sell.
A. Dix: The amount in the budget. My point is simply that you’re meeting your target by selling one-time sale property, so the bad news is you can’t sell it again, and in five years you have to make up that amount.
A. Dix: Well, the nature of rate increases changed so dramatically before and after the election by the government that I think having the minister speculate on year six of the ten-year plan is a little bit surprising. In any event, well, it’s mostly sore for British Columbians who have to pay it.
We’re going to return a little bit to Site C. A couple of my colleagues would like to ask some questions of the minister on this as well, which we’ll go through now.
I think, as we went through the IT projects — we’re still, as you know, waiting for an answer on one of them there — those projects generally did not have their business cases approved by the BCUC. Whether it is a consequence of that, it is also a fact, in any event — without suggesting that, had Hydro had to prove its case, they might have made better decisions in the case of SAP; three of six projects completed and most of the money spent…. Not going to the BCUC in that case, as in the case of the 2009 Clean Call, the Clean Energy Act…. We ended up purchasing enormous amounts of energy based on a self-sufficiency target that the government doesn’t even believe any more and is costing Hydro ratepayers in the hundreds of millions if not billions of dollars in the next few years.
These were decisions, of course, that the government exempted itself from the BCUC. They exempted themselves from the northwest transmission line decision. They exempted themselves on smart metres, and many benefits apparently associated with smart metres didn’t prove to happen.
So this has been a process of exemption, either by not submitting projects that ought to have been submitted, in my view, or alternatively, exempting themselves at the cabinet table from decisions which, I think the minister might fairly say, were made at the cabinet table and imposed on B.C. Hydro, and therefore, he might argue that that is an appropriate level of responsibility.
In any event, in the case of Site C, the government, contrary to the recommendation of Mr. Swain and others, has decided not to submit the Site C proposal to the regulator — to exempt itself again.
I guess the question I have for the minister…. This would give him an opportunity to wax eloquent on this question, no doubt. Given this repeated record of exemption and avoidance and not success, is this not an unwise path to follow?
Hon. B. Bennett: Well, it’s a path that, in fact, various B.C. governments have followed since the BCUC was created. For example, in 1998 the government that the current critic used to advise introduced a miscellaneous statutes amendment act — for all I know, he may have helped write it — that provided a process for exempting new power supply contracts from a certificate of public convenience and necessity by ministerial order.
Apparently, the member thought that it was fine then. The current member for Port Coquitlam….
A. Dix: The Liberals were against Site C then.
Hon. B. Bennett: Whether the NDP is against or for Site C is anybody’s best guess, given the statements on the record from the leader, which I’d be happy to read out. It’s quite a…. You hurt your neck. You feel like a weather vane just listening to him go back and forth on whether he’s in favour of it or not.
In any case, the member for Port Coquitlam at the time was the minister, and in 1998 this is what he had to say about the kinds of exemptions that the member has introduced into estimates here today. “In terms of a public policy issue, the decision on whether or not to go through and approve cogeneration plants, for example, is the purview of the province.” Very, very similar to what I
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have said all along over the past couple of years.
I’ll continue on, though, because the member was quite eloquent back in July of 1998. He said: “The question is: do you go through this one big environmental assessment process, come out of that and suddenly go to another process, when the issue of the Utilities Commission should really be the rates and rate structure?” “It’s a question of eliminating red tape,” the member said at that time.
Apparently, when the NDP was in government, they saw it the same way, or similarly at least, to the way the B.C. Liberal government sees it.
More to the point and up to the current project that we’re discussing — Site C — B.C. Hydro has spent three decades studying this project. Over the last seven years — extensive fieldwork, extensive engineering studies that have informed the project cost estimate.
We believe and we know that time will be the measurement of this. Time will tell. But we believe that after all of the due diligence done by Hydro, KPMG and the independent contractors panel, and by the Ministry of Finance and Treasury Board, the cost estimate in front of the public today for the Site C project is reliable. It’s robust. It includes construction and development costs. It includes inflation. It includes interest during construction. It includes mitigation costs, community benefits, First Nations accommodations and contingencies.
At the end of the day, when the initial budget generated by B.C. Hydro, in fact, could not be undermined by all of that rigorous scrutiny, government, out of an abundance of caution, decided that it would add a $440 million project reserve, which I believe was the prudent thing to do. Hydro will not be able to access that $440 million unless they come back to Treasury Board and have a good reason for needing it.
I agree with the member for Port Coquitlam that sometimes duly elected governments need to make the big decisions. When it comes to energy policy, deciding on how you’re going to acquire the 1,100 megawatts that our economy is going to need, and deciding that the best way to acquire that new electricity is through the Site C project — I hope I have an opportunity to talk about why Site C was the right decision — is the kind of big provincial decision that will impact the province for a century, that the duly elected people need to be accountable for.
We will be accountable for it. It is the right decision. There was, after all of the due diligence done by all of the various levels of scrutiny that I named, no value to be obtained from sending the project to the BCUC. That is our position. It’s been our position, our belief, for several years, and we continue to stand behind that.
The Chair: Before the member for Vancouver-Fairview speaks, I’d like to remind all members to address their questions and answers through the Chair.
G. Heyman: Thank you, Chair. I’m happy to address my questions through you to the minister.
I’ll just preface my remarks by saying that I find it interesting but not particularly instructive to have, in the two years I’ve been here, any number of questions that have been asked about current policy answered with a reference to events of anywhere from 17 to 22 years ago.
Let’s just look at the record of the Liberal government since the Clean Energy Act was introduced in 2010. So $12 billion worth of projects have been exempted from review by the B.C. Utilities Commission, and the largest of these is the Site C project.
I heard the minister say that it’s the responsibility of elected people to make big decisions like Site C and to be accountable for them. I don’t disagree with that, with the proviso that it’s easier for the public to hold governments to account when they have the benefit of reviews by bodies like the B.C. Utilities Commission, and that’s, in fact, a position that was taken by the joint review panel and the chair of the joint review panel.
I listened yesterday with interest as the minister said on more than one occasion that the reason his government didn’t believe in project labour agreements or enforcing them on the Site C project was because Hydro and the minister and the government had a responsibility to ratepayers to keep costs down and ensure that rates were kept down.
Within that context, let me draw to the minister’s attention and to your attention, hon. Chair, some comments from the chair of the joint review panel. He repeated that notwithstanding the fact that the joint review panel understood the government’s position that the project should be exempt from BCUC oversight, they believed that was bad policy, and they once again brought it to the government’s attention that that should not be the case and that they should refer the project.
But further to that, we have as context that in the ten months since the joint review panel issued the report, project cost estimates have risen by about 12 percent — close to $1 billion — at a time when B.C. Hydro ratepayers already face a 28 percent increase over five years. So on the one hand, we hear the minister as part of these discussions in Committee of Supply saying that it’s his responsibility to protect ratepayers. On the other hand, we have rising costs for a project that doesn’t even have a shovel in the ground yet, coupled with rate increases.
Mr. Swain went on to say in an interview recently: “There’s a whole bunch of unanswered questions, some of which would be markedly advanced by waiting three or four years. And you’d still be within the period of time, even by Hydro’s bullish forecast, when you’re going to need the juice.”
He went on to say, and the report said, that Hydro had not fully demonstrated the need for the project on the timetable set forth. And then he said in his interview: “Wisdom would have been waiting for two, three or four
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years to see whether the projections they were making had any basis in fact. They would have been able to make a better-informed decision and not necessarily a more expensive one.”
Now, I know the minister disagrees with that position. I know he disagreed with the joint review panel report, but the fact remains that even by the panel report, the project is expected to lose, once it finally enters operation, $200 million a year for the first four years because the power isn’t needed. So it seems to me that it makes sense to take the opportunity of not being in a rush, to review the project, review it through the BCUC and ensure that it meets the best interests of ratepayers and taxpayers.
My question to the minister is: what’s the rush to build capacity that B.C. Hydro itself says won’t be needed for years after construction is complete and is going to operate at a $200 million a year loss? If the minister truly believes that this project is in the best interests of British Columbians, why will he not let the B.C. Utilities Commission review it so British Columbians can make their minds up, based on an independent review?
Hon. B. Bennett: Well, there are various responses to this. I’m going to provide all of the things that I think should be said in response to the questions.
First of all, if the member takes the time to look through the documentation provided by B.C. Hydro around the Site C project, he’ll find that capacity is actually needed in 2019. The project won’t even be built in time to provide the capacity that the demand forecast indicates will be required at that time. Energy is needed in 2024, so he’s wrong to suggest that we could just wait for a few years to start on the project.
The member quoted the chair of the joint panel. Most of the quotations were from news clips, not from what the panel actually said, although there were a couple of quotations that were from the joint panel report. I’d like to quote, and I’m not going to quote from a newspaper. I’m going to quote from what the report actually said, chaired by Mr. Swain.
They said: “Site C would be the least expensive of the alternatives, and its cost advantages would increase with the passing decades as inflation makes alternatives more costly.” The panel said that Site C would provide the cheapest electricity. The panel also said that a few decades hence, when inflation has “worked its eroding way on cost,” Site C would appear as “a wonderful gift from the ancestors of that future society, just as B.C. consumers today thank the dam builders of the 1960s.”
The project will last for over 100 years. The estimate is there will be a few years in the beginning where there might be a temporary net loss. That depends on how the demand forecast actually works out. There are a lot of moving pieces with that. What the panel said, and what we all know to be true, is that over the lifetime of this project, B.C. people will benefit decade after decade after decade from clean, green, cheap electricity.
I want to give you a couple other quotes from the joint review panel. “The project would expect to result in a small increase to rates, compared to alternatives, for the first five years of operation” — that’s what they said — “after which rates would be lower for the rest of its operating life.” Over 100 years.
That’s one of the main reasons why government made the decision. It’s the right decision. The NDP knows it’s the right decision, as much as they would like to play politics with it.
The panel concludes that the risk of Site C to the province’s debt management plan is “entirely manageable by a prudent B.C. government.” Another quote, and I really like this one. “There is little doubt about the competence of B.C. Hydro to build and operate the project efficiently.” I’ve got quotes from the joint review panel that would allow me to go on for days here, if I had the opportunity — I think days, not even hours.
The member suggested that the increase of the budget for Site C, just prior to the government announcing its decision, was…. I think he referred to it as increased costs. Let me just walk the member through what the facts are in this situation.
The budget was $7.96 billion as of 2010. There was inflation built into it. It went to $8.335 billion. The member is correct. It did increase. This is why. Costs associated with the change from harmonized sales tax to the provincial sales tax was one of the big factors, where government said: “You plan to get that from contingencies. It looks like you can get that from contingencies. We want to add it on top of the project.” Treasury Board made a decision that it would be more prudent to put the cost of that tax change on top of the $7.9 billion.
The $440 million that I mentioned earlier was not from increased costs but from an abundance of caution of the B.C. Liberal government. This is a ten-year project. Everybody knows it’s a big project. Everyone knows that with big projects, they’re hard to manage. So the $440 million was added to an already existing, quite healthy contingency.
The third reason for the change in the global budget is that government ordered B.C. Hydro to commence construction later than what the project plan called for. Time is money. Everyone knows that who knows anything about construction. By telling Hydro they were not going to start it when they planned to start it, which I believe was January, there was an extra cost. All of that added up. It explains the difference between $7.9 billion and $8.335 billion.
This price did not go up because all of a sudden someone, B.C. Hydro or somebody else, realized the costs were going to be higher. It went up out of a prudent approach to this project by B.C. Hydro and by the B.C. government.
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G. Heyman: I would invite the minister to share with us the calculations that went into those figures at some timetable that suits him.
I’d also note that, in fact, the panel did indeed say that Site C would be the least expensive of the alternatives and that its cost advantages would increase with the passing decades. They followed that by saying, “The panel concludes that the proponent has not fully demonstrated the need for the project on the timetable set forth.”
The minister is stating that we need power by a certain date. The panel disputed that and said that that had not been fully demonstrated. The panel went on to say that if ministers are inclined to proceed, they may wish to consider referring the load forecast and demand-side management plan details to the B.C. Utilities Commission.
I’m sure we could go on for hours with this debate and still not reach agreements, so I have a couple of other questions related to Site C and alternatives.
When the minister was in northeastern B.C. reannouncing the Meikle Wind Energy Project, he stated that: “The Meikle Wind Energy Project will contribute to British Columbia’s diversified clean and renewable energy supply. Independent power projects continue to play an important role in powering our province. Our decision to proceed with Site C provides a firm energy source that will support the integration of more wind energy projects in the future.”
Now, I would posit next to that conversations I’ve had with proponents of wind energy projects, as well as other forms of alternate renewable energy, who believe that other than maintaining the existing projects that they’ve built or that they have on the go, there’s not much future for them in the near term in B.C. if this project goes ahead.
The minister went on to say that Site C actually enables more renewable energy and that wind is the cheapest renewable technology available today and has come down in costs significantly over the last five years. I have no dispute whatsoever with that.
B.C. Hydro CEO, Ms. Jessica McDonald, who’s here with us today, has said that the Crown corporation has several more wind projects being considered under the standing offer purchase program. On April 15 three new agreements were announced for wind energy near West Kelowna, Summerland and Taylor that will add about 45 megawatts of capacity.
My question of the minister is: how many more projects than the three that were announced on April 15, if any, are there under consideration, and what is their projected capacity?
Hon. B. Bennett: Two parts to the answer. First of all, I’d like to explain something to the member. He would have no reason, really, I think, to know this, but I think it’s useful information.
The member indicated that the panel did conclude that B.C. Hydro had not fully demonstrated the need for Site C in the timetable set forth. What happened in that instance, and I’m sure this is…. You can look it up. Members don’t have to believe it, but this is what happened.
The panel settled on some different assumptions that B.C. Hydro had made on power demand for liquefied natural gas. The panel concluded that the low, rather than the expected, LNG scenario was appropriate. That was their right to do that, so they used the low, rather than the expected, on the LNG scenario. But when they did their calculations, they made a mathematical error.
The joint review panel made a mathematical error in its analysis. As a result, its conclusion that there was no need for new energy resources until 2028 was based on zero LNG load. They actually made a mistake. It was pointed out to the panel after the release of the panel report that they’d made a mistake. They acknowledged they made a mistake, as I understand it, but refused to change the report — their right. When you correct their mistake, in fact, what you find is that the forecast for when the energy will be needed made by B.C. Hydro was correct. That’s that one.
With respect to wind resources, everything the member said that I said, everything he quoted, I can remember saying and still stand behind. I think I’m correct, although always can be proven wrong. The member is interested in knowing how many other wind projects we have in the hopper, so to speak.
The standing offer program is a program that is quite different from a power call where B.C. Hydro will say, “We need X amount of megawatt hours over a period of time,” and companies bid on the opportunity to provide that new generation. The standing offer program is standing there ready for a willing and able participant to take part in the program. They can build a project that would generate up to 15 megawatts of electricity. Obviously, part of the program requires that the proponent sign an electricity purchase agreement with Hydro, so the price has to be market price.
In the case of the three wind projects just recently announced, those three projects were all part of the standing offer program. They were all, I think, about 15 megawatts apiece. They would have taken their projects to Hydro. They would have negotiated an electricity purchase agreement with Hydro. That all happened. The projects will be built and will generate roughly 15 megawatts apiece.
There are two more of those kinds of projects, two more standing offer projects in the Peace region, that Hydro is aware of. It’s not possible to guess at what might come in the door because it’s an annual program, and there could be a number of standing offer projects that come in over the next multiple years — two, ten, 15 years. There is an annual ceiling on how much of this electricity Hydro will buy. I think it’s 150 megawatts a year.
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Hon. B. Bennett: It’s 150 gigawatt hours a year, the maximum, so it’s not unlimited. You can’t have 20 wind projects in one year coming in at 15 megawatts each.
That is how these three wind projects got approved. Of course, the Meikle project was part of an earlier call. What I said at the time — that the wind technology has come down in price — is true.
It actually raises an interesting policy issue. The wind folks are saying that we don’t have enough wind energy in the province and that we’re somehow or other behind other provinces. Actually, if you look at what happened, from 2007 forward we were the first province in the country — I expect to get criticized for this shortly — to actually kick-start a renewable power industry.
At the time — in 2007, ’08, ’09, ’10 — the technology that seemed to come forward the fastest and the technology that could produce the electricity for the least cost at that time was”. There were some wind projects that were approved — the Peace River area has high-quality wind resources — but it was run of the river.
We had a lot of the run-of-the-river projects started back between 2008 and 2011 and ’12 because of the factors I just talked about, not because anybody had a bias against wind. At that time the cost of wind had not come down nearly as much as where it’s at today. The point I was trying to make, in relation to the Meikle project, is that it has come down in cost.
The last thing that has to be said in terms of wind”. This applies to run of the river. It applies to just about all of the renewable technologies, although not big hydroelectric dams; not nuclear, which we don’t do in B.C.; and not carbon-based fuels, like oil or gas or coal. The rest of the technologies provide intermittent electricity.
The member is correct to suggest that Site C actually does set the table for additional intermittent energy in the future. You can’t have 1,000 megawatts of wind unless you have 1,000 megawatts of something else to back it up, to cover off when the wind is not blowing. That’s just the way the system works.
Having Site C there and having the water behind the first reservoir and then the water behind that great big Williston reservoir gives the province, gives B.C. Hydro, the capacity to take on more intermittent electricity in the future. The member is correct. I think he was suggesting that. And we think that’s a good thing.
G. Heyman: In response to the minister’s comments, I was in fact aware of what he characterized as a mathematical error in the report. First of all, I’d like to point out that I don’t know anybody in the province, other than the wood fibre LNG proposal, who actually expects any other LNG projects to be powered by anything other than gas. Certainly, the proponents have said that’s the only way they can make them economical.
I’d also point out that the panel chair responded to the mathematical error issue by saying he admitted it but that even without it, it didn’t change the basis for the finding and statement of the panel.
I’m going to assume from the minister’s response that the three projects that were announced on April 15 and the two others to which he referred that are in the Peace were the”. Five would be the sum total of what Ms. McDonald referenced when she said that several more were being considered.
He didn’t answer the capacity question. I’m not sure that he has the answer to that, but if he does, I’d like to have it.
In the interest of time, I have one more question before my colleague from Vancouver-Kingsway continues.
One of the things that the joint review panel noted was an absence of research into B.C.’s geothermal energy potential as well as costs. They said:
“The panel concludes that a failure to pursue research over the last 30 years into B.C.’s geothermal resources has left B.C. Hydro without information about a resource that B.C. Hydro thinks may offer up to 700 megawatts of firm, economic power with low environmental costs.”
This is despite the fact that the B.C. Utilities Commission recommended such research over three decades ago.
Recommendation 48 of the panel report states:
“...regardless of the decision taken on Site C, that B.C. Hydro establish a research and development budget for the resource and engineering characterization of geographically diverse renewable resources, conservation techniques, the optimal integration of intermittent and firm sources, and climate-induced changes to hydrology, and that an appropriate allowance in its revenue requirements be approved by the B.C. Utilities Commission.”
Now, I understand that that is outside Hydro’s mandate currently. Does the minister intend to direct or empower B.C. Hydro to act on recommendation 48 generally and/or specifically with respect to the potential for geothermal power in British Columbia?
Hon. B. Bennett: First of all, we’re still, I guess, debating the joint review panel’s mistake. But when they went to a low load instead of the other higher load, which was, as I said, their right to have that interpretation, they still made a mistake in the calculation they did. They calculated on the basis of zero load.
There’s already a load for LNG. It’s Fortis. I mean, Fortis has done one major expansion in the Lower Mainland to ensure that they can manufacture LNG for transportation use. They are going to do a second major expansion so that they can export LNG — all electricity. The member did mention Woodfibre. It’s e-drive, no gas, in the case of that LNG facility.
I never know what’s positional and what’s just perhaps misinformation, but what it sounds like is that member isn’t aware that these large LNG facilities, like the LNG Canada facility…. Shell has already signed an agree-
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ment with B.C. Hydro to purchase electricity at a premium price.
These large facilities, even though, yes, they are going to use gas to drive their compressors, as far as we know, will need ancillary electricity in the order of 150 to 200 megawatts each. That’s a lot of electricity. So they will drive demand, and the joint review panel’s calculations were done on the basis of zero LNG load. We already know that’s not correct. Even one large LNG plant over the next 20 years will drive it up, and we’re going to get a lot more than one. Enough said on that one.
The member asked about geothermal, and I’m glad that he did. It’s interesting, first of all, hearing the panel talk about geothermal. “Why doesn’t B.C. generate a whole bunch of electricity with geothermal?” Then I hear the geothermal association of B.C., which is a very small association — one or two people, I think — saying: “Well, we could have generated the 1,100 megawatts of electricity. Why did they decide to build this great big dam? We could have done it with geothermal.”
There isn’t one proven geothermal project anywhere in this province — not one. There was a company that tried to develop a geothermal project in the Pemberton area. They spent $35 million and quit. It’s a great idea. I am very supportive, very enthusiastic about geothermal, largely because it has the potential to be more firm. It’s a little stronger on the capacity side than the other intermittent technologies. It would be great if we could generate a bunch of electricity with geothermal in the province.
The problem is that there’s no sign yet, even after a lot of money — millions, tens of millions — being spent, that we have the kinds of geothermal resources that are required to actually provide that kind of electricity. Again, I hope we do, and I think the private sector will continue to explore and continue to invest.
I met with two different groups of geothermal folks in the last month and have encouraged them and will continue to encourage them. But that technology is nowhere close to being able to generate any electricity in the province today. Just so we’re on the same page, that is a fact.
Will we encourage some research in the future on geothermal? I don’t know yet. I’m always worried that anything we tell B.C. Hydro to do is going to go on the bottom line and push rates up. That’s a fact. Everybody knows that. It’s not funny. The critic is laughing. Driving rates up is not funny. It’s a very serious thing, and we take it seriously.
A Voice: We take responsibility.
Hon. B. Bennett: We take responsibility for what’s necessary.
Will we have Hydro invest ratepayers’ money in researching and developing geothermal? I don’t know yet. I would not dismiss that. But at the present time, certainly, the private sector has invested a lot of money in trying to research and develop it and has not been successful so far.
G. Heyman: I appreciate the minister’s answer — it’s kind of an answer — that he wouldn’t rule out the possibility of Hydro investing in some research. That was, in fact, my question. I know that the minister has met with representatives of the geothermal industry as well as a specific company.
I just simply comment before I turn the microphone back to my colleague, the critic for B.C. Hydro. I know the minister knows this. Geothermal technologies in other countries that are situated, basically, on the same Ring of Fire as Canada and B.C. have proven the technologies, notwithstanding the fact that they haven’t been deployed in B.C. There are different technologies than the one with which the company that the minister referenced were unsuccessful.
A. Dix: The minister, I think, said eloquently that the reason he took, and the cabinet took, the decision on Site C was that the appropriate decision was made at the political level for that. Given the implications, he was taking political responsibility.
As he knows, the decisions with respect to self-sufficiency of B.C. Hydro — decisions taken in the period between 2004 and 2012 — have cost the utility an extraordinary amount of money.
Just take the 2006 and 2009 clean call together. What you’re talking about this year, when you compare that to the mid-Columbia price…. The government can argue that isn’t a fair way to compare it. The mid-Columbia price, as you know, in the budget is estimated to be about $32 Canadian this year on average. The average price of those calls: of the 2009 call, $126; $191 on the 2006 clean call. The average price: $121.81.
Now, B.C. Hydro has acknowledged that the government was wrong and that these costs…. They have cost B.C. Hydro, according to Marvin Shaffer, $1.4 billion over four years. It’s a very generous assessment. It seems like more of that was buying power the government and the cabinet made them buy in order to fulfil government policy, and ratepayers are now having to eat the price of it.
It would have been way higher, except the government desperately pulled back the policy when announcing the ten-year plan after the election.
I guess, given that the numbers to make the 9 percent and then the 6 percent were approximately $344 million, according to the filing of the BCUC in March 2014 — $344 in the first year; $599 in the second year. Those are the two rate increase numbers that the public is paying for in these two years to make up for these disastrous decisions.
Will the minister at least, since he’s taking responsibility for Site C, acknowledge that those disastrous decisions — the decisions not made by B.C. Hydro, but made in
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the Liberal cabinet room — are a significant reason why B.C. Hydro customers are facing such dramatic rate increases today?
Hon. B. Bennett: I’m happy to get this question. I haven’t been given any opportunity to really talk about this in the House in question period. For some reason, the Opposition hasn’t asked any questions about it. So I’m really grateful. I am, and I feel I should state that. So, two-year rate increase — a little more than 15 percent over two years — what is it made up of?
Well, it’s made up of capital additions and amortization. It’s made up of capital additions finance charges. It’s made up of capital additions return on equity. It’s made up of rate-smoothing, made up of the regulatory account amortization, operating costs and some miscellaneous, which is about 10 percent, and what the member has asked about, which is the cost of buying power from private providers.
The extent to which buying private power had an impact on the 15-plus-percent increase over the two years is limited to 1 percent of the total. I can see with my very own eyes that the member doesn’t like the answer, so I suspect I’ll get a follow-up.
A. Dix: They’re buying power, in some cases. I mean, they themselves made the case against private power when they wanted to proceed with Site C, about the extraordinary costs. They’re buying power they don’t need, that they can’t sell, that’s worth, in some cases, a quarter of what they’re buying it for. They have to buy it on a 35-year contract, and they’re losing hundreds of millions of dollars a year on those purchases.
The idea that the things aren’t connected just shows how laughable it is for the minister to say his justification for Site C is that he wanted to take responsibility. Those decisions were made in the cabinet room, and B.C. Hydro, in desperation, is trying to reel them back in the ten-year plan, trying to get out of contracts. They changed the self-sufficiency requirement. They did, they and the government, because the self-sufficiency requirement, such as it was…. The drought-year requirement — which was a policy that was nonsense at the time and proven to be nonsense — that they have now abandoned is costing B.C. ratepayers hundreds of millions of dollars. The idea, the minister says, that buying high and selling low isn’t costing B.C. Hydro ratepayers money will make people reflect on the government’s willingness to take responsibility for decisions.
One of the other aspects of rate increases, of course, is increases in costs. You know, I like to reflect on these matters and reflect on the information that B.C. Hydro provides in its filings under the Financial Information Act. It’s an interesting fact. I’d be interested to hear the minister talk about it, that if you….
B.C. Hydro, of course, has many outstanding employees, thousands of them across British Columbia. I think people in British Columbia have shown, through their history, to love B.C. Hydro. The fact of the matter is, though, that B.C. Hydro, especially in middle management, has a very large number of high-paid employees. How many? Well, it is true….
Just to use the standard that the government used, those that would be receiving the tax cut if over $150,000…. That was the government’s priority in the budget, their share of the $236 million. Just to put that in context, if you look at Financial Information Act filings in the period from 2006 — so, post-Accenture — to 2014, the most recent filing, there were 222 Hydro, B.C. Transmission Corporation and Powerex employees over $150,000 in 2006. There are 677 today. That’s triple the number of those employees at $150,000 and above.
Some of that, of course, is caused by issues of overtime, which existed in 2006 and exists now for line people and other people at B.C. Hydro. It’s just an apples-to-apples comparison. At Powerex the number of people over $150,000 a year doubled, so that Powerex has a salary budget — which is mostly, as the minister will know, made up of high-wage people — that went from, in 2006, $17.5 million to, in 2014, $31.2 million.
When the president of B.C. Hydro, who obviously wasn’t there — essentially just arrived at B.C. Hydro — was head of the public service, you had fewer people over $150,000 than are at B.C. Hydro. There are those issues. I’d be interested in the minister’s comments on those.
Then the other context for this ramping up of administrative costs, of course, is an increase in contracting out. It’s kind of the daily double, where you increase internal costs and contract out more. With that in mind, and the concern over rates in mind, I wanted to ask the minister about a grievance that’s been settled with COPE 378. The grievance showed, essentially, that B.C. Hydro, because of a real or perceived cap on FTEs, was contracting out at higher cost work done previously by FTEs.
[J. Thornthwaite in the chair.]
In other words, they were increasing costs, I presume to skirt the FTE cap, at higher costs to ratepayers.
The grievance was won. It argued that a significant number of contract workers were doing work that should be done by permanent members. They were able to identify — and these aren’t over $150,000 a year — individual contractors and contracting companies. They found that the money paid to these contractors had increased eightfold. That’s right — you were just discussing increased contracting costs at B.C. Hydro: eightfold from 2010, $3.2 million, to the present $25.1 million. That’s $3.2 million to $25.1 million. Of course, B.C. Hydro lost the grievance.
Does the minister think this is appropriate, because
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of his government’s directives with respect to FTEs: that B.C. Hydro is paying two to four times more for the same work?
Hon. B. Bennett: I’m going to divide my answer into two parts, while staff is getting me ready to answer the last question in relation to the human resource or labour-based question.
The member mentioned that B.C. Hydro generates power. I think he called it expensive power that they don’t need. I would just say to the member that B.C. Hydro actually bought more power last fiscal, the just-ended fiscal, than they sold. So there was no electricity that they didn’t need. It’s a pretty simple concept. They actually sold more than they bought. Or they bought more than they sold, sorry.
I do have some other numbers that I can provide to the member. I don’t have to, but I think I should. He didn’t specifically ask this, but he was asking about the cost of private power and sort of how it stacks up against other types of publicly provided power. I can’t do it right now, but I can actually give him a grid that shows the percentage of domestic energy demand provided by IPPs versus the percentage of the revenue requirement attributed to IPP costs from 2013 estimated out to 2019. If he wants this, it would show him that in fact it’s not out of line. The amount that is paid for this private power is not out of whack compared to other sources of power. I’m not sure he’s interested in having that information, but I have it here if he is.
I’m going to just take a quick break of about 30 seconds, 60 seconds to get ready for the next part of the answer.
First, the context for labour costs. Labour costs account for less than 10 percent of B.C. Hydro’s total costs. They’re definitely not the driving force behind rate increases. Manager salaries have been frozen since 2012 — actually, for four of the last five years. Other than government or a Crown corporation, tell me anywhere else in the marketplace that that’s happened.
Forty percent of B.C. Hydro employees who make more than $100,000 in total remuneration are union employees. I’m assuming that the member is not concerned about them. That includes skilled tradespeople who are required 24 hours a day, seven days a week to keep the lights on in B.C. We all are grateful for those people. The percentage of B.C. Hydro’s workforce that earns a total remuneration over $100,000 continues to be slightly less than other electric utilities in Canada.
The corporation froze salaries in fiscal 2015 in alignment with the manager salary freeze policy and the union bargaining mandate. Just to give the member some context on what utility employees get paid in other places, over 50 percent of employees at SaskPower, Hydro One, Ontario power generation earn over $100,000 per year.
It is, I think, 45 percent at B.C. Hydro. B.C. Hydro actually has fewer employees earning $100,000 in total remuneration than those other utilities, so I think it’s unfair — and certainly inaccurate — to suggest that somehow or other B.C. Hydro has always these highly paid employees and that that is unusual for a utility.
With respect to the specific COPE grievance that was filed in February 2012 and that the member asked about, he’s correct that COPE alleged that B.C. Hydro had improperly contracted in certain consultants, and that, at law, B.C. Hydro is actually the true employer of those consultants. COPE hasn’t provided the full list of consultants that they’re disputing under this grievance yet. Hopefully, they’ll do that.
Once COPE does provide the list of disputed consultants, Hydro will undertake a review of those consultants and determine if there’s merit to the union’s concerns. If there is merit to the union’s concerns about a particular consultant or consultants, then B.C. Hydro would work with the union to address these.
Options to rectify work that has been improperly contracted out include discontinuing the work, properly contracting it out, hiring an employee in accordance with the collective agreement. The member is correct to suggest that there were a few cases — there were ten sample cases — that COPE brought forward to use in an initial arbitration hearing.
The ten sample cases provided services to construction management work and properties. Properties would be sales, leasing, acquisition of property rights. Following a hearing in March 2015, the arbitrator found that these ten sample consultants had been improperly contracted and that B.C. Hydro was the true employer, so the member is correct about those ten sample consultants. Until COPE brings forward its full list, we won’t know whether it is a wider problem than that.
A. Dix: It’s why I used the level of $150,000, which the government itself used when it imposed its surtax prior to the election. Just to note: that number has tripled since 2006 in a period of significant contracting out.
Does the minister agree that it’s inappropriate — and it’s wrong — that was the question — that B.C. Hydro is paying more for work than it should, as this grievance showed? As this significant list of contracts…. In the case of the contracts in front of me, the contracts went from $3.27 million in 2010 to $25.2 million in 2014, an increase of 668 percent during this period of restraint.
I guess the question is: does he agree with me that this contracting of work that could be done cheaper by Hydro employees is a practice that should end?
Hon. B. Bennett: What I can say to the member is that if contracting out by B.C. Hydro, or any Crown corporation or government agency, is actually costing the taxpayer or the ratepayer more than it otherwise would, that’s a wrong practice.
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In the case of the ten sample parties that went to arbitration, the union won and Hydro lost. Clearly, there was a mistake made with those ten. To extrapolate that across the whole issue of contracting out, I think, is bad logic, and I don’t think it carries.
A. Dix: We’re not doing that. We have a specific list of contracts involved. Obviously, Hydro has a much longer list of contractors themselves, and what that shows is a significant increase in cost. The direction on FTEs, the minister will recall, came from the government to B.C. Hydro.
It’s forcing B.C. Hydro, according to the result of the arbitration, which we’ve read and I know the minister has read as well…. It’s a very significant amount of money in the case of these specific contracts, for example, which have increased by 668 percent. That seems like quite a bit.
It’s a problem, I think, when one’s claiming an FTE cap and one’s getting around the FTE cap through contracting that is more expensive than that. The minister will know, as a matter of fact, because he knows the call-out costs of Hydro’s line folks, who do about 98 percent of the calls in most of the regions, is about 20 percent the cost of the extra 2 percent that’s contracted out in that case. That shows, I think, the efficiency of Hydro’s workers and why these contracting-out schemes don’t necessarily benefit B.C. Hydro.
We’re picking up the pace here because we’re getting to the end of these estimates. I’ve got a few questions to ask, and we’ll have a few shorter ones to ask of the minister.
With respect to the issue of a low-income rate, many jurisdictions do this. As hydro rates go up significantly, the ability to pay for someone at $150,000 is different than it is for someone at $30,000. As the minister will know, the former critic, the Leader of the Opposition, has proposed legislation on this question.
Given the very dramatic rate increases, a result of Liberal policies, that hydro ratepayers have to pay this year, is the minister considering some sort of relief for low-income ratepayers?
Hon. B. Bennett: The question, in general, if I can characterize it this way, is: what are we doing to help low-income British Columbians deal with increasing hydro rates?
It’s not the answer, but I think the context is always important. We have the third-lowest residential hydro rates in North America. I know the opposition would love to characterize our hydro rates in this province as being unduly high. They’re not. Like I say, they’re third-lowest in North America. That’s pretty darned good. But it is necessary and right for the utility to consider what they can do to assist low-income British Columbians — and everyone else, actually — to reduce their electricity usage.
We have a choice. I know the Leader of the Opposition introduced a piece of legislation — I can’t remember if it was this term; I think it was this term — that would see either cash rebates or just lower rates. We believe that the way to deal with this situation is to help people use less electricity, so we’ve put resources towards that through the Power Smart program. It has been, I think, quite effective in encouraging people to invest in things like insulation and other things around their house that will lead to less consumption of electricity.
Specifically to low-income British Columbians, we have a couple of programs. One is called the energy savings kit, which low-income British Columbians get for free, and another program called the conservation assistance program, which is available to low-income British Columbians.
It is my view that we could do more for low-income British Columbians to deal with their hydro costs. I think we will do it differently than what the opposition would suggest. I think it’s always important regardless of income to help people use less electricity. That’s the way for them to spend less money, as opposed to just handing out money from other ratepayers.
But I do take, I think, the point implicit in the member’s question, and that is that we should always be on the lookout for things we can do to help people deal with their costs, particularly if they’re low-income.
A. Dix: I think the answer to the question was no. I’ll proceed on that basis, and the minister can correct me in his next answer.
The minister referred to demand-side management, so we might as well go there. The Hydro annual report shows that B.C. Hydro, despite considerable expenditures…. Although a significant reduction, the expenditure has missed its 2014 target quite significantly. Its 2015 target is coming up. Presumably, we’ll get that information shortly — fiscal end 2015, of 5,500.
What are in fact, if B.C. Hydro has this, the results for this year? Did B.C. Hydro, for the second consecutive year, significantly miss its demand-side management targets?
Hon. B. Bennett: DSM, as it applies to rates, needs to be understood in the context of the different ratepayers, the different ratepayer groups — the residential ratepayer group, the commercial and the industrial.
The member is probably aware of what Hydro has done in the industrial category, particularly with the thermal-mechanical pulp program. There’s up to $100 million of incentives available to TMP customers. I think that that shows great promise. In fact, we’ve been told by companies — I think they’ve been public about it — that this program has actually preserved thousands of jobs in the province. Sometimes there’s a side benefit to the conservation of electricity. Certainly, that applies in the industrial ratepayer group.
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In the residential ratepayer group, Power Smart and other programs have worked well to help Hydro achieve its goals for demand-side management. Probably not, maybe, quite as well as they had hoped, but they’ve actually worked quite well.
The area that has not proven out in terms of the amount of conservation realized from the programs in place is the commercial ratepayer. That has been, I think, a disappointment for Hydro in terms of the results from the rates and the programs that they designed for the commercial ratepayer.
I’m sure the member is going to want to ask about whether Hydro will achieve its target long term. I said this when we announced the ten-year rates plan. Government and B.C. Hydro didn’t sit down and just decide that we might as well build a big dam and a big power plant up in the Peace and generate 1,100 megawatts. That’s actually not how it worked.
How it worked was that Hydro sat down and figured out how they could effect a large amount of conservation of electricity in the province. They have very, very aggressive goals, higher even than the 66 percent set out in the Clean Energy Act. I think they’re to be commended for that. Whether they achieve those goals or not, I think that having strong, aggressive goals for energy conservation is nothing but a good thing.
I just was handed something that relates to the low-income question. More than 80,000 energy-saving kits have been distributed to low-income customers. There’s the number for the member.
In terms of conservation, if the member has any more questions, I’ll try to answer them.
A. Dix: Maybe I’ll just repeat my first question, which the minister, of course, didn’t answer. Hydro missed its target in 2014, according to the annual report, quite significantly — well, I don’t know — by 10 percent. Are the numbers in the immediately past fiscal year, and did they miss their target?
Hon. B. Bennett: Hydro missed its target for DSM that year.
A. Dix: By how much did they miss their target? I think we’re in a kind of “three yards and a cloud of dust” discussion here. By how much did they miss their target?
Hon. B. Bennett: It looks like the missed target is about 1,100 or 1,200 gigawatt hours. That, I am advised, is almost entirely due to what I talked about earlier, which is the lack of success with the DSM programs relating to commercial ratepayers. Not so much on the industrial or residential side.
The only other thing that I would mention…. The member may be aware of this. Apparently, the DSM totals, annually, are a running total. You carry forward from the year before. But that’s the answer.
A. Dix: Just so I understand it, and I’m again unfairly quoting from the annual report at this point. The gigawatt-hour target in 2014 was 5,100. The actual was 4,776.
The target was 5,500, and we missed it by 1,100 to 1,200. We missed the target, then, by roughly 20 to 22 percent in 2015. Based on what expenditure of money did we miss that target?
Hon. B. Bennett: Let’s try this. There’s a difference between incentive-based programs, where there is an investment, and rate design, where it’s staff time. Staff time, a couple of million bucks but nothing more than that.
Generally speaking, Hydro is of a view — and from what I’ve seen over my time, they’re absolutely right — that using rate designs to achieve DSM targets is a good way to go. It often does work. It works most of the time.
It didn’t work with these commercial ratepayers in this case. They didn’t meet their target because of that. But they weren’t out of pocket a bunch of money because of that.
A. Dix: Given the very significant reliance of B.C. Hydro on DSM to meet its goals, is the corporation planning to amend the IRP to reflect the underperformance of the DSM program?
Hon. B. Bennett: Yeah, I was reminded that the IRP is up for a review this fall, at which time, Hydro will have to state whether they believe they can continue to, or whether they can, in fact, achieve their targets for DSM in the three different ratepayer categories.
I think the member is correct to suggest that based on the recent experience, it may well not be possible to achieve what they set as a goal for DSM. I think they’ll be successful overall, but they may not be able to achieve that goal. I can’t tell the member categorically that the goal will change, but it probably will when the IRP is reviewed this fall.
A. Dix: It went from 50 percent in the 2007 plan to 66 percent. There’s a chance we’ll see it go back to 50 percent? Is that the suggestion?
Hon. B. Bennett: I just want to clarify something that the member said. He may well be aware of this, but just in case…. The IRP actually sets a goal of 78 percent DSM. The Clean Energy Act is 66 percent. Hydro advises me that they’re comfortable with the 66 percent. They’re quite sure that in the fall they will be to a place where they don’t think they’ll be able to achieve the 78.
A. Dix: Just a technical question. I was reviewing the reorganization that was put in place in February. There were
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changes at the senior executive level in terms of the way the very senior executive levels of B.C. Hydro function.
In particular, it appeared on the surface that two senior executives, Ray Aldeguer and Debbie Nagle, saw their positions downgraded in the organization. Maybe that’s not a fair description. Perhaps reporting to Mr. O’Riley and not reporting to the president is not a downgrade. I don’t want to characterize these matters for anyone.
I just want to understand it. Is it the case that this change substantially changed either of their roles, or is it the case that this change was B.C. Hydro’s dealing organizationally with PSEC guidelines?
Hon. B. Bennett: While the changes are in line with what PSEC has asked for, certainly people were not moved around for the sake of PSEC compliance. They were moved around to improve the management and leadership at B.C. Hydro.
A. Dix: Just being clear, I appreciate that. I just wanted to understand. PSEC has a number of guidelines relating to the reporting relationships — how many vice-presidents can report to other vice-presidents and so on. Did these changes in the senior management structure of B.C. Hydro…?
I guess two questions. The first one I asked before is: does it actually change either of their roles, other than they report through Mr. O’Riley? Secondly, was it brought into place because of these PSEC guidelines and as a response to PSEC guidelines?
It seems to me, reading those guidelines, that it brings senior management into compliance with those guidelines. But I’m sure other people give more thought to this than I. So I guess the two related questions: any change to those two individuals who are senior executives of B.C. Hydro, and was this an adjustment related to those guidelines, or was there a need to adjust the senior structure of B.C. Hydro to be in compliance with PSEC guidelines?
Hon. B. Bennett: The member has asked, I think, about a specific official, the chief safety officer being one of them. What I can tell the member is that for anyone whose title changed, their role changed in each case. I can provide for the member the details of how their role changed. And yes, the reorganization was compliant with PSEC rules. They were compliant before the reorg, and they were compliant after the reorg.
A. Dix: I asked specifically about Ms. Nagle and Mr. Aldeguer. Did their roles change?
Hon. B. Bennett: In one case the roles changed. I think the member asked about Debbie Nagle, the senior vice-president and chief human resources officer. Her role did change. In the case of the senior vice-president, corporate services and general counsel, Ray Aldeguer, his roles are, if you look at the org chart, somewhat more limited. They didn’t change with the change in reporting. His roles didn’t change. But again, everyone remained compliant with PSEC.
A. Dix: Presumably, Mr. Aldeguer’s role changed to the extent that he reports through Mr. O’Riley.
If I may step back. These are just short questions. Just a question about agricultural land and the process for exclusions out of the ALR related to the Site C project. Can the minister just take us through those processes — how the public finds out about them, if new exclusions are required, how that occurs in terms of exclusions from the ALR and cabinet decisions.
Are those requests from Hydro to cabinet that they follow through on? And would it be possible for our critic to receive a briefing from B.C. Hydro with respect to those requests and the need for agricultural land for the Site C project?
Hon. B. Bennett: The land was removed as a result of an order under the Environment and Land Use Act, so that would be the Minister of Forests, Lands and Natural Resource Operations. I’d be happy to arrange a briefing to the member or to anybody from the opposition side to explain how it was effected. I can say more, but that’s all he asked.
A. Dix: You know, really, you can’t get a more ideal answer than that. I think we’re making progress, with only 45 minutes left in the estimates.
A question about communications at B.C. Hydro. Is B.C. Hydro, in the course of this fiscal year 2015-16, planning a communications program to improve its corporate reputation? Obviously, B.C. Hydro does significant advertising with relation to the Power Smart program. That’s the core of its advertising. But is there going to be a new advertising campaign, sort of representational advertising by B.C. Hydro, in the coming fiscal year?
Hon. B. Bennett: The advertising budget is not changing, so same amount of money as the year before, I think. I’m not aware of any master strategy to go out and convince the ratepayer public that B.C. Hydro is wonderful. But I can tell the member that I have an interest, as the Energy Minister, in seeing B.C. Hydro work on its customer service model, and the CEO and I have had discussions about that.
I know that the CEO, who’s relatively new, has an interest in knowing how B.C. Hydro’s interaction interfaces are resonating or not resonating with the public. I think that’s a reasonable thing for the CEO of B.C. Hydro to want to know. How does the public relate to these Power Smart programs? Do they know about them? Do they
[ Page 7478 ]
like them? Would they like other programs? Those are, I think, reasonable things for Hydro to find out, and so they are doing some of that work but without any increase to the advertising budget.
A. Dix: Just very precisely: there are no plans for a new campaign in this fiscal year to address issues around B.C. Hydro’s corporate reputation.
Hon. B. Bennett: We would not use the language that the member has used to describe a program. That’s not what Hydro is doing. First and foremost, there’s no additional money in the budget to do anything in the nature of improving the brand or building more confidence in the ratepayer base. But as I said a minute ago, there is an interest in knowing how the current B.C. Hydro programs do resonate with the public. There are efforts underway, that Hydro makes no secret of, to ensure that what they’re doing or, perhaps in some cases, what they’re not doing, is known to the corporation so that they can improve their service to the public.
A. Dix: I think what the minister is talking about is commonly known as polling, but I might be wrong on that.
I just wanted to ask the minister…. The corporation changed one of its main communications providers, its principal communication adviser, to a firm called Taxi. I think Taxi lost the Telus contract and is basically a Toronto company now. Is B.C. Hydro satisfied with the work of its communications company?
Hon. B. Bennett: In terms of polling, the member said that he thought I was referring to polling when I was talking about taking a measure of the public’s response to Hydro programs. There is no formal polling that’s done by Hydro. They do subscribe to a monthly service on trends.
In terms of the company known as Taxi, they actually won a public procurement opportunity a little over a year ago. There was a company there, DDB, prior to them. I’m told that the new campaign on Power Smart that’s being delivered by Taxi seems to be quite effective. I don’t know if happy is the right word to describe B.C. Hydro, but it looks like it’s so far, so good.
N. Macdonald: I just have one question. It’s on E-Plus. There are now about 8,000 B.C. Hydro customers on the E-Plus program. There have been no new E-Plus customers since 2008. As the minister knows, E-Plus provides cheaper electricity to people who signed up in areas with no natural gas. There are, of course, requirements for people who signed up into that program. Of course, quite a few of them are in my riding, but they would also be found, I think, in Vancouver Island and other parts of the province.
In 2007 the government tried to end E-Plus, but the Utilities Commission stopped that effort. Now I’ve had numerous constituents come to my office because they received a letter from B.C. Hydro that is raising fears that the government is again trying to eliminate that program.
E-plus was offered by B.C. Hydro to residents who, as I said, didn’t have natural gas available to them, which is the case in most of my riding, and 85 percent of E-Plus subscribers are 55 or older. Many are on fixed incomes, so to lose E-Plus pricing would be a substantial hardship. I think the minister would agree. For them, for many of these people, especially the ones who have contacted my office, it’s a substantial hardship.
My constituents express it in this way. They feel that they made a deal in good faith with B.C. Hydro and, of course, with the government. They feel that any attempt by B.C. Hydro to back out of that, certainly, in their view — and I would agree; it’s hard to argue — would be bad faith from B.C. Hydro and from the government.
Often the argument made is that somehow this is unfair to other subscribers potentially, but, of course, the government takes a tremendous amount of money out of B.C. Hydro and puts it into general revenue, so to argue poverty and somehow that that money is needed when government feels free to take it out seems not really a strong argument. Just to look at the B.C. Hydro website, I think you’re pretty upfront about the fact that there’s not a lot of money to be grabbed here.
I guess what I’m looking for is…. I know it’s still in consultation phase, but you have raised concerns. These are people that need, I think, for the minister to do what he should do, in my view, which is to provide some assurance to those on E-Plus that the government will not renege on its obligations to what are mainly seniors in our province.
Hon. B. Bennett: Probably what’s got people alarmed is the letters that went out in February of this year looking for opinion and information. That’s fair enough. But Hydro has not made any decision about what…. I mean, their options are to leave it alone and do nothing or make a proposal to change it and take it to the BCUC.
They’re going to make that decision sometime this summer. After June 30, let’s say, they’ll make a decision on those two choices: leave it alone and do nothing, or create a proposal, take it to the BCUC and see what the BCUC has to say. I can’t tell the member any more than that. I can tell him that no decision has been made at this point in time.
N. Macdonald: The time frame the minister is giving me is this summer. This is, of course, a group of people that will, over time, become less and less. In 2007 I think we were at 13,000. We’re down to 8,000, so it will time out naturally.
While that seems a short period by government stan-
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dards, of course, these are people that are calling the office again and again. They feel that they have no power. They feel that the decision may be made despite anything they say. I think the minister can understand that sort of sentiment.
Again, I would ask the minister, from his perspective…. Because whether it’s a B.C. Hydro decision or not, the minister’s perspective, I suspect, will hold sway in terms of whether this is taken on by B.C. Hydro, given the politics of it.
I guess I would look again for assurance that I can send out to my constituents, just to assure them that the minister understands their situation and understands the issue and, I think, feels that this would likely not be the direction that the government would go in. That’s the sort of insurance, and then that’s the time that I have.
Hon. B. Bennett: I swore I’d never refer to myself in the third person, but the Minister of Energy and Mines lives outside of Cranbrook in area C. So the member can tell his constituents that the current Minister of Energy and Mines understands the situation that they’re in, not having access to natural gas. It’s a problem in lots of places — South Okanagan, the Columbia Valley being two places.
The two-tiered rates present issues — the same issues, really. I’m interested in that and have some current thinking going on in the ministry and with B.C. Hydro around how we might be able to deal with that. Fortis is obviously the utility in question in the South Okanagan; Hydro in the member’s area.
I can’t guess at what the final decision will be. But certainly, I do understand the situation that these folks are in — and other people who are not the same customer category but are in a place where they’re paying more money because of the second tier and don’t have access to natural gas. It is an issue.
A. Dix: A question, as we get into this round, is about Burrard Thermal. Burrard Thermal produces, generates, relatively little electricity now. But what is the average cost of electricity produced by Burrard Thermal? Is it more or less expensive than the electricity generated in the government’s clean call?
[M. Morris in the chair.]
Hon. B. Bennett: I’m imagining that the member might, in fact, be in favour of generating electricity with natural gas. That’s an interesting position for the NDP to take, particularly when it’s downtown Vancouver.
A. Dix: Port Moody.
Hon. B. Bennett: That’s downtown. For a guy from Cranbrook, that’s downtown.
The Burrard Thermal is an old plant that was paid for many, many years ago, unlike the newer assets that generate electricity, so you don’t have that amortization cost, which is significant. So sure, it’s cheaper to generate electricity at Burrard Thermal on short term than many other sources of electricity, particularly the newer sources of electricity that have these large amortization costs.
A. Dix: I missed the part of the answer where the minister described the average cost of doing that at Burrard Thermal.
Hon. B. Bennett: Again, short term. The member, I’m sure, is aware that it would take close to a half a million dollars to get Burrard Thermal in a condition where you could run it full-time. But running it the way it is occasionally run now, short term…. As I said, it is cheaper than the new sources of generation. That makes total sense.
It is roughly $30 a megawatt hour right now. But you would, again, have to invest a lot of money in it before you would be able to run it full-time. Of course, when you invest a lot of money, you would add the amortization costs, and the costs of the power would go up.
A. Dix: It’s a precise question, because the government suggests that closing Burrard Thermal saves $14 million, presumably. Right now Burrard Thermal, I think, produces just under 100 gigawatts — I don’t know; it’s something like that — a year, 0.2 percent of the load or under 1 percent of the load certainly. You still have to replace the energy. The minister is presumably saying you’re going to replace it and replace its role.
Secondly, Burrard Thermal will obviously continue to play a role in the system but not its current role. Does the government think that’s a prudent path to take, given the very significant concerns around seismic issues in Metro Vancouver that can affect the system at any given time — to give up the opportunity that is provided by Burrard Thermal or the continuing role that Burrard Thermal plays at its present levels in the system?
Hon. B. Bennett: I think the member’s question was around the use of Burrard Thermal as an asset relating to earthquakes. I’m advised by B.C. Hydro that Burrard Thermal was never built to withstand an earthquake and would not be a reliable asset in the case of an earthquake. So no, it’s not an asset that could be used for that.
If there’s anything else on Burrard Thermal that I missed, the member will let me know.
A. Dix: I didn’t want to disappoint the minister, so I was going to ask him a little bit about the smart meter program. In particular, maybe just to start the discussion….
Just for the record: the number of people using the
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radio-off smart meter, the number of people using the meter choices or maintaining their legacy meter in some fashion, and the number of people using a smart meter, which I think is the largest of the three numbers.
Hon. B. Bennett: The smart meter program — 1.9 million customers are smart. That is more than 99 percent. So 14,732 customers have elected to keep the old meter, and of those customers, 950 are refusing to allow their expired old meter to be replaced.
When I took this job, I became aware of an organization known as Measurement Canada, which I’m sure the member, having been around longer than I, is well aware of. I had never heard of it, but they apparently go around the country making sure that all the instruments that measure things are reliable and are not timed out. That’s the case with electricity meters. There are 950 people that want to keep their arms wrapped around those meters, even though, according to Measurement Canada, they should be replaced.
There are 555 customers, I’m advised, who have requested a radio-off meter — a digital meter with the radio turned off. And 363 existing smart meters need to be replaced with a new smart meter, but the customer is refusing. So that’s a normal situation where you’ve got a meter that has malfunctioned for one reason or another. It’s a smart meter, and the customer doesn’t want it replaced.
A. Dix: In its application to the BCUC around the meter choices program, B.C. Hydro put forward, as a model, 5,000 legacy meters against 5,000 radio-off smart meters. If you remember the calculation, obviously, that produces significantly less revenue than the current model. Has that changed the assumptions at B.C. Hydro around what it should be charging customers in the program?
Hon. B. Bennett: As I read out a second ago, there are 14,732 customers who have elected to keep the old meter. The estimated cost of these outliers, originally, was based on 10,000 customers, so you’ve got roughly 5,000 customers right now refusing to take the smart meter — more than what Hydro’s numbers were based on.
You’ve actually got an additional cost to Hydro, so they’re not recovering their full costs and won’t recover their full costs until it gets down to 10,000 customers, which they anticipate achieving some time in 2016. At that point, I’m advised, there’s no plan to go to the BCUC and change the cost of keeping the legacy meter.
A. Dix: Well, that was close to the question. It was near the question. It was around the question. But it wasn’t an answer to the question.
The question was on the 10,000 the minister referred to, or 5,000 legacy meter customers paying $32.40 a month and 5,000 radio-off smart-meter customers paying $20 a month. One is more than the other, when the balance is 14,500 to 500. Right?
That changes the financial basis of the program. It’s actually more revenue than was expected by B.C. Hydro under the program, dramatically more. And since B.C. Hydro is charging six times more for this program than other utilities, that’s a significant amount of revenue, entirely paid for by these customers of B.C. Hydro.
I guess I’m asking…. Clearly, B.C. Hydro was incorrect in its analysis, and there’s no problem with that. It’s the customer that decided this, not B.C. Hydro — which would be in which program. But has the different balance — not 5,000 to 5,000 but 14,500 to 500 — changed the revenue that B.C. Hydro receives? Has it changed any of the financials for the program?
Hon. B. Bennett: I think I have it this time. I think the member wants to know whether the fact that there are only 555 customers with radio-off meters out there created a situation where B.C. Hydro hasn’t actually had to invest as much because those are digital meters. If you had more of them out there, you’d spend more money, versus the 14,732 customers that just elected to keep their old meters. So the ratio between the number of customers who have kept their old meters and the number of customers who took radio-off meters is different than what was contained in the proposal taken to the BCUC.
Am I on the right track, hon. Member?
A. Dix: I think I might explain and then move on to the next question — and maybe get two questions in one. I think that’s in the interests of efficiency.
Someone with a legacy meter pays $144 a year more than someone without one — right? — so when you’ve got way more people with legacy meters, there’s way more money to B.C. Hydro out of the program. That’s the difference.
Maybe I can add to that a question about those fees — $32.40 for one program and $20 a month for the other. Can the minister explain why the fees are so much higher in British Columbia? I mean, I know he referred to the 1.9 million customers who took the government’s meter in as smart and the others as something else, but they’re customers of B.C. Hydro, nonetheless.
Why, in British Columbia…? Well, not in British Columbia. Let’s be clear. In the case of the Fortis program, it’s also twice as high. Why is B.C. Hydro charging these customers so much when what’s happened out there causes an enormous amount of division for those customers and for B.C. Hydro employees who have to implement the government’s policies?
Hon. B. Bennett: I think it’s important to note that B.C. has not had anywhere close to the same level of issues around the smart meter program that they’ve had
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in other jurisdictions in North America. But the real answer to the member’s question is that Hydro put together a proposal for the BCUC that was based on recovering the costs of having these outliers.
When you think about how a utility operates, a utility needs to be able to measure the electricity used by the consumer. They do that with meters. Meters are placed on, or very close to, where people live, their businesses, etc. That has been the same since electricity was invented.
I think that Hydro and the government were reasonable in considering allowing people to either keep their old meter or to take a meter with the radio turned off. There’s absolutely no scientific evidence to suggest that there’s any health hazard to people, but people wanted to keep their old meters, and so we allowed that. But what we didn’t allow was for other ratepayers who have taken smart meters — 1.9 million of them — to subsidize the cost of these outliers.
Other provinces have done their calculations on the basis of different approaches. For example, in Quebec they charge for the meter reading. They didn’t charge for all the other costs associated with being an outlier. It is our belief that ratepayers, generally, should not subsidize other ratepayers except under very unusual circumstances. And this is not that kind of circumstance, where somebody just doesn’t want to have a smart meter. It’s not a reason for another ratepayer to subsidize the costs of that person doing that, making that choice.
A. Dix: Specifically, on radio-off smart meters, for example, why does B.C. Hydro charge twice as much as Fortis. They’re also a utility where they’re operating that thing. Why do they charge twice as much as Fortis? Why do they charge six times as much as Hydro-Québec?
I’ll be specific, if the minister would like. Prior to the putting in place of the smart meter program — all kinds of promises were made about what it would do, many of which have withdrawn — what the government had, as I understand it, was 20 check meters across the province, 1.9 million customers and 20 check meters. Now what was expected to be 5,000 legacy-meter customers are paying for a system, as I understand B.C. Hydro’s application, of 200 check meters. So 1.9 million; 2,500, which was the basis on which the application was made, 200. And this cost alone, the so-called security cost, is $12 a month — or more than, for the legacy-meter customers, the cost of the entire legacy program in other provinces.
Perhaps the minister can explain the justification for what appears to be a loading up of costs on these customers, which is costing Hydro lots of goodwill and lots of challenges. It seems to me punitive. The purpose of the program, I presume, is that people pay for what Hydro now has as an additional service. It’s not to punish those customers, especially in the context of 28 percent rate increases.
Hon. B. Bennett: I think it’s ironic that an hour ago the member and other members from the opposition were all for the BCUC to be involved in everything. “Let the BCUC look at it. Let’s take it to the BCUC. That’s the answer to all our problems.”
But now Hydro took this formula to the BCUC. They did what the members said they wanted. They took this to the BCUC, and the BCUC said that these rates that are being charged to these outliers are fair because they’re not subsidized by the other ratepayers.
Now, Fortis decided they were going to let their ratepayers subsidize the cost of having outliers in their system. That’s up to Fortis. They’re a private utility serving the public. That was their application. That was their choice.
B.C. Hydro has a bigger system. They’ve got, as I’ve already said, 1.9 million customers who have taken the smart meter. Why should those people subsidize those who simply don’t want to take a smart meter? The NDP position is that those 1.9 million people who have taken a smart meter should pay extra so that somebody down the street can keep their old meter.
A. Dix: The NDP position is that the minister should stop overcharging these customers. That’s the NDP position. I mean, one is occasionally surprised, and one shouldn’t be surprised when a government that made this decision, rushed to this decision, and had a preferred supplier for a $900 million program, exempted itself by cabinet order.
I’m not sure if that was in one of the periods when the minister was in cabinet or not in cabinet. I guess we could check that. There was a period of absence there.
They made the decision to exempt this program from the BCUC. And then to hear the minister, after the government sends an order to the BCUC and restricts the BCUC, which also approves Fortis, on the question of the legacy meter program. He says: “Oh, we wanted the smart meter program to go to the BCUC, except for the $900 million investment.” It’s an interesting approach. It’s an interesting and significant approach. Boy, you wrestled that budget to the ceiling.
My question was precise. To the minister, why does he need 200 check meters for 5,000 customers when he only had 20 before for 1.9 million?
Hon. B. Bennett: The minister doesn’t need 20, 40, 60, 80, 100. It’s got nothing to do with the minister.
The utility took this to the BCUC. The BCUC said, with some adjustments: “This is how much you should charge outliers who refuse to take a smart meter. If they want a radio-off meter, this is what you charge them. If they want to keep their old legacy meter, their 1950s technology, this is what you charge them.” The BCUC said that that is a correct, fair price.
I had nothing to do with the calculations done by B.C. Hydro, and I had nothing to do with the BCUC’s view
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that what B.C. Hydro was proposing was correct and fair.
A. Dix: Well, the minister had nothing to do with it except that he was a member — I think he was a member — of the cabinet that exempted the smart meter program from BCUC review. That’s nothing. “That’s nothing,” he says. He took the order, the referral, to cabinet, as minister, on this question, which limited the scope of the hearings as everybody knows who took part in those hearings and reviewed those hearings — which I have, as you know, done.
So the minister…. I guess I can ask him again. It’s a very simple question. These customers are paying for it. It’s $12, the amount, for security. Why do they have ten times as many check meters for less than 1 percent the number of customers?
Hon. B. Bennett: Check meters provide the ability to detect theft where there are legacy meters. More check meters are required to detect that theft. That’s a pretty straightforward answer. The cost of the additional check meters is entirely attributable to those customers with legacy meters.
Once again, as I have been saying, the outliers and the cost of those outliers must be borne by those outliers, not by other ratepayers. That’s only fair.
A. Dix: The cost of the 20 check meters before was borne by those customers that had legacy meters, who are, presumably, 1.9 million. Now the cost of ten times that amount is borne by, according to this process, 5,000. There are more customers than that, but one hesitates to ask how much theft the check meters have detected. I won’t do that now because we’re approaching the end.
I did want to ask about the relationship between Hydro customers who are being cut off and B.C. Hydro. My colleague from Kootenay West has an example of a Mr. Craig Petitt, who had his hydro cut off without written notice, a telephone call or a knock on the door. We heard different messages from different people at B.C. Hydro last winter as to whether people would be cut off if they were overdue based on a refusal to pay for the smart meter program or the additional fees in the smart meter program.
One spokesperson at B.C. Hydro suggested they weren’t cutting people off in the winter, which sent a message to one group of people, but at the same time, B.C. Hydro was cutting people off in the winter. I guess my question is, given the statements by B.C. Hydro spokespeople: what is the position? Is it the position of B.C. Hydro that they will cut people off during the winter or not?
Hon. B. Bennett: B.C. Hydro really has no way of knowing why people don’t pay their bills. Most people do. The vast majority of people do. Probably all 1.9 million of those who took the smart meters do, but I’m guessing.
In any case, if they don’t pay their bill, there’s a period of time where Hydro will ask for payment. After that period of time expires, the matter is taken into a collections process, and the collections authority attempts to collect from the ratepayer. If they’re not able to do that or to make arrangements that are satisfactory to the utility for payment, then there is a disconnection that happens.
It can happen at any time of the year, except that there is a special consideration given by Hydro for extreme cold weather. I don’t have a temperature, but anything that is dangerously cold…. I’m advised that Hydro would not do a disconnection at that time. But generally, those disconnections can take place throughout the course of the year.
A. Dix: Interestingly, the estimates end at four o’clock, so the minister is about to move a motion. As Ernie Banks would say, I would very much like to “play two.” But we’re not going to do that today. We’re going to move on to the estimates of the Ministry of Transportation. I understand they need to be referred in the other House, so we’ll be adjourning in a moment.
I wanted to thank the minister and the staff of B.C. Hydro, and the staff of the Ministry of Energy who have joined us here today. With that, I’ll leave it to the minister to move the appropriate motion.
The Chair: Actually, there are no motions, but hearing no further questions, I will now call Vote 20.
Vote 20: ministry operations, $25,524,000 — approved.
The Chair: We’ll call a short recess as we get ready for the next session.
The committee recessed from 3:59 p.m. to 4:05 p.m.
[M. Morris in the chair.]
ESTIMATES: MINISTRY OF
TRANSPORTATION AND INFRASTRUCTURE
On Vote 43: ministry operations, $813,473,000 (continued).
The Chair: Did you want to make any opening comments at all?
Hon. T. Stone: No, I think we’ll just get right into it.
C. Trevena: Following on from last week, when we started off these estimates, I’m going to be shifting over to some of the major projects. We had a discussion last week about the Massey Tunnel replacement and some of the Highway 1 questions. I’m going to be looking at some
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of the other projects. I’ve given the minister a list of what we’re going to be dealing with.
One is just some of the ways that these major projects work. We’re going to be talking about the Port Mann Bridge in a moment. Port Mann Bridge has a toll, so basically, people are paying to offset the cost of the bridge. But all the other major projects, like the Sea to Sky, the South Fraser Perimeter Road, I believe, and other major projects — Minister, please correct me if I’m wrong — have what are known as shadow tolls or traffic volume payments. Under this, the concessionaire is paid a sum of money by the province for every vehicle that uses the road.
I’m wondering if the minister can confirm this and tell me, if that is the case, what the value of this total traffic volume payment is for each of the concession agreements — Sea to Sky, the Bennett Bridge, Kicking Horse and the South Fraser.
Hon. T. Stone: In answer to the member’s question, the BCTFA makes performance payments. They’re not shadow tolls, as the member had described. They’re performance payments, and they vary from one P3 contract to the next.
I can confirm that there are performance payments under P3 contracts for the following highway projects: the Kicking Horse Park Bridge, the Sea to Sky Highway corridor, the William R. Bennett Bridge, South Fraser Perimeter Road and the Canada Line. For 2015-16 the total estimated payments under P3 contracts is $148 million for all five of those P3 projects.
With respect to the Sea to Sky, which I believe was one of the projects that the member specifically asked about, the estimated P3 contract payment for 2015-2016 is $67.8 million. Total payments over the 25-year agreement are $1.613 billion.
In terms of the performance payments themselves, again, each of the contracts has slightly different criteria that form the basis for those performance payments. With respect to the Sea to Sky project, the key criteria include metrics around lane availability, maintenance standards and traffic volumes.
C. Trevena: I’ll come back to the Sea to Sky in a moment, but I wondered if he could give me the value of the other projects: the Kicking Horse, the Bennett Bridge, the South Fraser Perimeter Road and the Canada Line for this year. And is the total $1.613 billion over 25 years for all the 3P projects or just the Sea to Sky?
Hon. T. Stone: The $1.613 billion is representative of the total payments over the 25-year agreement for just the Sea to Sky project.
I’ll run through the other projects which I had listed previously. The Kicking Horse Canyon, again, as the member knows well, involves both the Park Bridge and phase 3 east. In fact, in December 2013 the concession agreement was amended to include phase 3 east, which is basically from a ten-mile brake check to Yoho National Park. The estimated P3 contract payment for ’15-16 for the Kicking Horse Canyon is about $9.7 million. The total payments for the Park Bridge and phase 3 east over the 25-year agreement are $294.7 million, $252 million of which is for the Park Bridge, and $42.7 million is for phase 3 east. That’s the Kicking Horse Canyon project.
I had previously mentioned the numbers related to Sea to Sky.
With respect to the William R. Bennett Bridge, the estimated P3 contract payment for ’15-16 is $20.6 million. The total payments over the 30-year agreement are $586 million.
The South Fraser Perimeter Road. The estimated P3 contract payment for ’15-16 is just over $30.4 million. Total payments over the 20-year agreement are $655 million.
Last but not least, with respect to Canada Line, the estimated P3 contract payment for ’15-16 is approximately $19.3 million. Total payments over the 30-year agreement are $590 million.
C. Trevena: So when we’re talking about the Sea to Sky — and the figure used today in question period is a “$600 million project” — it is actually a $2.2 billion project, because we’ve got this $1.63 billion in 25 years.
What is the criteria for that payment from the province, if it’s not done on a per-vehicle basis?
Hon. T. Stone: Again, specific to the Sea to Sky Highway project, there are three key metrics which underpin the performance payments to the P3 contractor. As I mentioned earlier, lane availability is one metric. The second one is traffic volumes, and the third one is actually safety. The way those metrics work is if the collision rate on the Sea to Sky Highway, in comparison to four other corridors, is at or below the average of the four corridors, then the contractor receives that portion of their performance payment.
As the member knows, there has been a pretty significant reduction in collisions on the Sea to Sky corridor since this improvement was made — I believe to the tune of a 32 percent reduction in vehicle collisions and, roughly, a similar reduction in the percentage of collisions involving trucks as well.
C. Trevena: Bearing in mind that we’ve had reports the last few days — and last year, I believe — of problems with the retaining walls at certain sections of the Sea to Sky, is the minister confident that the concessionaire is fit and ready to do the maintenance work that is set out in the terms of the concession agreement?
Hon. T. Stone: With respect to the Sea to Sky Highway and the contractor in question, we certainly have had no performance issues to date. The issues that are in the public realm that have been discussed over the last few days, specifically involving Pasco Road, represent mitigation work that is very standard, very normal, on corridors around the province, and we don’t believe in any way indicate any performance issues with this particular contractor.
With respect to the mitigation work at Pasco Road, the contractor is committed to doing this mitigation work. It’s completely at their risk. It’s completely at their cost. There’s no additional cost to the taxpayer. Obviously, we’re fully involved in what their plans are, related to that mitigation work, and we’re very pleased that there won’t be any follow-up issues.
C. Trevena: Two questions. Will the ministry be withholding any of the money due to the contractor? The $67.8 million that’s due this year, will the minister be withholding any while this work is done?
Secondly, will the ministry be asking the contractor to ensure that…. I mean, I’ve driven along the Sea to Sky Highway, and there’s quite a lot of retaining wall along that route. Will the ministry be asking the contractor to assess that as well?
Hon. T. Stone: The first question: will the ministry be withholding any dollars while the work at Pasco Road is being done? The answer to that is no. The reason for that is twofold.
One, the annual payments that are made to the contractor are governed by those three points of criteria which I mentioned a moment ago — again, lane availability, traffic volume and safety. Also, the contractor is responsible for the costs that will be incurred to actually do this mitigation work at the wall. There’s really nothing to hold back, because they’re responsible for the costs.
With respect to the member’s second question about whether or not the contractor has been asked to inspect walls up and down the corridor, the answer is yes. They’re asked to do that as a matter of the contract. There’s an expectation that’s on the contractor on an ongoing basis. On top of that, there are regular ongoing ministry inspections which take place as well. So we kind of have the two layers of technical expertise that are applied on an ongoing basis on the Sea to Sky Highway, as is the case on every major highway corridor in the province.
[D. Plecas in the chair.]
I will again point out that with respect to Pasco Road, both the professional engineers — the technical engineers within the ministry as well as those within the contractor — are of the opinion and have advised myself and my staff that there are no safety concerns with respect to this wall. This is purely mitigation work, which will actually increase the longevity of these walls in question.
I hope that got to the crux of the member’s two questions.
C. Trevena: I hope it does increase the longevity of the wall, since the highway was only opened about six years ago. I think most people are quite surprised that we are dealing with this at the moment. There’s obviously concern because it’s steep on both sides, as the minister well knows, and so any crumbling of walls could be very dramatic.
The minister didn’t answer my question of the $1.613 billion price — whether that includes or doesn’t include the baseline figure that is usually quoted about the cost of the Sea to Sky, which is $600 million.
I know we have limited time, and there’s a lot we want to get through this afternoon. Is there any plan or thought, for all these concession agreements, of having a financial compliance audit, having an audit of these concession agreements, to ensure that the ministry is still getting value for money?
[S. Hamilton in the chair.]
Hon. T. Stone: The first question with respect to the Sea to Sky Highway is the $600 million number that we often hear. Is that included within the $1.613 billion total payment over the 25-year agreement? The answer is yes. The $600 million represents the capital value of the improvement at that point in time.
The balance is all of the other costs that relate to this particular project over the lifetime of the 25-year period — the amortization, the debt-servicing costs, the annual rehabilitation costs, the operations and maintenance costs. When you factor all of those numbers in over a 25-year period, that’s what gets you to the $1.613 billion 25-year cost.
C. Trevena: I also asked the minister about whether these projects would be audited. In the interest of time…. Just to throw in another question — if I throw in two, maybe we’ll get to both — I wanted to move on to the Port Mann.
I know it’s a different situation because it is a Crown corp. At the time of the contract with Kiewit, another Kiewit project, I just wondered what the value of payments made was on it and what the value of those payments made up to date have been.
Hon. T. Stone: I’m going to go back and answer the previous question, which I neglected to answer — my apologies — and then I’ll sit back down. We’re just pull-
[ Page 7485 ]
ing together the Port Mann numbers for you. The previous question was: is there a regular basis or time frame during which there are audits done of the various concessionaire agreements, or have we considered that in the ministry?
The audits of the different concessionaire agreements are done on the schedule that is deemed appropriate by the Office of the Auditor General and not at any set intervals. As the member knows well, there was an audit done of the Sea to Sky Highway concessionaire agreement and the overall project, I believe, in 2012. There were then some subsequent pieces that the Office of the Auditor General looked at in 2013. The Evergreen line, which is a totally different project, has been looked at by the Office of the Auditor General. The W.R. Bennett Bridge hasn’t been yet. But again, the timing of these is determined by the Office of the Auditor General.
That all being said, we’re monitoring. Within the ministry, we certainly monitor the concessionaire agreements from a performance metrics perspective on an ongoing basis, as per the previous answers that I’ve provided the member.
With respect to the member’s question in regards to the Port Mann Bridge, I can say that the project is still…. The overall cost, the capital cost of the project, is still within the $3.319 billion budget.
In terms of what is the total dollar value of the payments that have been provided to date to the contractor, I’m going to have to get that material for the member, and I will endeavour to do that as soon as possible.
As the member knows well, there is still some work being completed. The demolition of the old Port Mann Bridge is part of the project. It’s getting very close to being done, but it’s not quite there. The opening of the final lane on the bridge is getting close. You know that these works will be done, I believe, through this year. But I will certainly get a detailed summary of the actual payments to date that have been made to the contractor in relation to the Port Mann Bridge project.
C. Trevena: When the Port Mann Bridge was being built and when there are bids being made on it, there are, obviously, certain expectations of traffic that was going to be flowing over it. And I just wondered what the traffic forecasts were for the winning bidder, the successful bidder, and to be frank, how much lower the current traffic flow is than the winning bid and, therefore, how much less money has been raised because we have less traffic flowing than the winning bid suggested.
Hon. T. Stone: Certainly, with respect to the Port Mann Bridge, when you look at all of the intended outcomes of the bridge — time savings, the environmental benefits, the jobs that were created for construction and that have resulted as a result of the construction — by all indicators the bridge has been a tremendous success.
There’s no question — I’ve said this many times publicly — that the original traffic projections that underpinned the financial projections were higher than ended up materializing. No question about that. There were a number of factors that came into play that made that the case.
The bridge, when it was originally being contemplated, and the initial traffic projections were made at a time of pretty significant economic upswing, generally, and were then followed through construction. By the end of construction, with a pretty significant economic downturn, there was….
Although it’s hard to remember today, with where gas prices are, there was a very significant increase in the cost of fuel during that time. Obviously, through the construction period, there was a good number of people that opted to change their travel patterns, opted to use other crossings. Some of those people have come back to the Port Mann Bridge. Others have not yet.
Obviously, through population growth, more people are choosing to live south of the Fraser. More people are working from their homes south of the Fraser or working closer to where they live south of the Fraser. All of these factors came into play in terms of the traffic projections not meeting the original projections.
I should point out one other factor, which the member is well aware of also. The success of the rapid bus — 50,000 transit riders every single month, who are using the rapid bus service from Langley over the Port Mann Bridge. The vast majority of those people, as we’ve asked them, have told us that they were previously in vehicles driving over the Port Mann Bridge.
The bottom line is that the original traffic projections ended up being higher than what materialized. No question about that. We are still very confident that the total debt related to this project will be retired within the 50-year time frame, as was the original commitment. So nothing has changed there.
In terms of the traffic volumes today, we are cautiously optimistic. Once the traffic projections were updated last year on a go-forward basis…. And by the way, we determined that the best time to do that was at the end of the introductory tolling rate, which was also an unknown factor: to what degree was the elimination of the introductory toll rate going to impact ridership We knew that when the toll went up from $1.50 to $3, there would be some impact. Indeed, there was a little bit of an impact in total traffic volumes. That has stabilized.
I’m sure the member is aware that we are now seeing successive months of year-over-year growth in the traffic volumes over the Port Mann Bridge. To give the member a few examples, we were up in December of 2014 over December of 2013. We were up in January of 2015 over 2014, actually by 5 percent. We were up in February of
[ Page 7486 ]
2015 over February of 2014 by 8 percent, and we were up in March of 2015 over 2014 by 6 percent. So we’re still very cautiously optimistic.
At worst, the traffic volumes appear to have stabilized. We’re not seeing a continued downward trend in overall volumes. They have stabilized, at worst. At best, we are cautiously optimistic that there continues to be a month-over-month slight improvement in the overall traffic volumes on the Port Mann Bridge.
C. Trevena: I don’t believe the minister has answered my question, which is: what were the traffic forecasts for the winning bidder? How much lower has the traffic been compared to the winning bidder’s proposal, and how much revenue has been lost because of this difference?
Hon. T. Stone: As the member knows, the original plan with the Port Mann project was for this project to be delivered in a P3 manner, similar to the other projects in the region. We actually began to go down the path of a competitive bidding process. Due to economic circumstances, as they presented themselves at that time, government made the decision to actually pull the delivery of this project back into government, and the decision was to deliver this project through TI Corp.
As part of that process and the business planning related to the project, there were estimates of traffic volumes. As I said in my previous answer, those traffic volumes began to become a bit of a moving target, based on a wide array of factors that were largely out of the control of TI Corp. I mentioned the significant downturn in the economy. I mentioned gas prices. I mentioned changing travel patterns. I mentioned the actual disruption that the construction phase represented for many commuters who made alternate travel pattern decisions.
Some came back to the corridor, and some didn’t. This is very standard. The setting of traffic projections and the need to reset these traffic projections through the course of a project is something that is not just unique to British Columbia in terms of this particular project, but it’s something that’s happened all over the world.
Again, I come back to the fundamental reality here. The traffic volumes are now improving. They’ve stabilized. We are noticing a slight improvement, month over month, when compared to the previous fiscal year. That’s good news.
As I’ve said, as well, the overall project is still on schedule to be paid off by 2050. Nothing changes there. In fact, there are no winners and losers here, insofar as what the traffic volumes were originally projected to be and what they are today. All that’s being impacted is the timing of cash flow on the project and the debt repayment schedule, which is being pushed out by a couple of years but is still within the original estimate of 2050.
It’s somewhat of a red herring here in terms of this discussion around, well, what were the traffic volumes at this point and what were they at this point and what were they then and what are they now. What really matters is the overall project cost and the overall timeline within which the debt was to be repaid. Overall project cost hasn’t changed, and the overall debt repayment schedule has not changed. The project is still scheduled to be paid off by 2050, as I’ve said, and the traffic volumes are on a slight upward trajectory, which is also very positive for the bottom line at TI Corp.
C. Trevena: I’m fascinated that the minister is not putting any figures on this. I thought these were quite straightforward questions. When you’re building a bridge and relying on tolls to pay it off, you know how much traffic you’re expecting — no matter all the extenuating circumstances and thousands of people travelling by bus rather than taking their car. And all of these people really are coming back off the Pattullo to come back onto the Port Mann. It doesn’t give a figure.
I would just like, then, to get on the record that, according to the 2012 service plan from TI Corp, the toll revenue was expected to be $208 million by 2014-15. In 2014-15 the toll revenue was actually $120 million. That’s 42 percent less than expected. I mean, this is having a significant impact. We’re already seeing the projections being shifted along. The target revenue has gone from…. It was supposed to be paid off in the 2014 service plan. In the 2014 service plan, it was going to be 2014-15. Now that’s moved over, in 2015, by three years. There are major problems here, Minister. By avoiding putting figures on it, it’s not going to make the problems go away.
While the minister may not be willing to put figures to the numbers of vehicles expected to go over the Port Mann Bridge so we can know what the tolling revenue is going to be like, maybe the minister could help in this sense. We’ve had TI Corp saying: “It’s okay. We know usage is down. We know it may start coming up, but we’re going to….” Back in the winter, when this was all happening, they said there were going to be some incentives to get people using the bridge. We had heard that there was going to be no deep change in the tolling price, so what incentives is TI Corp using to get people to use the bridge?
Hon. T. Stone: Again, just following up on the member’s comments at the front end of her last question.
What really matters to British Columbians who are paying the bills is: is the overall project, as it was originally costed…? Is that project cost still intact? On the Port Mann Bridge, it is. The original projected price is what this project is being delivered for.
Secondly, with respect to the commitments around paying off the debt by 2050, is that objective still achievable? We’ve said very clearly: yes, it is. There’s no ques-
[ Page 7487 ]
tion that the traffic volumes, the original projections versus the actuals through 2014 in particular, impacted cash flows related to the repayment of the debt. But as I said, it pushed the cash flows out by a couple of years. It pushed the debt repayment out by a couple of years. The project will still be delivered within the project budget as it was originally established, and the debt will be paid off by 2050. That’s what really materially matters to the people of British Columbia.
Now with respect to incentives, the member is correct. TI Corp is exploring the concept of incentives.
I should point out, actually — the member knows this as well — that the usage of the bridge during peak hours, which was the main objective of replacing this crossing, has been wildly successful. Traffic volumes are up dramatically on the peak rush hour coming into Vancouver in the morning and on the peak rush hour heading back out at the end of the day. Where there is room for improvement with respect to volumes on the bridge is on those off-peak hours — so kind of in the middle of the day during weekdays and on weekends.
TI Corp will be really focusing the incentives lens around: what more can be done to reward loyal customers, on the one hand, but also incentivize customers who perhaps are not choosing to use the bridge in those off-peak hours.
We also know that there is a group of people that appear to be using the bridge coming in, in the morning, but opting for other routes when heading home later in the day, and vice versa. What types of incentives could be put in place to encourage users to use the bridge in both directions?
Obviously, the balance will need to be focusing on increasing the number of travellers or vehicles using the bridge, but not at the expense of the revenue. That’s the fine balance here. I know that it’s something TI Corp will work hard to get right.
I will end by saying that TI Corp is in the midst of doing a survey of users of the bridge with respect to the types of incentives that folks who use the bridge would find of value. TI Corp will pore through that feedback from users and then obviously overlay the business considerations, which is largely about ensuring we don’t put incentive programs in place and then find out we have less revenue at the end of the day than we did before the incentive programs.
One of the great things about the Port Mann Bridge is the fact that we have the electronic data, as we do, about the bridges. We know exactly who’s using the bridge. We know the frequency of use. We have a tremendous amount of data in relation to travel patterns. I know that TI Corp will certainly shape incentive programs on that basis and will ensure that any incentives they put in place will drive additional volumes — but not at the expense of revenue.
C. Trevena: I always find it amusing when the minister talks about how on budget the bridge is. It’s actually 120 percent overspent. When we’re looking at the ten-year transportation plan, it’s got a full budget for ten years of $2.5 billion, and Port Mann is now, at present, at $3.6 billion. So the whole ten years for the rest of the province is less than what we’ve spent on the Port Mann Bridge.
I just wanted to ask the minister, moving on a little, one last question on the revenue side of the bridge. Will TI Corp put toll levels higher than the rate of inflation? We’ve seen pressure on costs for users of B.C. Ferries to meet the costs of keeping the ferries afloat. It’s turned out that it’s been up to the users to pay the cost, and I’m wondering if this is something that is accepted in TI Corp. Then I’m going to be moving on to more detailed questions for a few minutes about financial derivatives on the debt for TI Corp.
Hon. T. Stone: With respect to toll rates, TI Corp will make business decisions in the years ahead with respect to any increases in toll rates. The toll rates are governed within the concession agreement that is in place. Bottom line here is that TI Corp will make decisions that it feels it needs to with respect to rates that will ensure that the overall project debt is paid off by 2050. That, fundamentally, is the overriding objective at TI Corp. So that’s on the toll question.
I do want to say, though, just again, the member mentioned in her previous statement…. She put a piece of inaccurate information on the record, so I’m going to correct the record. The overall project cost — which was inclusive of the project design, inflation, interest during construction and the construction contract award — is $3.319 billion. That was the total project cost for the Port Mann Bridge.
The project has been delivered, and the final pieces are completed, including the bridge demolition, the final lane opening and a few other final pieces. The bridge will have been delivered within that project cost of $3.319 billion.
C. Trevena: So it’s no wonder that the first performance measure for Transportation Investment Corporation is to remain within the approved capital budget of $3.319 billion. It’s a bit concerning that that has to be a performance measure.
But I’m going to move on to the question of the debt and financial derivatives. I believe that in 2009 TI Corp took out financial derivatives on $2 billion of debt. Because of change to the interest rates, about $250 million, I understand, was lost.
The TI Corp entered two kinds of contracts: advanced-rate settings that locked the TI Corp into high interest rates on long-term debt, and interest rate swaps that cost more on short-term debt than was available on the open market.
[ Page 7488 ]
I just wanted to confirm that this actually happened. If so, did the government lose money on these financial derivatives? How much was lost, if this is correct?
Hon. T. Stone: Yes, with respect to the member’s question around advanced-rate setting locking in interest rates, she is referencing TI Corp’s hedging strategy. Particularly on large capital projects, this is a prudent strategy to provide cost certainty for your project.
For example, if you didn’t have locked-in interest rates and if interest rates increased, you would actually find yourselves with pretty significant cost pressures on the project.
The reality here is that any accumulated hedging loss is strictly an accounting loss. It’s not an operating loss. It’s, again, a very standard practice that’s used in these types of major capital projects which provides the type of cost certainty that’s so important to be able to move forward with and know that the project can be delivered within the overall budget that you set for yourself.
In the case of this project, again, it was a $3.319 billion project budget. The hedging strategies that were employed were a critical component to ensuring that the risk around interest rates was mitigated as much as possible to provide certainty on that overall project cost.
C. Trevena: When the minister says the risk was mitigated, did $250 million get lost in this? Was this an accounting error? Would the minister please clarify just what he talks about by mitigating and creating safeguards here. We’re talking about quite a lot of money, in most people’s lexicon.
Hon. T. Stone: I think the best way to ensure that the record accurately reflects what a hedging loss actually is in terms that most of us would understand outside of this place would be to consider when an individual goes to purchase a home. You decide whether you want to lock in your mortgage with a five-year rate or a variable rate. The difference between the costs…. And there is a difference between the two costs, because one provides more certainty over a longer period of time. You pay a price for that increased certainty.
In terms of applying that concept to a large capital project like this one, when you’re financing it, is to look at what that opportunity cost — the difference between the interest rate that you locked in at compared with the actual interest rates. In the accounting world that difference, that opportunity cost, has to be accounted for.
Essentially, the way that happens is you move that opportunity cost off of your balance sheet and onto your income statement as an interest expense. Then you amortize that interest expense over the balance of the debt repayment terms. The hedging loss — again, the difference between the interest rate that the project locked in at versus the actual interest rates that were realized — that cost moves from the balance sheet to the income statement and is amortized over the balance of the project.
Again, it has nothing to do with the operations. It in no way reflects an operating loss. This is strictly an accounting treatment that reflects that opportunity cost of the differential between what was desired from an interest rate cost and what was actually realized.
C. Trevena: We’re still talking about a project of $3.3 billion that got locked in on debt-servicing at a higher interest rate than it necessarily had to. It’s not something to be sneezed at.
I’m wondering if the minister can tell me how much higher the debt-servicing costs have been because of this deciding to lock in on a higher interest rate through this and if the minister can say what the TI Corp would have got otherwise, without having locked in.
Hon. T. Stone: That is the $250 million number that the member referenced in a previous question.
Again, the most important point with respect to this discussion from the perspective, I think, of British Columbians who pay the bills is that the overall budgeted project at $3.319 billion has remained unchanged. The project will be delivered within that budget.
Secondly, the debt relating to this project will be paid off before 2050, which was the original time frame within which the debt was to be retired.
C. Trevena: I’m going to switch tack a little. I have one question on resource roads, and then I’m going to be moving on to speed limits, just to give the minister a heads-up on what’s coming. Then my colleague from Coquitlam-Maillardville, I believe, is going to come in for a couple of questions.
My question on resource roads is that there is a certain amount budgeted. I believe it’s $20 million every year — a natural gas road upgrade program. I ask the minister about this pretty well every year, about the $20 million that goes for natural gas upgrade.
I wonder if the minister could clarify whether the ministry pays for all the upgrades for the roads leading to LNG plants and other gas plants or whether the developer is going to be paying any of this.
[P. Pimm in the chair.]
That’s the question. There might be a quick follow-up.
Hon. T. Stone: With respect to the member’s question, yes, within B.C. on the Move, our new ten-year transportation plan, one of the themes is rehabilitation — rehabilitation of highways and bridges. We’ve earmarked
[ Page 7489 ]
$890 million over the next three years toward rehabilitation of roads and bridges. One of the components of that rehabilitation is our continued commitment to investing in roads in northeastern British Columbia.
The member is correct. The number she mentioned in her question, $20 million per year, has been the funding level for roads in the northeast sector for a number of years now, $20 million per year. We’re committed to that, moving forward.
It’s important to note these are public roads. These are roads that are really important to the communities that they connect and that are used, to a high degree, by just the broader public in these communities. These are also roads which are critically important to a wide array of industry, whether that be oil and gas, mining, forestry or other industrial users.
This $20 million per year represents a continued investment by the province in ensuring that these roads in northeastern British Columbia are maintained and rehabilitated to a level that will meet the needs of industry and, as importantly, if not more, the needs of the communities and the people who live in those northeastern B.C. communities.
C. Trevena: Just a quick question. So there is no investment for roads around the proposed areas where LNG plants are going to be built in the northwest, in Kitimat or Prince Rupert, that’s coming directly from the ministry and not from industry?
Hon. T. Stone: The $20-million-per-year investment in roads in northeastern British Columbia, as I said in my last response, is not specific to any one particular industry. These investments are intended to address the reality that we’re seeing increased activity and usage of these roads from a wide variety of industrial users, in addition to us wanting to ensure that these roads are maintained at a high level of standard for the communities and the public who live in these areas.
We have profiled dollars in a number of other areas in our B.C. on the Move ten-year transportation plan. Obviously, this $20 million for northeastern roads is one component. We’ve also got dollars earmarked for rehabilitation of roads and bridges on major highway corridors across the province.
As I’ve said many times publicly — I’ll say it again here — the predominant method by which we prioritize our infrastructure spend in transportation is the safe movement of people and goods. We are now also overlaying on that a second lens through which we are now looking as we determine priorities, and that is the lens of economic development — industrial activity, economic growth, jobs.
To that extent, I’m really proud of some of the adjustments that I’ve been able to accommodate within our ten-year plan. For example, in the rehabilitation component of the plan, we have earmarked a 33 percent increase in the total investment that we will making in bridge replacement and upgrades.
Some examples which will be very important to industrial users but also to the general public, I would argue, will be the replacement of the Parsnip River bridge and the Salmon River bridge on Highway 97 north of Prince George. We’re also looking at the Nass River bridge. As we speak, we’re replacing the Malakwa bridge on the Trans-Canada east of Kamloops. We are looking at the replacement of the North Fork Bridge on the Trans-Canada and an array of other bridges.
Again, we’re able to make those investments because we’ve increased the allocation in bridge replacement and upgrades by 33 percent in our current plan.
We also have profiled, in road rehabilitation, a number of investments that will be made on our other major highway corridors. From a highway expansion perspective, that’s another part of this as well. We’ve earmarked dollars in all of our major corridors.
I would also point out that we’ve increased the budget moving forward by a full 50 percent in terms of our investment in rural side roads and secondary highways. This is going to enable us to accelerate a number of projects which will be, in part, about the facilitation of more industrial activity but also the safe movement of other people who use these corridors.
C. Trevena: If we can move over to speed limits now. Speed limits went up in summer, quite significantly in some areas. I would ask the minister if there have been or if there are any plans for a study to be done on whether more people have been stopped and whether more tickets have been issued since the speed limits have been increased.
Hon. T. Stone: First off, with respect to the speed changes, it hasn’t yet been a full year since the changes were made. As the member knows, they were made in July of 2014. I can assure the member, as all British Columbians, that we are monitoring each and every corridor where there were speed adjustments. The member knows well that we looked at over 9,000 kilometres of highway. We adjusted the speed on 1,300 kilometres of highway, including Highway 19, in her backyard, on the Island.
We’re monitoring very closely those corridors from a safety perspective. Once we get to that one-year point and beyond, we will have, statistically, enough data from ICBC, from the RCMP accident reports and from other data points that we collect within the ministry to assess whether or not any trends have developed since the speed changes were made, whether collision rates have gone up or have gone down.
Anecdotally, we’re not feeling that there have been any significant changes in those rates, but we’ll see once we
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have a longer period of statistical information to actually analyze and make some judgments from that point.
C. Trevena: We’ve had the speed limit increased in a vast array of corridors. In some corridors there have been requests for speed limit reductions; in others there have been areas where people would have liked it to have gone up.
I’m wondering if the minister can say whether there are any other sections of highway at this stage that are candidates for changes in the speed limit, either up or down, or whether, again, this is going to be at the end of a year’s assessment.
Hon. T. Stone: As I outlined when we made the speed adjustments in July of 2014, the overriding factor that enabled us to arrive at the conclusions that we did was safety.
When our professional traffic engineers in the ministry, who made the recommendations, I would point out again, on the speed changes…. When they made those recommendations, they made them largely on the basis of what is known in the traffic engineering world as the 85th percentile. That is the speed at which up to 85 percent of the vehicles are travelling on a particular corridor at a particular time, and it is widely recognized around the world as the safest speed.
If vehicles are driving predominantly faster than that 85th percentile, they are at greater risk of causing or being in collisions. If you are driving predominantly slower than that 85th percentile, you are at higher risk of collisions.
That is why it is so important — this is what I say any time I’m asked this question — to focus on establishing the safest speed for a particular corridor. Frankly, just having a sign with a particular speed limit on it is not going to drive people’s behaviour one way or the other. It’s the natural flow of the traffic around them, which is governed largely by the conditions at that particular time, that will determine that natural flow or that 85th percentile.
The member would be interested to know, I’m sure, that because we monitor this daily, we know what that 85th percentile is on a very regular basis. Before we made the change on the Island Highway — Highway 19, in the member’s backyard — the 85th percentile was 121 kilometres per hour, and the speed limit was 110. We increased the speed to 120. The 85th percentile is unchanged today. It’s 121 kilometres per hour. So people are not driving faster on that corridor.
On the Trans-Canada Highway in the Fraser Valley, where we increased the speed from 100 to 110 kilometres per hour, the 85th percentile before the speed change was 116 kilometres per hour. We increased the limit to 110. The average speed is unchanged at 116 kilometres per hour today. People are not driving any faster.
On the Sea to Sky Highway, interestingly enough, on the section between Whistler and Pemberton…. The speed limit was increased from 80 to 90 kilometres per hour in this section. The 85th percentile before the change was 102 kilometres per hour against a speed limit of 80. We increased the speed limit to 90. The 85th percentile has dropped. The 85th percentile today is actually 95 kilometres per hour, a full 7 kilometres less than it was before we made the speed change.
On the Trans-Canada east of Kamloops, in my backyard, we increased the speed from 90 to 100 kilometres per hour. The 85th percentile before the change was 105 kilometres against the 90 speed limit. After we made the change, the 85th percentile dropped one kilometre per hour to 104 kilometres per hour.
And last but not least…. Well, actually, two more quick examples. On the Coquihalla between Hope and Kamloops, again, as with the Island Highway, we increased the speed to 120 from 110. Before the speed change the 85th percentile was 127 kilometres per hour. Today it’s unchanged at 127 kilometres per hour.
I will point out the Okanagan Connector, where we also changed the speed from 110 to 120. Before the change the 85th percentile was 126 kilometres per hour. On this particular corridor the average speed, the 85th percentile, has gone up, but only by one kilometre per hour, to 127 kilometres an hour.
Bottom line: the speed at which people are travelling on the corridors where we changed the speeds in most cases has not changed.
C. Trevena: That being said, I’m sure the minister is very well aware of this study done by the BCMJ, which notes 120 kilometres per hour as being the highest in Canada. They are very concerned that this is going to lead to an increase in ambulance call-outs and the potential of increased accidents and fatalities.
Likewise, the Fraser Health Authority have been in touch with the minister about the decision, basically saying that the potential dangers are going to outweigh the benefits. I think we have to be very cognizant of that.
I’m also very aware that the RCMP at the time that this was introduced was not particularly happy about it. So while it’s great if we’re rushing to get to an appointment or to a ferry, it’s not necessarily the safest way of travelling.
I’ve got a couple of other questions. There are a couple of communities that I’m sure the minister is very well aware of where they want the speed limit reduced. I’m hoping that the minister will be able to give some answers to these communities.
One is 70 Mile House. They have been lobbying the minister. I think they’ve been talking with their MLA and lobbying the Premier as well for the speed limit to be reduced there. They are expecting infrastructure to be built and want the speed limit to be reduced until that
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infrastructure is built. I’m sure the minister is aware in going through 70 Mile that they’re very concerned that the speed limit is the level it is.
The second one, while looking up speed limits and asking for reductions, is on Highway 33 in Joe Rich, where there was, very sadly, a fatality. They have been pleading with the ministry to reduce the speed limit. It at the present has a 100-kilometre-an-hour speed limit, and they very much want this to go down to a level which is safe, a 90 or 80.
[The bells were rung.]
The Chair: We have bells, so we will take a recess.
The committee recessed from 5:46 p.m. to 5:58 p.m.
[P. Pimm in the chair.]
Hon. T. Stone: With respect to the previous question, the member asked about the request from citizens within 70 Mile House for a reduction in the speed though their community from the current speed limit down to 50, and then Highway 33 through Joe Rich. There have also been, I think, some noteworthy community requests that have come forward, asking for a reduction in the speed there. I’ll deal with it in the reverse order.
With respect to the community of Joe Rich, obviously this particular community actually did suffer a tragedy not that long ago. As I said at the time, my heart goes out to the family impacted. What we did commit to the community of Joe Rich, and we stand by, is that we will sit down with them later this spring and take a look at the speed limit through their community, and we will look at compliance. We’ll look at collision rates and other factors and, in collaboration with the community, determine whether or not any adjustments to the speed are required through that corridor.
What we do know is the change that we made through the speed limits in the Joe Rich area — again, as I said earlier — was predicated on what the 85th percentile speed is through that community. There has been a high degree of compliance with the posted speed limit, but we have committed and we’ll sit down with the community of Joe Rich to work through their concerns and look at the data later this spring.
With respect to 70 Mile House, it’s also a community that has raised concerns to me directly and to staff in the ministry about two things. One, ideally, they would like to see the speed reduced on the portion of highway that goes through their community. Secondly, they were requesting that the transition speed zones be stepped down faster and further out of the community. Again, I have responded to the community, actually, face to face in a meeting I had with them at the UBCM last year in Whistler, and, I believe, in writing. We have no intentions at this point in time of changing the speed limits through 70 Mile House, simply because the data does not support such a change.
As I said earlier, the important piece to get right when one looks at speed limits is what is the most appropriate, the safest speed for a particular corridor, one that will be actually respected by the vast majority of motorists and will thus be reflected in that 85th percentile. When we look at the speed from that perspective through 70 Mile House, the current speed limits are the appropriate speed limits. We marry that with collision data and other related points, and there just simply isn’t a case to be made for lowering the speed limit through the community or to make any changes to the transition zones.
The last thing I’ll say is it often can be more dangerous to put up a speed sign with a speed limit that is lower than what that natural flow of traffic is on a particular piece of highway. If the vast majority of motorists don’t end up respecting whatever is on that speed sign, by lowering the speed, you’ve potentially made that particular zone of highway less safe to travel than it was before the speed was adjusted.
C. Trevena: That being said, there are areas where you do have rapid transitions — whether it’s the new highways, where you go from 120 right down to 90 at intersections. Just knowing from my own routes, when you come from Parksville down to Nanoose Bay, it goes from 90 straight to 60. There are times when this happens because of intersections and because of people living there.
The communities are going to be, I think, somewhat disappointed that the minister is very quick to react to a very sad incident, where somebody was killed when they drove over where there wasn’t a barrier. The minister very quickly said he was going to act, at the response of a child who wrote to him. These are two communities, one of which has seen a fatality, and they have been requesting this for some time and are not seeing it.
I just want to move on to one last question on this before handing it over to my colleague from Coquitlam-Maillardville. That is, I know that the minister has said very publicly that we’re now going to have variable speed limits on certain stretches of highway. This was stated when we got the increase in speed limits — that this was going to come — so I think there is, somewhat, disappointment that it’s taking, effectively, a year to bring that in, although the increases have gone up.
My question is: why only three specific areas when it would be very effective right across areas? Well, it would be very effective right across the province. And what is the cost of bringing these three variable speed limit systems in?
Hon. T. Stone: Again, just closing off on the particular line of questioning with respect to 70 Mile House, I would
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point out to the member that the speed through 70 Mile House has been 100 kilometres per hour, and it’s been at that limit for ten years. The collision information over a ten-year period just simply does not warrant a reduction in speed based on the professional engineers’ evaluation and analysis that has been undertaken in the ministry.
We get requests often from different communities around the province to adjust speeds downwards through their communities, and we just have to be very, very careful that, from the overall perspective of a corridor, the rate of speed at which an individual is moving through that corridor…. If you are used to travelling at 90 through an entire corridor, and that’s been the way it’s been for ten years, and the statistics, the data, support that speed, and then you were to reduce the speed limit in one 2.5-kilometre section — which is what we would be talking about in the case of 70 Mile House — it is the professional opinion of engineers in the ministry that that would actually have an adverse effect through that corridor.
So, absolutely, take the community’s feedback into account, and we’ve spent a fair bit of time out there assessing, tracking the speeds and talking to the community to really try and make sure that we’re challenging the assumptions that had been made up to that point, but I have to say we do stand by the current speed limit through 70 Mile House.
The issues that the member referenced in Lillooet with the guardrail and the tragedy that took place last winter. Again, we are awaiting the police reports. Indications at this point are not that speed was the predominant factor through there. I mean, we’ll see when the reports come back.
We did commit to doing a guardrail assessment analysis in the spring once the snow is gone and so forth. We are doing that work now to determine whether or not, technically speaking, there’s enough space to actually put a guardrail in place where this incident took place. Hopefully, we’ll have some good news for the folks in Lillooet later this spring on that front.
With respect to the variable speed zones, this is something I really enjoy talking about because it represents technology that is in use in other parts of the world, other jurisdictions, and it’s proving to save lives. It is expensive, but what we’ve determined is that we would like to give it a shot here in British Columbia on a pilot basis.
Prior to going all in and potentially committing tens of millions of dollars to variable speed zone technology, we’ve opted to implement on a pilot basis variable speed technology in three locations around the province, as the member mentioned in her question.
One will be on the Sea to Sky Highway between Whistler and Pemberton. One will be on the Coquihalla Highway roughly between where the snowshed is and where the tollbooth used to be. The third location will be west of Revelstoke.
Each of these sections will be somewhere in that ten to 15 kilometres in length. It involves fairly sophisticated technology, radar and sensors in the pavement, and electronic signs. Based on the weather conditions at a particular time, weather information and so forth, we will be able to dial the speeds down and then back up again, which would then be reflected on these signs.
We would make those changes from our traffic management centre, actually in Coquitlam. It’s a pretty exciting technology. We’re hopeful that once in place, once in use in time for this upcoming winter season, it will demonstrate its worth very, very quickly.
Total dollar value: roughly $10 million for the three pilot zones combined.
S. Robinson: My question to the minister is about the new Building Canada fund that was announced by the federal government in March 2014. It’s about the $10 billion for the provincial-territorial infrastructure component, particularly the national and regional projects. I understand that the small communities fund is up and running and that there’s a little over $1 billion available to British Columbia.
I’m interested in regionally significant projects, like the Lions Gate wastewater treatment plant and the Annacis Island plant. There are certainly some questions happening in the area of local government. I just wanted to ask the minister: when will the application framework be ready for these regional governments and local governments to be able to apply for these federal dollars?
Hon. T. Stone: We’re just trying to get as much in as we possibly can here. I appreciate the question on the Build Canada fund.
The member is correct. The provincial and territorial infrastructure component actually has two subsets to it. There’s the provincial and territorial regional projects and then there’s the small communities fund.
The small communities fund has about $1 billion in it. There’s a defined application process for that. The member knows well that application process intake has ended. Those projects are being evaluated by the ministry for community services. I believe UBCM has observer status as part of that process and so forth. So we’re expecting some good progress to be made very soon on that front.
With respect to the other component, which is funding for national and regional projects, the member is quite correct. There’s about $900 million in this particular pot for British Columbia. We’ve got these dollars over a ten-year period. I always point out to anyone who will listen that the dollars are pretty heavily back-end loaded.
While we’re very grateful for the federal dollars, there’s actually only $30 million allocated to British Columbia in the first two years of the Build Canada fund in this particular pot. One kilometre of four-laning is, on average, about $10 million for that one kilometre. What does that
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mean? It means the cash-flowing of projects becomes that much more important.
In terms of the types of infrastructure that are eligible under this that we will be considering for funding, we’re looking at a mix of provincial and municipal infrastructure as well as, potentially, some federal infrastructure. It would be largely port-related.
We have not…. There never has been, actually, a formal intake or application process for the national and regional project component. It’s been more of an ongoing process. We have been accepting project proposals for a wide array of infrastructure projects — again, provincial, municipal and federal.
For over a year now we’ve been evaluating, whether it be in relation to airports or ports or municipal projects, provincial highways and the like. This is the component where we’re hopeful the federal government will agree to at least one B.C. Ferries–related proposal. That will either involve a vessel replacement or a terminal upgrade.
I’m not sure if I fully answered the member’s question there. But the application process is underway. We met with UBCM last week. I encouraged them yet again to make sure that they advise their member municipalities, particularly the larger municipalities. As the member knows well, those nine or ten that are over the 100,000 population don’t qualify for the small communities. This would be the fund where their projects would be considered.
Member, the last thing I was going to mention — the Lions Gate wastewater project. This is one that we are working on with the federal government. We’re supportive of the project notionally, as long as we can allocate funding from the correct envelope for it. We’re suggesting the P3 Canada fund be used to access dollars.
It’s a huge project, as the member knows well — a very large capital cost. If this project was to be paid for, in terms of the provincial contribution of Build Canada, out of the national and regional component, that would use up a huge chunk of the dollars that are available, which need to be available for projects provincewide over a ten-year period.
S. Robinson: I thank the minister for the response. It was actually very helpful. I just want to make sure that I understood correctly, because I will be sharing what I’ve learned here today with local governments.
It sounds like it’s not going to be similar to the small communities fund, which has a process for application where there’s a timeline and there will be an end date. If any communities are interested or have a project in mind, they should just be contacting, I’m assuming, the ministry directly in order to learn or to get into the queue.
Part of the challenge, which I think is not well understood, is that this is, in my understanding, a little bit unusual. Typically, there’s an application process of some kind. There’s a timeline. There’s some structure. There are some criteria. This sounds like a very different model.
I’d like to hear from the minister how the ministry has communicated to these communities about this: what’s available — and share with us. I’d just like to hear a little bit more about how the process went so that these communities and regional districts understand that it has been an open and an atypical process.
Hon. T. Stone: A very important question. I do, at every opportunity, express to municipalities and to other potential proponents, to manage their expectations, exactly what the timelines are, what the criterion eligibility process is.
In terms of the eligible projects, that’s all detailed to a great extent in the Build Canada fund documents that were released. I’m not suggesting the member is thinking this way, but there should be no confusion with local government around: (1) what the eligible categories are; and (2) from a time frame perspective and how proposals will be considered.
I met with almost 90 local governments at the UBCM convention in Whistler last year, and every single meeting involved, as a part of the discussion, an update on the Build Canada fund. I expressed to every community that I met with: “This is the small communities fund. Here’s how that works. If you’re over 100,000 population, you could be eligible under the national and regional component.” Certainly, I’ve met with countless organizations, local governments mostly, over the last year, as I know other colleagues of mine have, as well, to express to them what the process it.
We’ve actually begun to make funding announcements. The very first announcement under the new Building Canada fund — they have a PTIC, a national-regional component — was made last Friday in North Vancouver, with the district of North Vancouver, the federal government and the province all contributing as funding partners towards the lower Lynn Valley interchange project.
We’re considering projects actively now, and we’ll be making decisions and joint announcements with our funding partners in the weeks and months ahead.
With that, I move that the committee rise, report resolution and completion of the Ministry of Energy and Mines and report progress on the Ministry of Transportation and Infrastructure and ask leave to sit again.
The committee rose at 6:20 p.m.
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